Americans are spending a bigger share of their income than ever on health care costs. According to a 2018 report by the Economic Policy Institute, workers in the bottom 90% of the income scale had to pay 6.8% of their income for an employer-sponsored family health plan in 1999. By 2016, that number had climbed to 15% of average income. For some consumers, subsidized health care plans through the Affordable Care Act (ACA) offer a more affordable alternative, but these subsidies aren’t available to everyone.
In the face of these ever-increasing costs, some families are seeking an alternative in health care sharing ministries (HCSMs). These are faith-based programs that pool funds to help members cover their health care costs. According to the Alliance of Health Care Sharing Ministries, there are more than 100 HCSMs in the United States, providing care for 1.5 million people.
HCSMs work according to the same basic principle as insurance: By spreading out costs over a large group, they reduce the risk of devastating costs for any individual. However, legally speaking, HCSMs aren’t insurance products. They don’t play by the same rules, and they don’t cover the same group of people. As a result, the benefits and drawbacks of an HCSM are quite different from those of a traditional insurance plan.
How Health Care Sharing Ministries Work
HCSMs aren’t businesses, and they aren’t charities, either. Legally speaking, they’re religious nonprofit organizations that help their members share health care expenses. Here’s how they work:
- Each member contributes a monthly “share,” the equivalent of a health insurance premium. In most cases, these shares go into a general account managed by the HCSM.
- When members receive medical care, the HCSM pays their costs out of this account. In some cases, the ministry has an arrangement with certain doctors to bill it directly for the cost of members’ care. In other cases, the members must pay cash upfront and then submit a bill to the HCSM for reimbursement.
- Some HCSMs send their members a list each month showing the names of other members who have received care. This lets them see directly how their monthly shares are helping others.
Major HCSMs in the U.S. include Christian Healthcare Ministries, Medi-Share, Liberty HealthShare, Samaritan Ministries, and Altrua HealthShare. These programs vary in cost, coverage, and rules for membership. However, they all have certain features in common.
What HCSMs Cost
HCSMs have many of the same costs as traditional insurance plans, but they use different names for them. These expenses include:
- Deductibles. Most HCSM plans have something equivalent to a deductible, an amount you must pay out of your own pocket before the HCSM starts picking up your costs. Different HCSMs refer to this deductible as your “annual household portion” (AHP), “annual unshared amount” (AUA), or “member responsibility amount” (MRA). Some HCSMs set a deductible that’s a fixed amount per year, while others charge a separate deductible for each health care incident — that is, each time you receive a new diagnosis for an injury or illness, you must pay the deductible all over again. Depending on the plan you choose, your deductible could be anywhere from $1,000 to $12,000 per year or $400 to $5,000 per incident.
- Premiums. As noted above, HCSMs typically refer to your premium as your monthly share. Some HCSMs charge the same share amount to each member; others adjust your share price based on your age. Many HCSMs let you choose from a variety of different plans, paying higher share prices in exchange for a lower deductible or higher coverage limits. Monthly share costs for one person can be as low as $75 per person with a high deductible or as high as $500 with a low one.
- Cost Sharing. If you receive care from a provider in your HCSM’s network, you’ll probably have to pay a copayment to the provider at the time of your visit. The rest of your bill goes to the HCSM afterward. This fee is separate from your annual deductible. For example, Medi-Share charges members a “provider fee” of $35 for a doctor visit and $200 for a trip to the emergency room.
- Additional Fees. Some HCSMs charge additional fees, particularly for new members. For instance, you might have to pay an application fee when you first sign up for the program and a separate fee to set up your payment account. If you switch plans, the ministry may charge a switching fee. HCSMs may also charge a monthly or annual membership fee to cover administrative costs. Some programs charge an extra fee for people who have specific health conditions, such as obesity or high blood pressure, that are not being treated. Other programs take the opposite approach and offer a discount on your monthly share if you meet certain standards for good health.
What HCSMs Cover
HCSMs vary in the coverage they provide. Because they’re not technically insurance companies, they’re not required to provide coverage for all the essential health benefits defined by the ACA. In general, though, most HCSMs cover the cost of:
- Treatment in a doctor’s office or hospital
- Emergency room care
- Prescription drugs needed for a limited time to treat a specific condition
Most HCSMs do not cover many of the costs that insurance plans do. For instance, most of them provide no coverage for mental health care and only limited coverage for prescription drugs. Many of them do not cover the cost of routine care, such as checkups or immunizations. And, unlike health insurers, HCSMs can refuse coverage for anything that’s considered a preexisting condition.
In addition, most HCSMs specifically refuse to cover costs for anything they consider inconsistent with Biblical codes for behavior. Thus, they often refuse to cover the costs of abortion, birth control, out-of-wedlock pregnancy, sexually transmitted diseases, treatment for drug abuse or alcoholism, or any injuries caused by alcohol or drug use. Many won’t even cover injuries caused by activities they consider dangerous, such as rock climbing.
Finally, many HCSMs put caps on the total amount they pay out to any member. These caps may be set per month, per year, per incident, or in some cases, over the member’s entire lifetime. The amount could be as low as $125,000 per illness or as high as $1,000,000, with higher-cost plans providing higher coverage limits.
Which Doctors HCSMs Include
As a member of an HCSM, you can get care from any provider you like. However, there’s a catch. If providers know you’re using an HCSM, they may refuse to treat you (except in an emergency).
Because HCSMs are not insurance, many doctors and hospitals consider people who use them to be cash-paying patients. Getting paid in cash sounds like it should be a good thing for doctors — and it is for small bills the patient can pay upfront. However, if the provider thinks the patient is likely to need thousands of dollars’ worth of care, they may decide it’s too risky to accept them without insurance to cover the cost.
Although you can see any doctor, many HCSMs have a specific network of providers they work with, similar to a preferred provider organization (PPO). These providers are often willing to provide discounts to the HCSM’s members to save themselves the hassle of dealing with an insurer. As a result, costs are always lower if you choose a provider within your HCSM’s network.
Who Can Get Coverage
Most HCSMs are open only to Christians, and that means more than just checking a box marked “Christian” on a form. Many HCSMs require new members to sign a statement of faith and attend church services regularly.
In addition, most HCSMs make members pledge to live in a “Biblical” manner. Different HCSMs define this requirement in different ways, but nearly all of them place some limits on their members’ behavior. These can include:
- Avoiding tobacco and all illegal drugs. This typically includes marijuana use, even in states where it’s legal. Some plans also prohibit any misuse of prescription drugs.
- Using alcohol responsibly.
- Eating a healthy diet and getting regular exercise.
- Avoiding all sexual relations outside of marriage. Most plans define marriage to mean “one man, one woman” and do not allow same-sex couples to join. Some go further and ban any behavior that includes “rejection of one’s biological sex.”
Some HCSMs have stricter membership requirements than others. Some are limited not only to Christians, but to Christians of a particular denomination. For example, Christ Medicus Foundation is only for Catholics. A few HCSMs, such as Liberty, are open to people from non-Christian faiths as long as they “worship the God of the Bible” and stick to specific standards of behavior.
Advantages of Health Care Sharing Ministries
HCSMs typically aren’t subject to the same rules as traditional insurance plans. According to a 2018 report from the Commonwealth Fund, 30 states have passed laws that specifically exempt these ministries from state insurance codes. Most of these states also require HCSMs to provide a written disclaimer stating that their plans are not insurance.
To some people, this is a good thing. It means these programs are run not as businesses, but as communities of like-minded Christians helping each other. Here are some of the advantages members see of choosing an HCSM rather than a traditional health insurance plan.
1. Costs Can Be Lower
One of the biggest reasons people join HCSMs is to save money. According to the Kaiser Family Foundation, a single 50-year-old who doesn’t qualify for health care subsidies would pay an average of $630 per month for a silver-level plan purchased through the ACA Health Insurance Marketplace. But if they joined an HCSM instead, their monthly share could be anywhere from $80 to $400 per month, depending on the plan and how healthy they are.
For families, the savings can be even higher. A family with two 50-year-old parents and two teenage children would pay an average of $1,842 per month for a silver plan purchased in the marketplace without a subsidy. HCSMs could cover that same family for $250 to $950 per month. And, as a bonus, many HCSMs wouldn’t raise the family’s monthly share costs if one of them developed a serious illness.
However, it’s worth noting that most middle-class individuals and families buying health insurance do qualify for subsidies under the ACA. For example, if this sample family of four had an annual income of $100,000, subsidies would drop its monthly premiums to just $819 per month, less than the monthly share for some HCSMs. With an annual income of $60,000, they would pay only $379 per month, less than the monthly share for most HCSMs. And their ACA-compliant policy would certainly provide more coverage than an HCSM.
Still, these subsidies aren’t available to everyone. People with incomes lower than 100% or higher than 400% of the federal poverty level don’t qualify. And in several states, people with incomes below the poverty level don’t qualify for Medicaid, either — a problem known as the coverage gap.
On top of this, many workers who can’t get affordable care for their families don’t qualify for subsidies due to the Obamacare family glitch. So for those who don’t qualify for subsidies, an HCSM can be significantly cheaper than an ACA-compliant health plan.
2. They May Cover Some Non-Medical Costs
Unlike health insurers, HSCMs are sometimes willing to help with costs that aren’t directly related to medical bills. For instance, in 2012 a member of Samaritan Ministries told The Atlantic that her plan doesn’t specifically cover the cost of dental care. However, when she sent in a special request for help with high dental bills, several members sent checks to help her cover it. In addition, some HCSMs provide coverage to help members pay for the costs of adopting a child.
3. You Can Join Any Time
If you want to sign up for a new insurance plan through the Health Insurance Marketplace, you usually have to wait until the annual open enrollment period, which runs from November 1 through December 15. You can only enroll at other times if you’ve had a special “qualifying event.” Examples include losing your health coverage, getting married or divorced, having a baby, moving to a new home, or taking a pay cut. However, with HCSMs, you can sign up for coverage at any time, even if you already have insurance from another source.
4. They Promote Healthy Lifestyles
The standards of behavior most HCSMs require aren’t just “Biblical;” they’re also healthful. Nearly all HCSMs ban smoking and illegal drug use or at least refuse to cover any illnesses related to these behaviors. Most also require members to avoid other risky activities. Even their bans on sex outside of marriage can reduce the risk of sexually transmitted diseases.
In addition, some HCSMs have a particular focus on lifestyle and preventing illness. For example, Medi-Share offers a discount on share costs to members who maintain a healthy blood pressure, body mass index, and waist circumference.
Some HCSMs also offer personalized health coaching to members who have or are at risk for specific lifestyle-related diseases, such as heart disease or diabetes. These programs can help with specific goals such as quitting smoking, sticking to an exercise program, or relieving stress. However, there’s often an additional charge for this service.
5. They’re Faith-Based
For many users of HCSMs, one of their biggest attractions is their focus on faith. These organizations do more than help cover health care costs. They also connect members with other people who share their beliefs. In many cases, members dealing with a chronic illness receive not only money, but also letters of support and prayer from other members to help them through a difficult time.
However, the faith-based nature of HCSMs also means that they’re only open to people who share the group’s religious beliefs. In most cases, that means they must be churchgoing Christians. Even the few HCSMs that are open to people of other faiths require members to maintain a “Christian” or “Biblical” lifestyle.
Disadvantages of Health Care Sharing Ministries
In some ways, HCSMs can do more than health insurance. In other ways, however, they do a lot less. Because they’re not subject to the laws regulating insurance, they aren’t required to provide the same coverage insurers do. They’re also not required to provide the same guarantees about the coverage they do offer. And because they lack these guarantees, many doctors and other health providers are understandably hesitant to work with them.
1. The Don’t Usually Cover Preexisting Conditions
As noted above, HCSMs are not required to cover preexisting conditions, and most don’t. One of the ways they manage to keep their costs so low is by ensuring people with the costliest medical needs aren’t able to make any claims for them. Unfortunately, this practice excludes the very people who need health coverage the most.
For instance, Jack Truex of North Carolina told PBS he considered applying for an HCSM in 2016. However, he could not be sure that the plan would cover the costs of medication for his wife, who has Graves’ disease. He decided to stick with his traditional health insurance despite its higher cost.
Even if you think you’re in good health, it may not be good enough, because some HCSMs have a broad interpretation of what a preexisting condition is. For example, in 2006, pastor Michael Rowden of Montana sued Medi-Share after it refused to pay his bills for a heart operation. Medi-Share claimed it was not responsible because Rowden had a preexisting heart murmur that he had not disclosed. A jury sided with Rowden and awarded him $835,000 in damages, according to the Dallas Morning News.
Similarly, Evan Bates, a Dallas otolaryngologist, told Texas Medicine in 2018 that Christian Care Ministry, the parent of Medi-Share, refused to cover the cost of ear tube surgery he performed. It claimed that because the child had once had an ear infection before joining the plan, all ear problems were preexisting conditions. The parents appealed the decision, and the HCSM eventually agreed to cover the surgery. However, the plan was still refusing to cover a tonsillectomy performed by Bates on the grounds that it was for a preexisting condition.
Even cancer can be considered a preexisting condition. For instance, Christian Healthcare Ministries says cancer is not covered if you have had any “signs, symptoms, testing or treatment” of any form of cancer within the past five years. And lower-tier Altrua HealthShare plans deny coverage for any cancer diagnosed within one year after you joined the plan, because it was probably “existing” at the time you joined. In theory, an HCSM could even deny you coverage for heart disease if you ever experienced any symptoms related to it, such as high blood cholesterol.
2. Other Coverage Is Limited
Preexisting conditions aren’t the only thing that HCSMs refuse to cover. Because these plans are exempt from ACA requirements, many of them don’t cover care the ACA considers essential, such as:
- Mental health care
- Substance abuse treatment
- Prescription drugs required for more than a few months
- Routine health screenings
Even for the things that are covered, most HCSMs limit coverage to a certain total amount. That cancels out the entire point of health insurance: to protect you from catastrophic health costs.
For example, a limit of $500,000 in coverage for a single illness may sound like as much as you could ever need. But if you have a serious health problem, it’s easy to blow through that sum in a surprisingly short time. So unless you choose one of the few HCSM plans that provide unlimited coverage, such as the Gold-level Brother’s Keeper plan from Christian Healthcare Ministries, you’ll be on the hook for all expenses after that first $500,000.
3. They Don’t Work With HSAs
Many people save money on health care by using a high-deductible health insurance plan along with a health savings account (HSA). You can save pretax dollars in an HSA and use it to pay for any expenses not covered by your health plan. For instance, you can use this money for your deductible, copayments, and any non-covered expenses, such as dental or vision care.
Saving into an HSA would be a good way to deal with an HSCM’s coverage limits if it were legal. However, you can only get an HSA if you’re covered by a qualified high-deductible health plan. HCSMs aren’t insurance, so you can’t use these two plans together.
If you already have an HSA when you join the HCSM, you can continue to use the money in it for medical expenses. However, you can’t make any new contributions to the HSA unless you also keep your old high-deductible insurance policy.
4. Premiums Are Not Currently Tax-Deductible
If you itemize your deductions on your income taxes, you’re allowed to deduct any medical expenses that exceed 7.5% of your adjusted gross income. That includes not only the amount you spend on medical treatments, but also the amount you spend on health insurance premiums.
However, since HCSMs are not insurance, the cost of your monthly share is not considered an insurance premium and is not deductible. You can still deduct your actual health care bills if you use an HCSM, but not the cost of belonging to the HCSM itself.
In June 2020, the Internal Revenue Service (IRS) issued a new proposed rule that would treat monthly share payments to an HCSM as a deductible medical expense. The IRS argues that these payments can be treated as insurance premiums for tax purposes because the tax code does not provide a legal definition of an insurance plan. However, this rule has not been finalized, and if it is, it won’t take effect until the following tax year.
5. You May Have to Pay Upfront
As noted above, some HCSMs have a network of providers that treat them like insurance. If you go to one of these providers, you pay just a copayment and the bulk of the bill goes to the HCSM. However, if you go to a doctor outside this network — or if your HCSM doesn’t have a network at all — you usually have to pay your bill in full when you receive care.
Paying the entire bill upfront can be burdensome for patients, especially for expensive treatments. Even if they expect the HCSM to reimburse them, it’s not always easy for patients to raise enough cash to pay the bill all at once.
Also, getting an HCSM to pay a claim once you submit it isn’t always easy. Several Liberty HealthShare customers interviewed by the Wall Street Journal in 2019 complained that the ministry took months to pay their claims or never paid them at all. And, as noted above, HCSMs often deny claims altogether on the grounds that they’re for a preexisting condition.
In some cases, doctors and hospitals don’t just refuse to bill your HCSM for treatment, they refuse to accept you as a patient at all. For instance, if you’re seeking an organ transplant, it’s virtually impossible to get one without health insurance — and HCSMs don’t count. Dr. David Ansell, a hospital officer interviewed by Borgen Magazine, says that if you don’t have insurance, no treatment center will accept you as a patient — even if you have a willing donor and the cash to pay for the operation.
6. Their Marketing Can Be Misleading
The leading HCSMs state prominently on their websites that they are not insurance plans. However, not all plans are so scrupulous. According to the Commonwealth Fund, many HCSMs are designed to look like traditional insurance and promote themselves heavily during the annual open enrollment period for ACA health plans. After the 2017 open enrollment period, states reported a surge of complaints from consumers who signed up for HCSMs believing they were buying insurance.
Plans such as Trinity HealthShare, an HCSM marketed by Aliera Healthcare, are facing regulatory scrutiny over how they are marketed. According to the New York Times, insurance regulators in Nevada sent out a warning to consumers in December 2020 about these deceptively marketed plans.
Other states have taken more aggressive action against Aliera. CT Mirror reports that state insurance departments and attorneys general in Connecticut, New Hampshire, Colorado, Washington state, Texas, and New York have all moved to block Trinity and Aliera from marketing its plans as insurance products. They have issued cease-and-desist orders, levied fines, and opened lawsuits against the company. Even the FBI is launching an investigation, according to WSB-TV in Atlanta.
7. They’re Not Legally Binding
Suppose you have an illness you know is definitely included in your HCSM coverage. It’s not a preexisting condition, and it doesn’t run afoul of any behavior restrictions. You’ve already paid your deductible for the year, and you haven’t yet hit your coverage cap. In this situation, your HCSM should pay your medical bill in full. However, there’s no guarantee it will.
That’s because, unlike health insurance, an HCSM agreement is not a legally binding contract. Instead, it’s a “voluntary agreement” among all the members to share costs. Christian Healthcare Ministries, Medi-Share, Liberty, Samaritan, and Altrua all have legal notices on their websites stating explicitly that they have no legal obligation to pay for any member’s health care bills.
That means you have no legal remedy if your HCSM:
- Denies a claim you think should have been paid
- Says it can’t pay a bill because it doesn’t have the paperwork, even after you’ve submitted it several times
- Raises your rates without giving a reason
- Goes out of business, leaving several of your claims outstanding
Most HCSMs have a formal appeals process you can use if you think the HCSM has treated you unfairly. However, these appeals are purely internal. They don’t have any state or local law to back them up. If the HCSM rejects your appeal, your only recourse is a costly lawsuit you have no assurance of winning.
8. They Make Health Care More Expensive
HCSMs don’t just cause administrative problems for their members. According to the Commonwealth Fund, they can also raise the cost of traditional insurance for consumers all over a state.
The people most likely to join an HCSM are those who expect it to cover most of their health costs. This usually means that they are fairly healthy, with no preexisting conditions that an HCSM would refuse to cover. As more of these healthy people choose HCSMs instead of insurance, the group of people who choose traditional insurance will become less healthy on average.
Because sicker patients tend to have higher health care costs, insurance companies must raise their premiums for everyone in order to keep making a profit. This, in turn, makes insurance look even more expensive and less attractive to young and healthy people. More and more of them switch to HCSMs, sending health insurance premiums up even more.
HCSMs raise health care costs in another way as well. Greg Snider, a Medi-Share customer interviewed by the New York Times, relates that his wife needed surgery costing more than $100,000. Instead of paying the bill, Medi-Share “urged him to plead with the hospital” to lower it. Eventually, the hospital forgave most of the cost, leaving him to pay just $1,500 out of pocket.
This was good news for Snider, but very costly for the hospital. When health care providers have to accept lower payments from patients who can’t pay their bills, they make up for the loss by charging higher prices to all their other patients. This means higher out-of-pocket costs for patients and higher costs for insurers. The insurance companies respond by — once again — raising everyone’s premiums, causing health insurance costs to climb still higher.
When You Might Benefit From a Health Care Sharing Ministry
Although HCSMs don’t offer the same benefits as insurance, that doesn’t mean they’re useless. They can provide a safety net of sorts for people who, for one reason or another, cannot use a traditional insurance plan.
An HCSM could be useful for you if:
- You Can’t Get Affordable Insurance at Work. This could apply to you if you’re unemployed, self-employed, a student, or a stay-at-home spouse not covered on your partner’s workplace plan. It could also apply if the only plan available to you through your work costs more than you can afford to pay.
- You Don’t Qualify for Subsidies. Many people who can’t get affordable insurance through their jobs can qualify for an affordable subsidized plan on the Health Insurance Marketplace. However, you can’t get a subsidy if your income is too high or if it’s so low you fall into the Obamacare coverage gap. And if your spouse is employed, you and your children may not qualify on account of the family glitch.
- You Aren’t Eligible for Any Government Program. If you can receive insurance through a government plan such as Medicare or Medicaid, it will provide you with more benefits than an HCSM, perhaps even at a lower cost. In fact, some HCSMs refuse to cover you if you’re eligible for Medicare. Others state that if you have Medicare or any other form of coverage, you must rely on it first to pay all your bills. The HCSM can serve only as a “secondary” source of care for bills your insurance doesn’t pay.
- You Don’t Have Any Serious Health Problems. HCSMs don’t cover the cost of any preexisting condition, and they tend to use the widest possible definitions to determine which conditions are preexisting. If you’ve had trouble with your lungs all your life, then even if you have no diagnosed problems right now, your HCSM most likely won’t cover any lung-related problems you suffer in the future.
- You Can Meet the Plan’s Lifestyle Standards. For most HCSMs, meeting “lifestyle standards” means signing a statement of faith, attending church regularly, and having no sexual relationships outside of marriage. You must also avoid tobacco and anything else your plan considers to be a health risk.
If any of these requirements don’t apply to you, then an HCSM probably won’t save you money. However, if you meet all five of them, it probably will — at least, as long as you continue to meet them.
HCSMs are not the same as health insurance. Indeed, if you visit the website of any legitimate HCSM, you’ll find a disclaimer somewhere saying, “This plan is not insurance.” HCSMs don’t have the same limitations as insurance, and they don’t provide the same benefits, either.
Because of this, choosing an HCSM as an alternative to insurance is not a good idea. It might save you some money, but it won’t do the most important job insurance is meant to do: protect you from catastrophic health costs.
If you’re looking for affordable health coverage, your best bet is to try the usual sources first. Look at the cost of getting an insurance plan through your job, and if that’s too expensive, see what you can find on the ACA Health Insurance Marketplace. But if you’ve checked everywhere and you simply can’t find an affordable plan, an HCSM can provide you with at least some coverage at a manageable price.