Medical cost-sharing group claims religious targeting by New Mexico in lawsuit

Samaritan Ministries International says it has 900 members in New Mexico and 270,000 nationwide who share approximately $30 million per month to cover one another's medical costs. It says it's founded on the same type of mutual aid plans used by the Mennonites for decades in keeping with their belief in Scripture, which instructs them to "bear one another's burdens" in order to "fulfill the law of Christ."

"Each month, Samaritan solicits its members to send notes, prayers and financial support directly to their fellow member's in need, without exercising any ownership or control over that support," said a complaint against state Superintendent of Insurance Alice Kane, filed earlier this month in U.S. District Court.

The federal government has determined so-called "health care-sharing ministries" are not insurance but has granted members exception from penalties previously imposed by the Affordable Care Act on people who did not have insurance.

Many states also have exempted such groups from being regulated as insurance, although New Mexico isn't one of them. Still, Samaritan says in its 366-page complaint, it and other "fraternal benefit societies," including some secular ones, have been allowed to operate independent of such regulation in the state until relatively recently.

Three years ago, Samaritan's complaint says, the Office of Superintendent of Insurance began a campaign "to assert regulatory dominance over these sharing ministries to banish them from New Mexico." The Office of Superintendent of Insurance already has driven four similar ministries out of business and "is circling a fifth," the lawsuit says.

Samaritan hasn't yet been targeted, but the complaint asks the court to protect it from the agency's "likely enforcement actions" by declaring such forced compliance attempts unconstitutional and deeming the group entitled to "non-insurance" status under federal law. The lawsuit says Kane, who was appointed in June, "intensified" the campaign and has become unnecessarily aggressive toward such entities, issuing cease-and-desist letters ordering them to either shut down or fully comply with the state's insurance regulations.

"In so doing, [Kane] is harming the harmless, in violation of their rights to religious freedom, religious autonomy, free expression and association and equal protection," Samaritan claims.

A spokeswoman said Kane hadn't been served with the complaint yet and couldn't provide an interview until after Jan. 1. The agency declined to make anyone else available for an interview.

Proponents of such sharing ministries say they offer a sometimes cheaper option for like-minded individuals to join together in shouldering health care costs and spiritual support. Critics say the entities can mislead consumers into thinking they have health insurance when in fact the sharing ministry may not cover their medical expenses the way traditional health care does.

Because they operate largely unregulated, sharing ministries aren't required to comply with laws regarding health insurance such as those requiring the coverage of pre-existing conditions. They may also decline to cover the costs of reproductive health care.

Many — including Samaritan — also require members to adhere to a moral code dictated by the group.

For example Samaritan requires members to live by "biblical principles" that include attending church three weeks out of each month, abstaining from illegal substances and not engaging in sexual activity outside the confines of "traditional biblical marriage," defined as one man and one woman.

Samaritan claims in its lawsuit such ideological edicts are part of the reason the insurance superintendent has intensified its regulatory focus on health care-sharing ministries. It says the agency is motivated not just by a desire to protect consumers but by a desire to "protect its own insurance producers from competition" and an "animus towards the kind of conservative social and economic religious views held by sharing ministries."

As evidence, Samaritan's lawsuit points to the insurance superintendent's "endless promoting" of New Mexico's own health insurance exchange, "BeWellnm," and advisories published by the agency warning consumers about health insurance "scams" including health care-sharing ministries.

Documents in a pending case in state District Court show the agency has argued such entities operate in much the same way as traditional health insurance plans and should be subjected to the same regulations as insurance companies.

One thing is clear: Millions of dollars are at stake in the form of taxes the state collects on health care premiums and potential fines the Office of Superintendent of Insurance could collect from entities found to be operating in violation of state regulations.

A fiscal impact report for a failed 2015 bill that would have exempted such groups from regulation as health care companies noted doing so would also exempt them from paying taxes on premiums. In 2014, the state collected about $198 million from premium taxes, the report says.

In one enforcement proceeding — sparked by consumer complaints in 2020 and 2021 and now pending on appeal in First Judicial District Court — the Office of Superintendent of Insurance tried to collect fines totaling more than $10 million from Gospel Light Mennonite Church and Medical Aid Plan, doing business as Liberty Healthshare.

The amount of the proposed fine, which has a pending appeal, was later reduced by a hearing officer to $2.1 million.

Liberty has sold 502 memberships to New Mexico residents since 2014, the state said, which, multiplied by $20,000 per violation, comes to $10.04 million. The company stopped enrolling new members in New Mexico in November 2021 after receiving a cease-and-desist notice from the superintendent's office, said spokesman Keith Price.

Price called the state's actions "unconstitutional and unjustified." Every other state, he said, lets health-sharing ministries operate free of insurance regulation.

"It impacts the freedoms guaranteed New Mexico citizens by the U.S. and New Mexico constitutions," he said. "If our appeal is not successful, our members in New Mexico would be denied their religious liberties in how they provide for their healthcare."

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