Healthcare sharing ministries: A leap of faith?

As health insurance premiums rise, so does the popularity of cheaper alternatives to covering medical expenses. That’s one reason why healthcare sharing ministries – which can average less than half the cost of traditional health insurance plans – have seen a major membership surge in the past few years.

Healthcare sharing ministries are faith-based non-profit organizations that pool members’ money to share medical expenses. As long as the ministry has been in existence since December 31, 1999, participation exempts members from the Affordable Care Act’s individual mandate to have health insurance (that’s no longer an issue after the end of 2018, as the federal individual mandate penalty won’t apply in 2019 or future years).

These organizations generally require members to make a promise to adhere to certain biblical values and to participate regularly in worship or prayers. As a result, some health conditions don’t comport, leaving members to pay out-of-pocket for illnesses stemming from the use of tobacco, alcohol, and drug addiction, for example. They typically don’t pay for mental health services, out-of-wedlock pregnancies, contraceptives or abortion either.

Since the Affordable Care Act became law, membership for healthcare sharing ministries has grown at a rapid rate. The Commonwealth Fund reports that there were an estimated one million people enrolled in health care sharing ministry plans as of 2018, up from about 200,000 as of 2010 (the year the ACA was implemented). More than 100 health care sharing ministries are in operation in the US, although nearly all of them are affiliated with small Mennonite churches; most health care sharing ministry members are enrolled in coverage offered by Samaritan Ministries, Medi-Share, Christian Healthcare Ministries, and Liberty Healthshare.

Desire for cheaper plans fuels interest

Why the rapid growth? Health care sharing ministry plans are far less expensive than ACA-compliant coverage for people who aren’t eligible for premium subsidies in the exchange. As long as they’re healthy, can agree to a sharing ministry’s lifestyle requirements, and aren’t concerned with the coverage gaps and reduced regulatory oversight, they can pay a lot less each month for their coverage by using a sharing ministry plan.

For example, a single person between the age of 30 and 64 who signs up with Liberty HealthShare ministry will pay $299/month. A couple will pay $399/month, and a family will pay $529/month. The plan will share up to $1,000,000 per incident, and there’s an “unshared amount” (similar to a deductible) that ranges from $1,000 to $2,250.

A single 50-year-old enrolling in Medi-Share (Christian Care Ministry) will pay between $176/month and $484/month, depending on their health and the unshared amount that they select. For a family of four with 50-year-old parents, the Medi-Share monthly cost will range from $301 to $959.

Compare that to average monthly premiums through the ACA marketplaces of $668 for a 50-year old individual purchasing a silver on-exchange plan for 2019 without any premium subsidies. A family of four (50-year-old parents and two teenage kids) will pay an average of nearly $2,000/month for a silver plan in the exchange if they aren’t eligible for premium subsidies in 2019. And silver plans can have out-of-pocket exposure as high as $7,900 for an individual and $15,800 for a family

It’s worth noting here that most middle-class families do qualify for premium subsidies in the exchange; subsidies are available for a household of four people with an income of more than $100,000 in 2019. And “income” refers to the ACA-specific calculation for modified adjusted gross income (MAGI): Contributions to retirement plans and a health savings acount will result in a lower MAGI and potentially larger premium subsidies.

But if there’s no way you’re eligible for subsidies, the monthly costs might make a sharing ministry plan look like a good option. But before ditching your ACA-compliant health insurance policy, here are five things to know about healthcare sharing ministries.

1. They’re not health insurance

Although designed to help consumers cover the cost of medical expenses, healthcare sharing ministries differ in significant ways from health insurance policies that comply with the Affordable Care Act.

“It’s voluntary and cooperative and motivated by compassion and the urge to assist another person in need. That’s really what drives it versus an insurance arrangement where there is a contract of indemnity. That’s the essential difference,” says Dale Bellis, Liberty Health Share’s executive director.

Each healthcare sharing ministry operates a bit differently, but generally the money collected from members each month is placed into an account. The ministry then facilitates the direct sharing of medical costs among members.

“Each month members can see the names of other members who have benefited from their monthly share amount,” says Michael Gardner, director of marketing and communications for Christian Care Ministry, a healthcare sharing ministry in Melbourne, Florida.

2. State and federal regulations don’t apply

Consumers who face problems with a healthcare sharing ministry, such as when a claim is paid or a service is not covered, aren’t protected by their state’s insurance department.

As of 2018, there are 30 states with laws that exempt health care sharing ministries from laws that apply to health insurance. So members of healthcare sharing ministries in those states don’t get the benefit of regulatory oversight from the insurance department. That’s because healthcare sharing ministries are not health insurance companies and do not technically offer health insurance

So there are no guarantees that certain services or treatments, such as preventive visits and contraceptives, mental healthcare and treatment associated with drug or alcohol use or abuse, are covered. And in many cases, some of those services are specifically excluded. The ACA’s consumer protections don’t apply to health care sharing ministries, so essential health benefits don’t have to be covered.

Most health care sharing ministries do have formal appeals processes in place, but they aren’t enforced by federal or state law.

LibertyShare, for example, alerts members on its website about their rights when grievances over uncovered medical costs occur, and when attempts at resolving the dispute don’t work in the member’s favor.

This program is not an insurance company nor is it offered through an insurance company. This program does not guarantee or promise that your medical bills will be paid or assigned to others for payment. Whether anyone chooses to pay your medical bills will be totally voluntary. As such, this program should never be considered as a substitute for an insurance policy. Whether you receive any payments for medical expenses and whether or not this program continues to operate, you are always liable for any unpaid bills.

“It’s buyer beware. If you have health costs not covered there is very little recourse for you. You can’t go to a government agency to complain,” explains Sabrina Corlett, with the Center on Health Insurance Reforms at Georgetown University’s Health Policy Institute. And as the fine print clearly notes, the sharing ministry plan should not be considered a substitute for health insurance.

3. Underwriting is permitted

One common practice the ACA outlawed was the ability of health insurers to turn away people with pre-existing health conditions, or to charge them more for coverage.

Not so with healthcare sharing ministries.

Medical underwriting is allowed and pre-existing health conditions can be excluded from coverage.

4. There are limits to coverage

Unlike health insurance, there are generally limits to the amount of medical expenses healthcare sharing ministries will cover – in some cases, a maximum payout of $125,000 per incident and $1,000,000 per diagnosis.

Although healthcare sharing ministries report that most members’ “sharable expenses” are covered, they are clear to say there is no guarantee.

“Neither Medi-Share nor any of its members assume any obligation to pay another member’s medical bills,” Gardner says. Medi-Share’s policy is common among other ministries.

5. No limits on access to doctors, hospitals, but also no guarantee they’ll accept sharing ministry coverage

Christian Care Ministry is one of a few organizations with a provider network it suggests members tap for care. According to Gardner, staff is better able to negotiate a discounted rate when members see one of the more than 700,000 providers participating with the organization nationwide. However, members are allowed to see any provider they wish.

In most cases, ministries will negotiate prices on members’ behalf. And, it’s a good deal for both the patient and providers, they say. According to Bellis, 97 percent of all doctors and hospitals take the reimbursement they negotiate.

But there’s another side to this as well: Doctors and hospitals can treat sharing ministry members as cash-paying patients, which means they might not accept them at all, if the patient is expected to rack up a significant bill. To be clear, doctors and hospital like cash-paying patients if the patient pays up front or the bill is relatively small and there’s an expectation that the patient will be able to pay it without much trouble. But when a bill is expected to be substantial and isn’t paid up front, a patient without a solid insurance policy backing them might experience difficulties in getting the hospital to provide treatment.

Look before a leap of faith

Corlette of Georgetown University’s Health Policy Institute says anyone considering a healthcare sharing ministry in place of an ACA-compliant health insurance plan just needs to enter with their eyes wide open.

“What I would say about health sharing ministries is they are a leap of faith, both literally and figuratively.”