With healthcare premiums rising under the Affordable Care Act (ACA), many people are turning to healthcare sharing programs as an alternative to traditional health insurance. In fact, since the passage of the ACA in 2010, enrollment in healthcare sharing ministries (HCSMs), which are often religiously based, rose from 200,000 to 530,000. Plan supporters say that these programs are more affordable and provide more choices than private plans offered through the exchange while critics say they are unregulated and could hurt the healthcare industry overall. Before you opt for a faith-based healthcare program, here are some things that you should know.
How a Healthcare Sharing Ministry Works
It’s estimated that there are around 50 healthcare sharing ministries in the country today, collectively overseeing about $60 million in healthcare payments each year. Healthcare sharing programs comprise a group of individuals with similar beliefs sharing in the costs of each other’s healthcare. Members pay monthly premiums that are then used to cover the healthcare costs of other members. Under the ACA, a healthcare sharing ministry must meet the following requirements in order for members to avoid tax penalties:
- The HCSM must be a 501(c)(3) organization;
- Members must share common beliefs, whether ethical or religious;
- Coverage must remain in place even after a member develops a medical condition; and
- The HCSM must have been in continual operation since December 31, 1999.
There are a lot of ministry-based healthcare initiatives, but few measure up to the standard for being exempted from the ACA tax penalty. Among the legitimate, long-term ministries are Altrua HealthShare, Samaritan Ministries, Christian Care Ministries (also known as Medishare), and Liberty HealthShare.
Advantages of an HCSM
There are several advantages to joining a healthcare sharing ministry, including lower premiums and a sense of community that you may not get with a traditional health insurance plan. Here are some positives to signing up.
One of the reasons many supporters like healthcare sharing ministry programs is that the premiums are often much lower than those found in the insurance marketplace. It’s estimated that members pay up to 30 percent less in premiums because there is no corporate overhead. As an example, members of Altrua Healthcare pay $538 a month for a family plan, assuming all family members are under age 39. In 2017, eHealth found that the average unsubsidized bronze plan for a family cost about $1,021 a month. Based on surface costs alone, HCSMs might seem like a better deal for many families.
Another reason that people choose a healthcare sharing ministry over health insurance is that they know where the money is going and can pray or send messages of support to that recipient. Rather than paying a premium to a big corporation, members can actually send their premium to someone who has been diagnosed with a medical problem. Members are also secure in knowing that they are not paying for surgeries that they may oppose, such as gender change surgeries. Claims are submitted to the ministry for approval based on guidelines. In some cases, the ministry disburses funds to those in need or you can send your monthly premium payment to the member directly.
It should be noted that there’s a flipside to this aspect of HCSMs in that the ministry or other members could deny reimbursement for your medical claims if they disagree with the premise or the reason you’re pursuing certain types of treatment. Medical marijuana, for example, which is legal in some states, may be frowned upon in some HCSMs, as could any number of services the ministry deems objectionable.
Unlike policies available through the ACA, healthcare sharing ministries allow you to use the doctor of your choice because you aren’t really buying health insurance. Doctors and other providers may be more willing to cut costs, too, if they know members are paying cash directly, which means some HCSM members may get discounts on medical care by shopping ahead of time. Members of these ministries also say they’re more selective in the types of treatments they pursue because they know that other people will be covering their costs via premiums. HCSMs typically encourage members to shop around to find the best deal, and there may be assistance available in helping you to find the best rates for things like specialty medical care.
Downsides to HCSMs
If the pros of an HCSM sound too good to be true, then make sure you note the downsides as well. Healthcare sharing programs aren’t insurance, for one thing, and there are some other disadvantages that will make these plans less attractive to some. Here’s what you need to keep in mind.
HCSMs are typically affiliated with specific religious sects, largely Christian, which may not be a downside if you share that faith. But these programs can place restrictions on their policies that other healthcare plans cannot. They can require that members sign a statement of faith and forbid lifestyle choices like smoking or drinking. They can also require members to abstain from premarital sex. If someone using the program should get pregnant outside of marriage, for example, the pregnancy and birth would not be eligible for reimbursement. You may also be forbidden from using contraception.
HCSMs also typically require some sort of statement or confirmation that you attend church regularly. Again, these may not be negatives to some, but you should be aware of these stipulations before signing up. As with any kind of healthcare coverage, read the fine print carefully – and ask questions – to avoid surprises down the road.
Removing healthy people from the insurance market
Critics say that healthcare sharing ministries remove healthy people from the marketplace, which is driving up premiums. They also claim that fewer healthy people purchasing marketplace plans weakens the industry as a whole. But supporters say that healthcare sharing ministries represent only 2 percent of the total insurance market and that people who have pre-existing conditions also sign up for the policies, removing them from the marketplace as well. HCSMs tend to cater to the healthy. It’s how they can keep costs low.
Another complaint levied against healthcare sharing ministries is that the services they cover are limited. Most do not cover preventive care, dental, vision or mental health services. You could end up having to cover a wide range of medical services out of pocket, especially if other members or the ministry itself deems your expense ineligible for reimbursement.
Because healthcare sharing ministries are not considered health insurance, they are not required to offer the same benefits and protections that are guaranteed under the ACA. That means you can be denied based on medical history, and you may have to submit to medical underwriting to determine your rate or acceptance. Members of HCSMs were not subject to the individual mandate, but the mandate was recently repealed as part of the tax reform bill passed on December 20, so this isn’t a benefit anymore.
Although there are advantages to using healthcare sharing ministries, it’s important to understand that the policies are not insurance but are a cost-sharing method to cover medical expenses. You must cover all of your bills upfront and submit claims to the HCSM for reimbursement. There are restrictions, and they may not cover essential health benefits that a marketplace plan will. However, these plans do give you some discretion over what your premiums will cover, and they are less expensive than marketplace plans. You’ll need to decide if the pros outweigh the cons when it comes to healthcare sharing programs.