Editor’s note: The Affordable Care Act has positively and negatively affected hundreds of thousands of people so far. In an effort to help those who’ve been negatively impacted, we explore the little known world of health care sharing ministries. If you are aware of other viable solutions to keep costs down, please feel free to share.
There has been no shortage of controversy surrounding the passage and implementation of the Patient Protection and Affordable Care Act, also known as Obamacare. Opponents of the law loudly objected to many of its provisions from the beginning, and the rollout of the chronically ill Healthcare.gov website was impotent at best.
I’m an amateur personal finance geek.
Your tools have helped me become a smarter investor.
Personal Capital Dashboard User, February 2021
Since then, a barrage of lawsuits have accused the President of everything from doling out illegal subsidies to enforcing an unconstitutional individual mandate. But it gets more complicated. This summer, the Supreme Court of the United States ruled 5-4 that for-profit companies cannot be required to pay for certain types of birth control they find objectionable. This ruling set off a firestorm among conservative groups who disagree with the law on religious grounds. Not only that, but the conflict that followed may have spurred additional interest in a little-known provision of the ACA that allows individuals to sidestep it altogether- health care sharing ministries.
What is a Health Care Sharing Ministry?
According to HealthCareSharing.org, a health care sharing ministry is “a health care cost sharing arrangement among persons of similar and sincerely held beliefs.” Commonly pursued by those of Christian faith, their members seek to adhere to Galations 6:2, which says to “bear one another’s burdens, and thus fulfill the law of Christ.”
However, unlike health insurance, health care sharing ministries do not guarantee payment of any medical bill, nor do they accept government funding or grants.
How Do Health Care Sharing Ministries Work?
Similar to traditional health insurance, members of health care sharing ministries send in a monthly “share” or “pledge” that is then pooled to pay the outstanding medical bills of the group. Monthly “share” amounts vary by ministry and are based on factors such as age and family size. However, unlike those with traditional health insurance, members of health care sharing ministries are typically required to pay out-of-pocket for preventative care such as well visits, colonoscopies, and mammograms. Here are some other notable ways healthcare sharing ministries differ from traditional health insurance:
- Unlike health insurance plans in the post-ACA area, health care sharing ministries are not required to accept customers with pre-existing health conditions.
- Since health care sharing ministries are not governed by the same rules as traditional health insurance, the plans they offer can include lifetime caps on coverage. (Since the passage of the PPACA, traditional health insurance plans are no longer allowed to implement lifetime caps on coverage)
- Since it is not traditional health insurance, health care sharing plans are not required to cover services or products they find objectionable. Services not covered by health care sharing plans can include things like birth control, smoking cessation, and drug rehab.
Who Qualifies for a Health Care Sharing Ministry?
Not only are certain procedures not covered, but health care sharing ministries also have strict guidelines as to who they are willing to accept. For example, Christian Healthcare Ministries states on their webpage that “participating adults must be Christians living by biblical principles, including abstaining from the use of tobacco and the illegal use of drugs (1 Corinthians 6:19-20), following biblical teaching on the use of alcohol, and attending group worship regularly if health permits (Hebrews 10:25).
In other words, you must go to church. Another sharing ministry, Christian Medi-share, takes their scrutiny a step further by requiring its members to not only have a verifiable Christian testimony and attend church regularly, but to only engage in sexual activity within a committed Christian marriage. And how do they verify that, exactly? I’m not sure. A third ministry, Liberty Healthshare, takes a much more lenient approach with its customers by requiring that they abstain from using tobacco products, illegal drugs, or alcohol, and agree to their shared beliefs, including these:
- We believe that our personal rights and liberties originate from God and are bestowed on us by God, and are not concessions granted to us by governments or men.
- We believe every individual has a fundamental religious right to worship the God of the Bible in his or her own way.
- We believe it is our spiritual duty to God and our ethical duty to others to maintain a healthy lifestyle and avoid foods, behaviors or habits that produce sickness or disease.
Because of their vague and somewhat open set of guidelines, Liberty Healthshare remains the most liberal of the group, claiming to accept customers of all religious faiths and backgrounds, including those with alternative lifestyles and sexual orientations.
Are Health Care Sharing Ministries Cheaper?
According to the ministries who offer these programs, enrollment in health care sharing ministries ballooned through the first year of the implementation of the Affordable Care Act, and now includes more than 300,000 customers. Many of those customers have undoubtedly joined based on religious beliefs alone-including the fact that ministry plans are not required to cover services such as abortion and drug and alcohol-related illness.
Other customers join health care sharing ministries in order to comply with biblical principles that call on them to “bear each other’s burdens,” as Galations 6:2 suggests. But what about the rest? A growing body of research seems to indicate that many ministry customers- some religious and some not- have chosen to opt out of traditional health insurance due to financial reasons alone. In other words, health care sharing ministries are cheaper.
Remember, health care sharing ministries are not required to accept customers with pre-existing conditions or pay for preventative care. Not only that, but they are also non-profit entities at this point, with no motive to bring in a profit beyond paying for administration of the plans. Further driving down costs is the fact that, unlike health insurance, sharing ministry plans can place lifetime caps on their policies. All of those changes mean that premiums or “shares” offered through sharing ministries wind up being cheaper than traditional health insurance in the post-ACA era.
Sharing Ministries vs. Traditional Health Insurance
According to government number-crunchers, the U.S. spends more per capita on healthcare that any other industrialized country- currently around 17% of GDP. And it is expected to get worse. As you can see in this chart, the Centers for Medicare & Medicaid Services projects that the cost of healthcare in the U.S. will double by 2022. With those kinds of numbers on the horizon, it’s no wonder that so many cost-conscious families have put some serious thought into switching from traditional health insurance to a health care sharing ministry. But, how much would they save? Let’s start with my own family.
There are four of us, ages 34, 35, 5 and 3, and we currently reside in a suburb just north of Indianapolis, Indiana. Since we make over 400% of the FPL (Federal Poverty Limit), or more than $94,000 per year, we do not qualify for subsidies that would lower the cost of traditional health insurance and must absorb the full premium cost of any plan we purchase. (See Related: Obamacare: The Good, the Bad, and the Ugly)
This below chart compares how much we would pay if we chose the cheapest traditional health insurance plan available in our county and state in 2014 and what we would pay if we chose the best coverage offered by each of the main health care sharing ministries: Now, keep in mind, it is actually much more complicated than this chart would have you believe. For the sake of simplicity, I only included the most expensive plan offered by each of the ministries mentioned and I didn’t include any of the add-ons that they offer, such as extensions on lifetime caps. For example, Christian Healthcare Ministries offers a program called “Brother’s Keeper” which covers costs over and above $125,000 per illness.
Likewise, Samaritan Ministries offers a “Save to Share” program that covers costs for members whose medical costs exceed $250,000 for a specific medical need. Still, when you compare these plans with the cheapest traditional health insurance plan with a $12,000 deductible, the cost savings are evident. With potential savings of more than 50 percent, it becomes easy to see how a family with few health problems would throw caution to the wind and take their chances, right?
Health Care Sharing Ministries: An Alternative to Obamacare
Beyond financial constraints and religious objections, many people are signing up for health care sharing ministries simply to avoid paying the individual mandate tax that the PPACA assesses on individuals who fail to purchase qualifying coverage during any given year. In 2014, the penalty only amounted to $95 or 1 percent of household income, whichever was greater. However, by 2016, the penalty will climb to $695 per adult or 2.5 percent of household income. No matter which side of the debate you are on, that’s a lot.
The bottom line is this: Health sharing ministries, while not perfect, do provide an alternative for people who cannot afford the new ACA-approved plans or object to them for political or religious reasons. And with healthcare costs expected to double over the next decade, it is safe to say that healthcare sharing ministries are here to stay.
Reders, Have you heard of health care sharing ministries? Would you consider joining one? Why or why not?
Note: ObamaCare was signed into law in March of 2010, requires you to have insurance by 2014, expands Medicaid in 2014, and requires large employers to insure full-time workers by 2016. Open enrollment in ObamaCare’s marketplace ended March 31st, 2014. The next open enrollment starts November 15th, 2014.