Health care sharing plans: Is there a better option?

If you could reduce the cost of your monthly health care, and still get the care you needed, wouldn’t you be interested? Of course, you would. It’s the simple proposition at the heart of the appeal of “health care sharing plans,” also known as “health care sharing ministries.”

They evolved from a decades-old health care scheme and have rapidly grown in popularity since 2010. The idea is that a group of people, usually with a shared religious belief system, pool their money to pay for the medical needs of each other. However, as many Americans are discovering, these largely unregulated “plans” can leave their members with surprising bills for some shocking reasons.

Clients should be aware that their employees may be tempted to join a health care sharing ministry. Brokers should make sure their clients are ready to educate their employees about what these plans and the dangers they may pose.

From the beginning

The roots of health care sharing ministries go back more than a century, to primarily Amish and Mennonite communities where individuals and families pooled their money to alleviate the burden of individual debt. By the end of the last century, the model was adopted by more faith-based communities around the country, mainly Christian.

With the 2010 passage of the Affordable Care Act in 2010 and its individual mandate, health care sharing ministries were granted certain carve-outs from the requirements of the law. This allowed the ministries to provide a cheaper option by stripping out more expensive aspects of coverage.

At the time of the bill’s passage, an estimated 100,000 individuals were enrolled in health care sharing ministries; by 2018 that number was up to 1 million. According to a recent nationwide survey by the Colorado Division of Insurance, there are now upwards of 1.7 million people enrolled in these plans.

What’s the catch?

These ministries are subject to very few rules. They must be 501(c)(3) organizations based around shared beliefs, and have been in operation in some form since Dec. 31, 1999. There are additional rules about nondiscrimination, audits, and guarantees that members won’t be dropped due to developing a medical condition. Aside from that, they largely have a free hand in determining what they will cover, setting conditions for eligibility, deciding how much they will pay, and even the timeline for any reimbursements.

What does that mean in practice? According to JoAnn Volk, a research professor at Georgetown University’s Center on Health Insurance Reforms, by operating as non-profit organizations outside of ACA oversight, “healthcare sharing ministries claim an exemption from federal and state insurance laws, so there's no guarantee that the organization maintains funds sufficient to pay claims and certainly no guarantee that they will, even if the funds are there. … There are no solvency requirements, no requirement to pay members in a timely way - no requirement to pay at all. It really is just a matter of faith that claims will be paid, though the marketing typically suggests otherwise.”

According to KFF Health News senior Colorado correspondent Markian Hawryluk, these plans “won't cover pre-existing conditions. There are moral clauses in here, for example, they won't cover things like abortion, birth control, often mental health care. They won't cover chronic medications. They won't cover out of wedlock births. Or if you have an injury due to alcohol use or drug use, illegal drug use, they're not going to cover those things as well.”

In addition, according to Hawryluk, many of these plans require their members to attempt to have their care covered by the government or hospital as a charity case before they even submit a bill to the plan for reimbursement.

Adding insult to injury, recent investigations have uncovered instances of enormous alleged instances of financial malfeasance from plan administrators who stand accused of funnelling millions of dollars away from member care for some of the country’s largest health care sharing ministries.

A better option

Given the risks of claims being ignored or rejected, the lack of regulations around solvency, and the added administrative burdens placed on them, members should ask themselves if a cut-rate version of health care coverage is worth the cost, and brokers need to make sure employers are giving their members a better choice in employee benefits.

Shea Welch is vice president of product, managed care and marketing strategy at Luminare Health Benefits. Contact him at [email protected].

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