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Medical Sharing- Healthcare Sharing Ministries

Over the past several years, millions of individuals and families have lost their healthcare insurance because their plans did not meet the standards required by the Affordable Care Act, also known as Obamacare.  Others have found the health insurance plans available to them are unaffordable, and some object to participating in Obamacare on moral grounds.  As often happens, laws and tax codes are designed to shape human behavior and society will find their own creative solutions to their dilemmas.  There is an alternative solution for those who might prefer something other than federal health insurance under Obamacare or conventional health insurance.  These alternative plans, offered by healthcare sharing ministries (“HCSM”), are not considered traditional insurance, but as ministries that allow people to share their health expenses for the common good.

Membership in an HCSM offers protection from large medical expenses and while it is not insurance, it is generally comparable to traditional health insurance.  Each HCSM works a little differently, but generally they all operate in a similar fashion.  Insurance companies charge premiums in order to purchase a policy, while health care sharing plans set a contribution amount that each member is responsible to pay. The contribution amount is based on a number of criteria, including family size, ages, and the amount of financial responsibility a member accepts before sharing kicks in (similar to a deductible).  The members are also responsible for a certain percentage (up to a set dollar amount) of their medical bills, which is similar to co-insurance.  Eligible medical bills are then paid from an escrow account that is funded by the HCSM contributions.  The total cost of HCSM membership is often more affordable for most, relative to conventional health insurance.

Here are a few facts to consider about HCSMs.  Depending on your particular situation, some of these may be considered a pro or a con.

  1. Members must adhere to guidelines for membership and must adhere to a healthy lifestyle. Members have the assurance that they aren’t supporting what they might consider immoral or reckless lifestyles, or paying for procedures that go against their conscience. Many HCSMs require their members to be practicing Christians, but one ministry only requires members to subscribe to an ethical commitment to religious liberty.
  1. Some members of ministries are considered to be self-pay, while some are considered to be part of a private healthcare system. They all typically offer a network of medical providers, similar to traditional health insurance.   Traditional insurance companies play a major role in negotiating discounts for policy holders, which are typically very substantial compared to the retail price.  While health care sharing ministries negotiate as well, due to the relatively small number of participants, their ability to do so is more limited.  As a result, participants may carry an increased responsibility for negotiating price with health care providers.  This increases financial risk.
  1. There are limits on coverage, particularly for someone with a pre-existing condition. Additionally, upper limits on benefits could leave someone with substantial bills in the event of a serious illness or medical condition.
  1. The ministries publish the bills eligible for sharing and coordinate the direct sharing of medical costs between members. You will know every month whose bills you are paying, and what services they are receiving.  Conversely, when you have eligible bills, that information will be shared with other members.  This system is not the most private, yet facilitates a platform allowing members to pray for each other and offer emotional support.
  1. Members of HCSMs are exempt from Obamacare’s individual mandate penalty for not having healthcare coverage, even though ministries are not technically insurance. It is important to note that Obamacare only exempts members from the Obamacare tax if the ministry has been operating since at least 1999.
  1. At the present time, members may not participate in a Health Savings Account. Currently, these tax-free medical savings accounts work only with high-deductible health insurance plans.

Sharing ministries are not for everyone.  But for many people, including those currently uninsured or with insurance but looking for alternatives, sharing ministries are an option that merits consideration.  If this is something you would like to learn more about, the following ministries are the only five available: Samaritan Ministries, Christian Healthcare Ministries, Christian Care Ministry (also known as Medi-Share), Liberty Healthshare and Altrua Healthshare.

Written by

Gregory C. Luke, ESQ.

Greg joined THOR in 2002 and is a member of the Wealth Management team. Before joining THOR, Greg spent 12 years in the private practice of law. While practicing law, Greg's main focus was business and estate planning, tax, charitable planning and estate administration.

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