Health Care-Sharing Ministries as an Alternative

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Death and taxes have always been givens. But another given is high insurance premiums. Health insurance premiums have risen 20 percent since 2017. This results in the average American family paying thousands in health insurance premiums per year.

The Affordable Care Act is an alternative to some. But there are many families who earn above the financial requirements, yet can’t afford health insurance. Some of these families turn to health care-sharing ministries (HCSM). But what are these faith-based plans, and are they  viable alternatives?

Defining Health Care-Sharing Ministries

Health care-sharing ministries act as an alternative to traditional health insurance. It involves individuals who share a religious or ethical belief. Generally, HCSMs are Christian. An HCSM is not an insurance company. It’s an organization that has its participants share health care costs for a fee.

The concept of HCSM isn’t new. The organizations have been around for decades. It is thought to be derived from the biblical reference of Galatians 6:2: “Carry each other’s burdens and in this way, you will fulfill the law of Christ.”

Although it’s not defined as insurance, HCSM is often referred to as faith-based health care.

How HCSM Plans Work

An HCSM functions similarly to a credit union. A credit union is a cooperative whose members save and borrow from each other. With an HCSM, members pay monthly dues, which are often called “share.” The amount depends on the individual versus the family. The dues also reflect the plan chosen.

The monthly dues are kept in a pool that is shared among the members. Members receive assistance for medical expenses from the pool.

Most HCSMs don’t have networks. The member gives their card to the health care provider of their choice and the provider submits the bill to the HCSM. Some providers won’t bill an HCSM; in that case, the member receives the bill and submits it to the HCSM.

Traditional insurance has deductibles. But HCSMs have an annual unshared amount (AUA). This is the annual out-of-pocket the member must pay before they can participate in sharing medical bills. But often, these unshared amounts are lower than most traditional insurance deductibles.

Are Affordable Care Act Requirements Mandatory for an HCSM?

Health care-sharing ministries don’t have to adhere to the Affordable Care Act (ACA) requirements. That’s because HCSMs are not insurance companies. Instead, they are a group of like-minded people paying each other’s health care bills.

An HCSM isn’t required to cover pre-existing conditions, birth control, or substance abuse issues. And although the ACA doesn’t allow caps on coverages, some have yearly benefit caps or limitations. For example, Samaritan Ministries has up to a $250,000 limit per need. But another HCSM, Medi-Share, has no lifetime or annual sharing limits.

But there are some ACA requirements that an HCSM must follow. All members must share a common religious or ethical belief.

Members can’t lose their membership if they develop a medical condition. And they can’t discriminate based on employment or residence.

All HCSM plans are subject to an annual audit, and the results must be publicly available upon request.

Are HCSM Members Exempt From State Penalties?

Although the ACA doesn’t have a federally mandated penalty for not having health insurance, several states still do. The four states are Massachusetts, New Jersey, California, and Rhode Island. The District of Columbia also has a penalty.

But although HCSMs are not health insurance, these states and the District of Columbia have exempted the HCSM’s members from penalties for not carrying ACA health insurance.

HCSMs and Taxes

The IRS allows a deduction for insurance premiums. But HCSM fees or share amounts are not tax deductible. That’s because, as said, HCSM is not health insurance.

A member cannot use health saving accounts (HAS) with faith-based health care. An HSA only works with high-deductible health insurance plans.

Can Seniors Use an HCSM?

Medicare doesn’t cover all health care expenses. Most seniors use a supplemental insurance plan in conjunction with their Medicare.

Most HCSMs offer a supplemental sharing option for seniors 65 and older.

Pros of an HCSM

There are several pros to becoming an HCSM member. The first is they’re belief-driven. A member’s monthly fees are going to an organization and people with beliefs each member shares. This is an important reason for many people.

Affordability is another reason people choose an HCSM. An HCSM membership is usually less expensive than traditional health insurance.

The sense of community you only receive with faith-based plans means a lot when a member becomes ill. An HCSM is there if a member is diagnosed with a serious illness. This means financially, spiritually, and emotionally.

Cons of an HCSM

There are some disadvantages to an HCSM. For example, HCSMs do not have to cover essential health benefits because they aren’t required to follow ACA regulations. This includes preventative care.

Members don’t have any legal protections that their claims will be paid. A contract is not signed, so any disputes are handled by an appeal process governed in the ministry. Government organizations have no jurisdiction.

Members are sharing costs, so a member’s coverage is not guaranteed. If the ministry becomes insolvent and declares bankruptcy, however unlikely, a member would be on their own financially.

Why Faith-Based Health Care

Although there aren’t exact numbers, it is estimated that one million people are enrolled in HCSMs. Many people want to operate outside of the traditional health insurance arena, whether for financial reasons or ethical reasons. They are looking for a health care solution that is budget-friendly and religious-oriented.

The Epoch Times Copyright © 2022 The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.