Sharing the Healthcare Burden

They’re not insurance, but health share plans are an ACA compliant solution

Christian co-share health plans are increasing in popularity as an alternative to traditional health insurance.

We live in an age of great divide in our country with lots of debate and disagreement over a wide variety of issues, high among them healthcare coverage. Some people feel the Affordable Care Act, often referred to as Obamacare, did not go far enough, while others think it went too far. There is a lot of talk about repealing and replacing it. Add to that the fact that several big health care insurers have announced they are pulling out of the ACA exchanges resulting in fewer plans to choose from, and those depending on ACA for coverage are left feeling anxious.

There is one thing that most people seem to agree on though and that is that the cost of healthcare coverage is still too high and continuing to climb out of control. Millions of people, especially those that are self-insured, are struggling to pay for plans with astronomical monthly price tags and high deductibles. Simply not buying healthcare coverage is no longer an option with the ACA mandate. So, thousands of people are turning to alternatives.

Faith-based coverage

One alternative is non-profit organizations known as Christian Healthcare Sharing Ministries. There are five large organizations and many smaller ones operating around the country and several of them actually predate the Affordable Care Act. They were founded in response to rising healthcare costs back in the 1980’s and 90’s and are based on the Biblical teachings of sharing one another’s burdens.

Enrollment in these healthcare sharing ministries has grown by leaps and bounds since ACA was enacted. The Alliance of Healthcare Sharing Ministries purports enrollment figures of over half a million people, more than double the enrollment numbers of just a few years ago.

Each company’s program is different but they all claim to save as much as half of the cost of traditional health insurance. They are quick to point out that what they offer is not actually health insurance, but an alternative. They are, however, compliant with the ACA mandate because of their non-profit, religious status.

Michael Gardner, the Communications Director for Christian Care Ministries, which operates MediShare, one of the oldest and largest healthcare sharing ministries explains, “there is actually an exemption written into the Affordable Care Act that is specifically for members of healthcare sharing ministries,” and adds “while we are not insurance, we do meet that criteria and so members are exempt from the financial penalty”.

MediShare was founded in 1993 and now has more than 260,000 participating members. Gardner says that, collectively, members have shared one billion dollars in each other’s medical expenses since its inception.

Gardner himself is a member and says, prior to joining, his healthcare insurance with Blue Cross Blue Shield for his family was $1200 per month. Under MediShare, his family pays $400 in their monthly share amount and their “annual household portion”, which functions as a deductible, is $5000. So, basically he pays $5000 before he expects Medishare to start paying for anything. However, Medishare does help negotiate lower rates with providers. “One of the important things to know is that people can choose any provider they would like. There is, however, a PPO network of providers that actually has more than 700,000 providers in it; physicians, hospitals, imaging centers, that kind of thing, which helps keep costs down” says Gardner, who adds that all plans are customizable to fit the enrollee’s needs and financial abilities.

Not for Everyone

Before you run out and join, there are things to consider. First of all, there is no guarantee of payment. Secondly, there are limitations on coverage of pre-existing conditions. There are also yearly and lifetime limits that you should look into. And, one big criteria is that you must be Christian and live a Christian lifestyle. That means no tobacco, no illegal drug use, limited alcohol and no sex “outside of traditional Christian marriage.” Abortions aren’t covered and neither are STD’s or consequences of un-Christian-like behavior. One company, Samaritan Ministries, requires a pastor’s approval of medical expenses.

Gardner says this program is not for everyone and those interested must do their research. “We spend an awful lot of time educating potential members before they join so that they understand. Because a health care sharing ministry like ours may not be the best solution for someone who has a chronic condition, especially a chronic condition that has high prescription costs. It may not be a great fit,” says Gardner who adds that they are quite different from health insurance and potential members need to ask a lot of questions.
Mark Hiatt, General Manager of Hiatt Accounting Services, a CPA firm in Fishers, found that he had quite a few clients that didn’t have health insurance and so were at risk for paying penalties under the ACA mandate. He started researching healthcare sharing ministries and has recommended them to clients in situations where they could not afford traditional healthcare insurance. He says it not only saved them the tax penalty but also gave them a healthcare plan they could afford.

As for whether they are safe and provide adequate coverage, Hiatt says they are all top-rated companies that have been around for some time. “I don’t see any risk in these at all. They are very well founded.,,,I’ve never seen anything that popped up that says these are a big sham. I’ve never seen anything at all like that,” says Hiatt.
He re-emphasizes doing research into the plans however and says the big issues are pre-existing conditions and lower caps on catastrophic illness. Hiatt says these plans may be perfect for some but not for all.

Mark Lecklider is a Health Insurance and Benefits Broker and Advisor with Intelligent Insurance Network in Indianapolis, which services Hamilton County. He doesn’t sell Christian sharing ministries plans but has also done a lot of research into them to understand how they compare to standard medical insurance.

He says from what he has heard, they may be a viable option. “The opinions that I have heard from those on these plans seem to be positive so far. The individuals I have had conversations with have not had a catastrophic claims situation, so what I have heard may not be indicative of the entire population of those covered,” he says and adds, “these plans can have some requirements and restrictions on an individual’s lifestyle and choices to be able to participate. This could be an issue for some.”

Lecklider also says the plans might not be for everyone. “My recommendation is to completely understand how these plans work in comparison to plans that offer Affordable Care Act level benefits and to know the requirements you will have to be able to participate,” he says.

Illusion of Insurance

Jae Ebert and his family have been enrolled in a Samaritan Ministries plan for about a year. After leaving his job, Ebert was paying $1450 per month through COBRA for insurance for his family. After that expired his insurance was spiraling to $1750 per month. With Samaritan Ministries he is paying $430 per month He is very happy with the plan and the savings. “So far, we have not had to draw any funds from the organization but everything I read and all their reviews indicates I won’t have any issues when that time comes,” says Ebert who has a background in healthcare.

Jeremiah Downer and his family enrolled with MediShare about a year ago and are saving about $400 a month on the plan. “Our experience has been pretty good. Their customer service is really good and they’ll real helpful and answer any questions,” he says and adds “it’s been good for us”.

Tyler Ferree who is a young, single male is enrolled with Christian Healthcare Ministries. Prior to signing up for this plan, he had never had health insurance and is saving nearly $350 per month by being on a Christian Co-share plan. Ferree says so far he hasn’t had any large medical bill to submit. He says that this may not be a plan he keeps forever. “I am hoping health insurance costs come down in the future because nobody is immune to health trouble. But for someone in their 20s trying to work their way up in their career, I just cannot afford the astronomical costs for health insurance”.

There are detractors. Regulators in several states have raised the specter that these kind of plans offer an illusion of insurance and sidestep normal insurance requirements that relate to minimum cash reserves.

Other critics don’t like that the ministries are unregulated and feel they could hurt the health care industry overall. Others point to the limited services.

A check with the Indiana Department of Insurance found that they have no jurisdiction over the plans since they are not technically insurance. If they received any complaints, they would be sent to the Internal Revenue Service.

It’s an interesting alternative choice to consider in an age of astronomical healthcare coverage premiums. But many factors need to be considered. Medishare’s Gardner sums his alternative up well: “The idea of sharing is thousands of years old and that’s what our members value. They value the idea of coming together in community, of sharing with one another, and I have every reason to think that regardless of what happens in this next round of health care reform that we are going into that they will continue to faithfully share with one another.”

By Ann Craig-Cinnamon