With high unemployment and average annual health insurance premiums topping $5,000 per person, thousands are forgoing traditional health insurance for medical sharing plans–programs in which members share each other’s healthcare costs. But while such programs can save you money, they may pose other risks, consumer advocates say.
Christian medical sharing plans are faith-based programs in which you pay a monthly fee that goes toward the medical costs of other members. In return, other members chip in to take care of your medical bills. The programs are not considered insurance plans, and they received an exception from the Patient Protection and Affordable Care Act, so members won’t have to buy health insurance under the law’s individual mandate.
“We don’t do this because we have a problem with insurance,†says Tony Meggs, president and CEO of Melbourne, Florida-based Christian Care Ministry, which offers a medical sharing plan called Medi-Share to approximately 50,000 members. “What attracts people to our program and the other ministries is this idea of how the early church came together and shared their resources to take care of each other.â€
To be eligible for such programs, you must adhere to Christian principles. For example, you might have to agree to a statement of faith, attend church regularly, and refrain from premarital sex and illegal drug use. If you have a medical condition that results from what the group considers to be a non-Christian lifestyle, such as a pregnancy outside of marriage, the condition won’t be covered. “These programs aren’t for everyone,†admits Meggs.
Members typically pay an administrative fee and a monthly contribution for medical expenses. For example, Samaritan Ministries International, another Christian medical sharing plan based in Peoria, Illinois, charges $150 a month for singles, $300 for a couple, $215 for a single-parent family, and $355 for a two-parent family. With approximately 65,000 people (21,000 families) taking part in the program, Samaritan Ministries raises more than $5 million per month for medical sharing, says Executive Vice President James Lansberry. The organization then determines where the contributions go, “so I share with one person and that person I’m sharing with may be sharing with someone else completely,†Lansberry adds.
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But when you get sick, there is no guarantee your ailment will be covered in part or in full. These programs are strictly voluntary, both Lansberry and Meggs point out. The members or a member-elected board determines what types of conditions are eligible for sharing. For example, Medi-Share doesn’t cover routine wellness visits. Samaritan Ministries won’t share dental or vision costs. The factors surrounding a sickness or injury may also make a difference. For example, Medi-Share states on its website that members won’t pay for injuries from a car accident if the vehicle “was used in a race, to perform a stunt, or in the commission of a crime.â€
There may also be limits to how much an individual can receive. For example, Medi-Share will pay up to $1 million per year for an individual, with a $5 million lifetime limit. There are also cases in which pre-existing conditions won’t be covered, prompting criticism from consumer advocates.
“These programs often discriminate against those who have pre-existing medical conditions and may decide to exclude a member who develops a medical condition
after becoming a member,†says Ronda Sloan, a spokeswoman for the Kentucky Department of Insurance. “This could have devastating financial and medical impacts on a consumer.†There are other reasons consumers should think twice before signing up for such plans, Sloan says.– You won’t have consumer protections offered by your state insurance department, which regulates insurance companies that operate in your state.
– You lose a key benefit of the Health Insurance Portability and Accountability Act (HIPAA) of 1996. If you change insurance providers, you can avoid lengthy waiting periods for the coverage of pre-existing conditions if you haven’t had a break in insurance coverage of more than 63 days. Since medical sharing plans aren’t health insurers, “consumers who buy one of these products could encounter a waiting period before pre-existing conditions are covered under any future health insurance plan [before the new law is implemented in 2014],†Sloan says.
– You risk hurting your credit if the medical sharing plan refuses to pay or pays slowly.
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Some medical sharing plans have had their share of legal
troubles. For example, the Supreme Court of Kentucky ruled in 2010 that Medi-Share operated as an unauthorized health insurer in that state and should therefore be subject to stricter regulations. The evidence used in the case was outdated, so the ruling is no longer applicable, Meggs says. However, the Department of Insurance disagrees and has asked that Medi-Share cease operation in that state. Litigation in the case continues.OTHER HEALTHCARE OPTIONS
While medical sharing plans may be appealing to some, consumers should check into other options before making a decision.
The Pre-Existing Condition Insurance Plan, a federal high-risk pool, providescoverage to those who have been denied coverage because of pre-existing conditions.
The National Association of State Comprehensive Health Insurance Plans provides information for state high-risk insurance pools for hard-to-insure individuals.
GradMed offers short-term major medical coverage for graduates of nearly 200 colleges and universities across the country.
We encourage consumers to call insurers and inquire about the plans available, which may range from plans with rich benefits to plans that provide a safety net for catastrophic events,†Sloan says.