Remember when the Patient Protection and Affordable Care Act (ACA) of “Obamacare” became law in 2010? That sweeping legislation was designed to bring about a new era of healthcare coverage for Americans. For instance, new government subsidies were implemented to make healthcare more affordable. At least, that was the goal.
Fast forward to today. With open enrollment in full swing, many individuals and families are shopping for the health insurance plan that will carry them through 2019. And, subsidy or no, many of these options come with sticker-shock-inducing premiums, high deductibles or both.
As a result, many people are looking for alternatives to the traditional insurance structure. One increasingly talked-about vehicle for funding your medical costs is the healthcare sharing ministry (HSM).
If you’re not familiar with these ministries, you’re not alone. While the plans have existed alongside traditional health insurance plans for decades, only since the passage of the ACA have HSMs grown in popularity.
Although they aren’t considered “health insurance” plans, HSMs provide important financial protection for families who are willing to share their healthcare expenses with other like-minded families. The goal is to keep everyone’s out-of-pocket costs low.
The main HSMs available right now include Liberty Healthshare, Christian Medi-Share, Samaritan Ministries and Altrua Healthshare. Let’s talk about how these HSMs work, and how they compare to ACA-compliant health insurance plans.
Individuals and families who choose to belong to these Christian-based ministries pay a monthly “sharing amount,” which is similar to a health insurance premium. Depending on the specific program you choose, you could enjoy many of the same perks of traditional health insurance – predictable monthly payments, discounts on healthcare, and lower out-of-pocket costs.
Let’s look at Medi-Share, the second largest health care sharing ministry in the US. Medi-Share is a cost-sharing program set up as a faith-based 501(c)3 nonprofit organization. The members share in religious beliefs and values and use these as a keystone for medical expense distributions.
With Medi-Share, members contribute a fixed dollar amount each month to their own savings account. Then, members become part of a preferred provider organization (PPO), meaning they receive pre-negotiated rates when they use providers in that network.
If a member of the Medi-Share community becomes ill and needs help paying their healthcare expenses, the member submits a request for the amount needed to cover their medical bills. If approved (either by a person appointed to the position or by committee vote), the request is paid directly to the healthcare provider by using funds from other members’ savings accounts.
Perhaps the biggest advantage of HSMs is the way the monthly sharing amounts are priced. Monthly payments for these healthcare sharing plans are sometimes significantly cheaper than traditional health insurance plans, with individuals and families often paying half the cost or less of a plan purchased through the ACA. HSMs typically offer much lower deductibles than available from ACA plans, too.
Because healthcare sharing plans are made up of “like-minded” people sharing in costs, and because they aren’t bound by ACA rules, HSMs don’t have to accept people with pre-existing medical conditions or chronic illness. If you have a complex medical history, a problem with obesity, or if you smoke, or drink too much, you may have difficulty qualifying for an HSM plan.
Additionally, since these plans are Christian-based, an HSM might not cover some services that the HSM deems unnecessary or not in keeping with its members’ beliefs. For example, HSM members generally won’t get coverage for certain types of birth control.
HSM members are also expected to be people of faith and to practice their religion regularly. The plans might even ask you to sign a statement of faith when you join the program.
And finally, unlike ACA plans, HSMs can place annual or lifetime limits on coverage. For example, a family plan with Liberty Healthcare may only cost about $450 per month, but the family is limited to $1 million in coverage per incident or illness under the most generous tier of coverage. For healthcare costs that exceed policy caps, members have to figure out how to pay on their own.
Health-sharing ministries provide an alternative to traditional health insurance. They can, in many circumstances, offer lower costs and extensive coverage. But, they do come with restrictions.
If you are looking into an HSM to cover your medical needs, be sure to weigh the pros and cons given your unique circumstances before you sign up. Read through the rules carefully. You want to make sure your healthcare needs will be covered, that your doctors are part of the HSM’s network, and that you qualify under the religious and value-based components.