Health Care Sharing Plans – Part 1

Health care costs seem to be rising every year, which has increased the popularity of some alternatives to traditional health insurance. These are called health care sharing plans. They operate at a cost that is well below traditional health insurance but they may be restrictive with their benefits.

To help you decide if one of these plans is right for you and your family, you need to know that a health care sharing plan is typically a faith-based organization, which facilitates voluntary sharing among members for eligible medical expenses. 

Members send in monthly “shares” (which is similar to a premium) and that share covers the medical expenses of other members. In other words, I make a payment and that payment is distributed to you for health care costs you incurred, according to the program guidelines.

The premise is that people with similar beliefs and values are coming together to share each other’s burdens, which is similar to the risk-pooling nature of regular health insurance. It is the same message we find in Galatians 6:2, “Bear one another’s burdens, and so you will fulfill the law of Christ.”

A major appeal of health care sharing plans is that they are much less expensive than regular health insurance.  Families can become members in health care sharing plans for $300 to $500 per month, compared to about $1,500 per month, which is the average unsubsidized cost of traditional health insurance coverage for a family. 

The cost is usually calculated on one or two adults, and the plans we looked at have an additional cost for children. However, it is the same cost whether you have one child or ten. In addition, health care sharing plans usually have lower out-of-pocket expense limits than typical high-deductible health insurance. 

It’s easy to see the savings appeal for people who do not have job related health care or those who do not qualify for government assistance. 

One caveat to keep in mind is that healthcare sharing plans are not actually health insurance. One of the reasons they’re less expensive is that their coverage may be more limited. Their limitations of coverage are based not only on managing potential costs and claims, but also the faith-based nature of the programs in the first place.

While health care sharing plans do cover many ordinary medical expenses that health insurance covers, they typically do not cover many health-related costs deemed to be unbiblical. They may exclude payments for birth control, injuries related to alcohol or drugs, and injuries from certain hazardous activities (or even failure to wear helmets or seat belts in some situations.)

To become a member, health care sharing plans may require you to sign a statement of faith, and in some cases, they may verify regular church attendance and have your church membership validated by a church leader. The requirements vary by program, but are very similar.

Even though it may seem like a group of people pooling risk and sharing expenses is the definition of insurance, it isn’t. There are some key features of health insurance which health care sharing plans lack. Insurance is a legally binding contract between an insurer and the insured. But everything in the health care sharing plans is voluntary and not binding. Health care sharing plans do not guarantee compensation for specified loss, damage, illness, or death in return for payment of a premium.

Even though they are not health insurance they rely on a similar framework, but use different terminology. 

Here are some common health insurance terms, and their health sharing program equivalents:

  • Deductible = Personal Responsibility, Annual Household Portion (AHP), or Annual Unshared Amount (AUA)
  • Premium = monthly share
  • Claim = eligible event, incident, or illness
  • Explanation of Benefits (EoB) = Explanation of Sharing (EoS)

Health care sharing plans are designed to mimic insurance, and have successfully done so for decades to the tune of billions of dollars of facilitated sharing payments. 

In a time of rapidly increasing health insurance costs, people are turning to this alternative option more frequently. All of the major healthcare sharing groups have seen dramatic increases in membership over the last few years, with total membership now over one million people between the four major programs. 

You can find information on the web arguing how good or bad each of these programs are. In general, the website of each program is very clear about what is covered and is not—even if what they do and don’t cover isn’t always the same as traditional health insurance. And, of course, each program works differently from traditional insurance. 

And each of the healthcare sharing organizations has multiple options. And, to make it more complicated they all have their own unique approaches, pros, cons, and quirks. 

With an understanding of what these programs are, how they work, and some of the differences between healthcare sharing and regular health insurance, what should you do?

On one hand, there is considerable risk in joining these programs, as your health and even your life may be at stake. 

However, there are many people for whom these health care sharing options are working very well. Their needs are covered, and they are saving hundreds of dollars (or more) every month. 

But it’s a decision each individual needs to make based on their own situation, the price, moral appeal, and acceptance of the various coverage gaps and risks. And even being aware of the gaps, doesn’t mean it’s easy to know the risks. 

Being willing to accept those risks is a very personal decision that YOU have to make based on personal research. Nobody can make that decision for you.

The major health care sharing plans, are listed below. Most of them have an online calculator to determine your costs. There are “contact us” forms on their websites where you can request further information. And most of these sites have an online chat option. 

If you are considering a health care sharing program, we highly encourage you to do extensive homework. Look at the company, how long they have been in business, comments from members, all the different options and especially what they will and will not cover.

When making a decision such as this, which has such a potentially significant impact on your life and wellbeing, we also encourage you to pray for wisdom!

Join us next week for Healthcare Sharing Plans – Part 2. We will be having a discussion about things to beware of because they are not covered or coverage is limited.

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