The Danger Behind Health Care Sharing Plans

For years now, a growing number of individuals have opted out of their employer-provided health benefits in favor of “health care sharing plans,” or “health care sharing ministries.” The proposition is simple: pay a tiny fee to buy into a plan shared by like-minded families, and when you need care the plan will pay. However, the truth is far more complicated.

 

These ministries evolved from a decades-old healthcare scheme, with their popularity increasing dramatically after the passage of the ACA. And while these organizations are often marketed as providing health benefits, they are largely unregulated, and members are sometimes left with surprising bills for some shocking reasons.
 
Are your clients seeing associates leave the employer plan for one of these schemes? Employers should share the truth about health care sharing ministries, and the dangers they pose, with their employees, so they can make an informed choice.
 

Historical Background

Health care sharing ministries trace their origins back more than a century, to largely Amish and Mennonite communities where individuals and families pooled their financial resources[1] to lessen the burden of individual debt. By the end of the 20th century, the model was adopted by more faith-based communities around the country, mainly Christian.
 
The arrival of the Affordable Care Act (ACA) in 2010 came with a special carve out for health care sharing ministries that allowed the ministries to sell themselves as a cheaper option by stripping out more expensive aspects of coverage that would otherwise be required by law. In 2010, an estimated 100,000 individuals1 were enrolled in health care sharing ministries; by 2018 that number was up to 1,000,000. According to a recent nationwide survey by the Colorado Division of Insurance, there are now upwards of 1.7 million[2] people enrolled in these plans.
 

The Catch

Anyone in our industry knows that employee benefits are subject to many regulations. That is not the case for health care sharing ministries. The main requirement they must meet is that they be registered as 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, but otherwise they mostly 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.
 
This is not necessarily good news for members. According to JoAnn Volk[3], a research professor at Georgetown University’s Center on Health Insurance Reforms, by finding a way to avoid 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 ministries2 “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.”
 
What’s more, according to Hawryluk, often 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.
 
Finally, recent investigations have found major instances of alleged 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 Plan is Here

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. Connect with us through the form below for more information on getting the message out to employers and their members.