Health care in the United States can be summed up in two words: complicated and expensive.
For those that can access and afford health care in the United States, many would argue that the US health care system is the best in the world. But what about those who can’t access care? Or can’t afford it.
The Affordable Care Act, more commonly referred to as Obamacare, greatly expanded access to the health care system. Today in the United States you are essentially guaranteed health insurance that does not – and cannot – discriminate based on pre-existing conditions.
Obamacare was a huge step for the country. For years health care was a personal issue for millions who had claims denied due to pre-existing conditions, or couldn’t access health care at all.
I have been priveleged in my life to always have insurance through my parents or an employer. If it wasn’t for modern medicine or health insurance, there is a good chance that I wouldn’t be alive today. I spent a week in the ICU years ago due to asthma. My memory of that night in the ER was one of slipping in and out of consciousness and having ten doctors surrounding my bed, treating what certainly was my airways closing in tightly, restricting my ability to breathe.
Later in life I had two sinus surgeries and received five years of allergy immunotherapy. If health insurance companies were able to discriminate based on pre-existing conditions I would have had to pay for all of it out of pocket, or put up with the ailments daily, with little relief.
Despite access, expanding, affordability is still a major issue with the US health care system. One of the great ironies of the Affordable Care Act is the fact that “affordable” is in the title.
One reason health insurers historically have been able to keep premiums and deductibles low is the fact that they could discriminate based on pre-existing conditions. Organ transplants and cancer care, for example, can cost $100k+ easily. Being able to deny those claims based on pre-existing conditions saves money. Being pregnant when you start your insurance plan was a pre-existing condition, making it possible for health insurers to deny claims related to the pregnancy.
If we are honest with ourselves we all know that discriminating based on pre-existing conditions shouldn’t be possible. Which brings me to my biggest complaint about health sharing ministries: they discriminate based on pre-existing conditions.
Health Sharing Ministries are not Health Insurance…or are they?
If you aren’t familiar with health sharing ministries, they essentially are a way for people to voluntarily band together and share medical costs among themselves. Legally health sharing ministries are not health insurance because they do not take risk. Health insurance involves an individual having a contract with a health insurer who is legally obligated to pay medical expenses based on the terms of the contract. Health sharing ministries are entirely voluntary and the health sharing ministry itself does not pay claims; they simply facilitate the spreading of the voluntary monthly contributions.
Because health sharing ministries do not take risk they are not regulated like health insurance companies. They can – and do – discriminate based on pre-existing conditions. Besides being required to cover pre-existing conditions, health insurers must also provide a certain minimum coverage. Health sharing ministries do not; after all, legally they are not health insurance.
The voluntary nature of health sharing ministries is important, as that aspect of it legally (key word: legally) puts it in a different category than health insurance. But there is no denying that health sharing ministries are being used in place of health insurance.
The reason why is simple: it’s cheaper!
Many (most?) who take advantage of health sharing ministries are not eligible for Medicaid or Medicare, and do not have health insurance through an employer. The remaining option is getting coverage on the individual insurance exchange that was created through ObamaCare. The problem is that this insurance can be expensive, with high monthly premiums and high deductibles, especially for middle class to upper middle class families whose income disqualifies them from subsidies.
It’s worthwhile to note that the pricing of insurance through the exchanges is not because companies are making billions of dollars on the exchanges. In fact, UnitedHealth Group, the largest health insurer in the United States based on membership, exited most exchanges after losing over $700 million on their exchange business in 2015. That means they needed to price the plans even higher just to break even.
Let’s put ourselves in the shoes of someone who faces a high cost to have health insurance through the exchange. Perhaps they utilize health care minimally and haven’t had an emergency or high cost episode (i.e. surgery, trip to ER, overnight hospital stay) in years. They eventually may look at their premium and deductible and think “this just isn’t worth it.” But let’s also say that individual or family doesn’t want to completely forgo the protections of health care coverage.
Cue health sharing ministries.
If you read the fine print of a health sharing ministry, they are able to keep their costs low by, in essence, shutting out those with pre-existing conditions. There are also a ton of things they don’t cover, such as durable medical equipment (nebulizers, hearing aids, oxygen tanks, ventilators), mental health care, and emergency room visits that were later determined to not be an emergency (from how I interpret section IV.B.9 you have to know prior to going to the ER that you are actually having an emergency).
See page 15 of this document from Liberty HealthShare (last accessed June 15th, 2019), which lays out the limitations on pre-existing conditions:
Pre-Existing Conditions. A condition for which signs, symptoms or treatment were present prior to application, or can be reasonably expected to require medical intervention in the future, need to be declared upon application for Liberty HealthShareSM membership, and updated with any new symptoms/signs or diagnoses that become apparent after the application submission. Failure to declare a medical condition upon application, or failure to update Liberty HealthShareSM after application, may preclude sharing in that condition any time in the future. Failure to fully disclose known or suspected pre-existing condition information at the time of application and before Enrollment Date is a violation of our shared trust between members and may subject the member to termination of membership. Chronic or recurrent conditions that have evidenced signs/symptoms and/or received treatment and/or medication within the past 36 months are not eligible for sharing during the first year of membership. In the absence of a Permanent Waiver, after the first full year of continuous membership, up to $50,000 of total medical expenses incurred for a pre-existing condition may be shared in total during the second and third years of membership. Upon the inception of the 37th month of continuous membership and thereafter, the condition may no longer be subject to the pre-existing condition sharing limitations. Appeals may be considered afor earlier sharing in surgical interventions when it is in the mutual best interest of both the members and the membership to do so.
In their defense, they do set a limit of $50k after one year of membership and after three years, the pre-existing condition is no longer subject to the $50k limit. But many who have pre-existing simply don’t have the luxury of being exposed to this type of risk. After all, even if you do last the three full years to have the pre-existing condition tag removed, there is no guarantee your bills will be covered by the health sharing ministry.
When you factor in all of the fine print of health sharing ministries, some of which would be illegal for health insurers to include in their plans, it’s obvious why health sharing ministries are affordable alternatives to traditional health insurance. So while it’s legally not health insurance, it’s absolutely being used by hundreds of thousands as a direct alternative to health insurance. Which leads me to my next problem with health sharing ministries: they hurt those who need care the most.
Health Sharing Ministries Hurt Those Who Need Care the Most
Affordable health care for all can only be achieved in a couple of ways:
- A large population with a mix of those with chronic healthcare conditions and those who are healthy
- Government subsidies that cover a portion of the cost of health care
The reason why health insurance through an employer is typically somewhat affordable is because the employer is paying a big portion of the costs. When you take the employer out of the equation, all the costs land on the individual. Combine that with the fact that Obamacare exchanges need time to stabilize from a cost perspective and it’s a recipe for what appears, on the surface, to be expensive health insurance. In reality a big contributing factor is the employer contribution not being present, which doesn’t show up in a paycheck.
In the same way the government could subsidize health insurance to make it affordable, and they do. ACA plans are subsidized based on income. Medicare and Medicaid are subsidized as well.
But what the individual exchanges need is more membership: healthy membership. The more members there are, the easier it is to manage the costs and contract for better pricing for the members. What health sharing ministries do, though, is draw membership away from the individual exchanges. But those who had cancer, or have asthma, or have any other number of pre-existing conditions simply can’t risk opting into a health sharing ministry because they risk financial ruin if a high cost episode occurs.
As a Christian I have a very difficult time viewing a health sharing ministry as virtuous. At the end of the day they operate very similar to health insurance, without having to abide by legal regulations that protect those who need health coverage the most. After all, for years people railed against health insurance companies (including many nonprofit health insurers) for denying claims based on pre-existing conditions. Yet health sharing “ministries” have essentially replicated the model of pre-ACA health insurers.
Any critique of health sharing ministries typically makes those who benefit from them defensive. They point out how unaffordable the Obamacare plans are, how much money they save through their health sharing ministry, and how they are healthy and don’t need that much coverage because they are healthy. It’s always interesting to hear these responses. My response is always the same: who are you trying to convince? When you look at the health insurance industry and health sharing ministries, no one (or almost no one) would argue with any of these points.
The issue is that many defenders of health sharing ministries will say that health sharing minstries are not insurance. But there is no denying they are using it as a low-cost health insurance plan. Legally it’s not health insurance, but for the individual participating in a health sharing ministry it looks and feels like health insurance.
T will close by saying there is no reason to take a critique of a health sharing ministry personally. Humans are going to act in their best interest, and for some health sharing ministries offer them affordable health “insurance” in case they face a high cost episode.
Similar to someone taking advantage of tax loopholes to save money, the critique of the tax loophole shouldn’t be on the individual but on the policy itself. Is it time for policy makers to take a second look at health sharing ministries?
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Agree with your assessment of the limitations of the health sharing ministries. The people I know who use them are optimizing for their own health care costs and circumstances and not looking at the broader implications. We have always opted for traditional insurance, but given how expensive and complex it is, we are also looking at medical tourism. We would always keep at least a bare minimum, catastrophic plan for the US, but if costs keep rising double-digits, only basic insurance will be affordable. Health insurance is already the single highest line item in our budget — more than our housing and car payments combined!
The other issue is that they could potentially object on moral grounds to certain procedures. But yeah my biggest one is that no service is guaranteed to be covered except maybe annual exams. It just seems like quite a gamble, even if you are healthy. Then again, I was completely healthy too… Right up until I was suddenly on life support for the better part of three months, racking up hundreds of thousands of dollars in medical bills. Health care ministries just couldn’t have covered that, even if they’d wanted to.