It is no secret health care costs are rising. For consumers trying to decide what insurance program is best, or whether to skip coverage all together, there is another option: health sharing programs.
There are two main health sharing programs: Medi-Share and Christian Healthcare Ministries. Both pool money from members to pay medical claims. But since they are not insurance plans, there are different rules, such as coverage for pre-existing conditions can be limited.
“The bottom line on the health sharing plans, it is an affordable option for individuals to go to for some type of financial protection from medical expenses,” says Mike Dietz of Midwest Insurance Brokerage in Appleton.
Dietz says many people choose a health sharing program because they feel there is no other option.
“Regular health insurance options were just too expensive once you add in the monthly fee and the deductible,” says Dietz, adding he uses Medi-Share to cover himself, his wife and child.
Dietz and his family are part of a growing trend. An estimated 1 million consumers have joined a health sharing program, up from 160,000 people in 2014. The Affordable Care Act, which recognized these programs as an alternative form of insurance, went into effect in 2014, and more people opted for sharing programs versus regular insurance to avoid paying the individual mandate penalty.
Whether it is Medi-Share, Christian Healthcare Ministries or another health cost-sharing plan, they all work the same: Money collected from members is pooled to cover the bills that come in.
Don’t call it insurance
Cost-sharing programs were created in the late 1980s by people who did not want their health care dollars to pay for procedures or care they found to be in a violation of their religious beliefs, such as abortion and coverage of contraception. Once the ACA classified the programs as an insurance alternative, and in response to rising insurance premiums, more people turned to them as a cost-saving measure.
Consumers can purchase the plans directly by going to the plans’ websites or by using a broker like Dietz.
While saving money on health care costs is a big attraction, sharing programs are not insurance, so the regular terms and rules do not apply.
“Programs like Medi-Share are not for everyone. Consumers need to remember that insurance is a guarantee, while Medi-Share is a promise” for coverage, Dietz says. “But while there are risks and limitations, it is at least a price that people are willing to pay.”
The programs are not regulated by the government, so if a consumer has a problem with a claim or benefit, the state cannot step in to help, says Elizabeth Hizmi, public information officer with the Wisconsin Office of the Commissioner of Insurance.
“There’s not even a place where they could register a complaint with us since we only work with insurance programs,” she says, adding the programs are not required to stay solvent or keep reserve funds on hand like insurance companies.
The plans are also not required to accept everyone who applies. Consumers can be turned away if they have a pre-existing condition or do not attend church regularly.
Individual programs have their own rules about coverage.
For example, some plans may not cover costs associated with what the plan deems to be morally corrupt behavior, such as the treatment of sexually transmitted disease, contraception coverage or the pregnancy of an unmarried member. Other plans may not allow consumers who smoke to register and ask for proof the member belongs to a church.
Consumers with pre-existing conditions also need to be careful since coverage may be limited or they could be denied entry into the program, Dietz says.
“I tell people looking at these plans to be aware about the pre-existing condition coverage,” he says, adding some plans
may extend coverage to cover those conditions on a case-by-case basis after a couple of years.
Dietz says cost-sharing plans require people to become better consumers of their health care. He explains a consumer could see an independent nurse practitioner and pay $50 in cash for a visit or see a health care provider within a health care system and have his insurance billed $175 for that visit. Since more consumers have high-deductible bills to keep their monthly premiums down, they end up paying that $175.
“Health insurance premiums will continue to go up until people become consumers and shop for health care products and services on price, quality and service,” he says.
A medical cost-sharing program is not health insurance, so it uses different words and phrases to describe familiar insurer terms, such as deductibles and premiums.
Instead of using the word premium, members of a medical sharing plan pay a monthly share amount. In most cases, the cost is between $300 and $500 based on family size.
Deductibles are known as annual personal responsibility costs in cost-sharing programs. Both work the same: Once a consumer reaches the limit, the plan picks up the cost.