Why Health Care Sharing Ministries May Not Pay Your Medical Bills

By Dan Rafter

Worried that your healthcare insurance premiums are too high? Looking for a less-expensive alternative that won't violate the insurance rules imposed by the Affordable Care Act? Then you might be tempted to sign up with a health care sharing ministry, or HCSM. 

Just be warned: While signing up for a health care sharing ministry will let you avoid the individual mandate penalty imposed by the Affordable Care Act, HCSMs are not really health insurance. There is no guarantee that these programs will pay out should you see a doctor, schedule surgery or visit the emergency room.

And that's the biggest drawback of these ministries, according to insurance professionals.

"The problem with health sharing ministries is that they aren't very secure," said Steve Pritchard, founder of insurance-comparison site Cuuver. "You can't guarantee that your medical bills will be shared, which means that you could be left with having to pay hefty medical bills yourself. This could set you back by thousands of dollars."

What are health care sharing ministries?

HCSMs are usually operated by non-profit religious organizations. To participate in these plans, members must agree to follow the religious organization's rules. This could mean that participants must promise to not take drugs or consume alcohol. It might mean they have to abstain from premarital sex.

Members of these ministries generally contribute a specific amount of money each month. This is known as their share. If you need medical treatment, you visit your doctor and then submit your bills to the HCSM. The HCSM then either reimburses you or pays your doctor or healthcare provider directly.

The biggest risk? There is no guarantee that the HCSM will reimburse you or pay your healthcare provider for all of your medical care. And this risk is spelled out in rules and regulations of these ministries.

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This risk, though, hasn't stopped plenty of U.S. consumers from signing up with these programs. The Alliance of Health Care Sharing Ministries said that as of the end of last year, nearly 1 million people have signed up for HCSMs.

Tom Madden, partner with Green Bay, Wisconsin-based iPlanRx, said that these plans are good alternatives for some, but not all. Consumers must do their research to determine if these ministries provide enough coverage.

"I describe them to my clients as OWAs, or 'other weird arrangements,'" Madden said. "They are a plan for anyone, but they are not a plan for everyone. Our goal is to help them filter, for them, which plans they need, insurance or OWA."

Why are HCSMs growing?

Why are they signing up? Cost is a main benefit. These programs generally cost less than does traditional health insurance. Of course, there is risk with this benefit. HCSMs might be less expensive, but they also might not cover as much. HCSMs often won't cover dental care, vision car or drugs designed to treat chronic conditions.

Others sign up for HCSMs for faith reasons. They might be opposed to some of the benefits -- namely contraception -- that traditional health insurance providers must offer according to the stipulations of the Affordable Care Act.

The Affordable Care Act also plays another important role in the growth of HCSMs. The Affordable Care Act states that people must buy health insurance that meets the act's standards or pay a penalty. That penalty for 2018 is $695 for adults and $347.50 for children who lack insurance. But if you sign up for membership in a health care sharing ministry that has existed since at least 1999, you won't have to pay that Affordable Care Act penalty.

Alex Forrest, health insurance broker with AC Forrest Insurance Group in Greenville, South Carolina, said that health care sharing ministries have long been a popular option with consumers in his part of the country. He said that in the last 12 to 18 months, he has worked with many clients who have made the move to these ministries.

The key, Forrest says, is that consumers who enroll in these plans understand both the benefits -- low costs -- and the risks -- limited coverage and possibly no coverage for some procedures.

"While there are some people who move in that direction out of theological or philosophical conviction, it honestly comes down to price," Forrest says. "They aren't for everyone, though, and each HCSM has its own idiosyncrasies and methodologies. They work well for some people, but not for others."