Health Sharing Ministries: Are They a Good Idea?
Have you heard of Health Sharing Ministries? They have exploded in popularity over the past 10 years. In 2010, there were an estimated 100-200,000 members enrolled in Health Sharing Ministries. By 2018, that number had ballooned to well over 1 million members![i]
Some of the largest Health Sharing Ministries (aka Health Sharing Plans) include:
· Christian Healthcare Ministries
But is the hype warranted? Are Health Sharing Plans (HSPs) a good alternative to traditional health insurance? Before you decide to enroll, there are some key details you need to know about HSPs.
Remember that health care coverage is one of the most important financial decisions you make every year and one of the biggest line items in your budget. The average yearly cost for health care in 2019 was $5,193/person![ii]
An important clarification: health-sharing plans are not health insurance. Though they usually function very similarly there are some important differences you need to be aware of before joining.
Why have Health Sharing Plans seen such tremendous growth?
In 2010, the Affordable Care Act (ObamaCare) was passed. This pivotal legislation included an “individual mandate” requiring every American to have health care coverage or be forced to pay a fine. The ACA also stipulated that health insurers could not deny coverage to any applicant because of a preexisting condition.
Under the new law, any American who did not have health insurance coverage through an employer could apply for health insurance through a newly created government marketplace website. If the applicant’s income was below certain thresholds, they could be eligible to receive free health care through programs like Medicaid or CHIP, or they could be eligible to choose a private health insurance plan and get a special tax credit to help pay part of their monthly premiums.
The individual mandate was designed to help insurance companies compensate for the added expenses of covering new members with pre-existing conditions.
However, many middle-to-high income Americans without health insurance from an employer were put in a difficult spot. They had to get coverage (or pay a penalty), but the monthly premiums they were being quoted were often very expensive.
This is where health sharing plans came in. It was ruled that membership in a health-sharing plan would satisfy the individual mandate. For many families, the monthly cost of a health sharing plan was much lower than the options available through the health care marketplace. Thousands of Americans signed up as a result.
How does a health sharing plan work?
HSPs operate very similar to health insurance plans though they don’t always use the same terminology.
“Premium”
Similar to a health insurance “premium”, you have a monthly “share amount” as part of your membership. You must pay your monthly share amount in order to receive coverage. The amount is based on number of people covered, ages of people covered, and the level of coverage. Monthly share amounts typically range between $75-250/month per person.
Here is a cost breakdown from Christian Healthcare Ministries' website:
“Deductible”
Similar to a health insurance “deductible”, you have a yearly “personal responsibility” or "unsharable" amount that you must pay before your health sharing plan will cover any costs. This amount also varies based on your plan and level of coverage. These amounts usually range anywhere from $400-$15,000/year.
Overview of the "Classic Plan" from Samaritan Ministries' website:
“Copay”
Some HSPs may require you to pay a set amount for certain types of care (doctor visit, specialist visit, emergency room, etc.). However, as far as I can tell, none of the major providers that I looked into have copays.
“Coinsurance”
Some HSPs require you to split the cost of your medical bills. This means that even after you have paid your deductible (personal responsibility) your provider is only going to pick up part of the bill.
EXAMPLE: The remaining medical bill is $5000 and your coinsurance is split 70/30. This means that your plan will pay 70% ($3500) and you are responsible for 30% ($1500).
Most of the HSPs I looked into did not require coinsurance but some do.
“Out of Pocket Limit”
Health insurance plans list the maximum amount you will have to pay per year before the insurance company pays 100% of all additional medical bills. By contrast, most HSPs have a cap on what they will pay "per incident". This is a very important distinction! In the event of a catastrophic health emergency, the HSP may only pay up to a certain limit leaving you to foot the rest of the bill!
Who can use a health sharing plan?
Each health sharing plan can set their own membership requirements.
Most health sharing plans are Christian organizations designed for Christians to share each other’s medical bills. For this reason, many of these organizations ask for you to agree to a statement of faith in order to be considered for membership.
As mentioned previously, health sharing plans are not health insurance. This means that they are not required to accept members with preexisting conditions.
Why might someone opt to use health sharing plan over traditional insurance?