Many Americans purchase individual policies from health insurance carriers. Since the advent of the Affordable Care Act, the marketplace for such policies has changed. If you purchased an individual policy issued before 2010, and you maintained that policy in place, you are “grandfathered in.” You can continue to purchase that policy – provided the carrier still sells the plan. Whether or not the carrier still sells that flavor depends upon the policy’s profitability.
Each year, fewer and fewer people purchase such a plan. No new insureds can purchase grandfathered plans – and many existing customers are moving into new plans. So, the risk distribution in grandfathered plans is contracting – and will continue to contract – and prices will likely rise.
Of course, you can buy a new plan on state or federal health insurance exchanges. That’s one of the benefits of the Affordable Care Act. You will not be foreclosed from moving into a new policy even if you have pre-existing health conditions. But, many such migrants are experiencing sticker shock. Such plans (if not subsidized with tax credits) have “ginormous” deductibles. Monthly premiums are often higher.
Given that individuals are required by law to purchase an approved health insurance plan, are there alternatives to high-cost, bloated policies with stratospheric deductibles and cost-sharing?
A health sharing ministry is a voluntary, charitable membership organization that agrees to share medical bills among its membership. Three are open only to practicing Christians. Christian Care Ministry, which supports a typcial plan, Medi-Share, defines practicing Christian by asking for the following commitment – members sign an attestation of Christian faith and promise to abstain from tobacco, illegal drugs and sex outside of marriage; certain things, such as abortion and contraception, aren’t covered.
A 4th organization is more flexible in terms of its requirements– Liberty Healthshare. One need only formally attest to a personal commitment to religious liberty.
The Affordable Care Act treats these as bona-fide exemptions for the individual mandate. They are not insurance companies, per se. You are considered “self-pay”; but the organization agrees to step up to make payments to providers.
In practice, you would identify as self-pay. You then try to negotiate the best rate possible in advance of receiving care. The health ministry will then make the payment after the deductible (and cost-sharing, if applicable) is satisfied.
You can’t always plan your medical care. Sometimes needed care is urgent; sometimes emergent. In such circumstances, haggling over price might begin after care is rendered. In the self-pay world, one’s bargaining position weakens after services have been delivered. Still, most practitioners – and institutions – will negotiate to receive timely, reasonable payment that might be significantly higher than would have received from a traditional indemnity carriers. Further, health ministries have infrastructure in place to assist with post-treatment negotiation.
Cost for one plan is ~450/month; and purchase of such plans are probably not tax deductible.
What’s the downside?
Health sharing ministries have no contract. There’s no legally binding agreement that bills will even be paid. And, if bills are not paid, you are individually liable. Also, if the organization runs out of cash, there’s no state guaranty fund to back up the program – as there would be if a regulated carrier filed for bankruptcy. (Still, a state guaranty fund typically pays only pennies on the dollar anyway – with the policyholder still potentially on the hook for remainder of unpaid medical bills). Since the programs are not regulated by the Affordable Care Act, they may legally shun patients with pre-existing conditions. One program, Christian Care Ministry, will not pay for some pre-existing conditions, such as cancer, until an enrollee has been symptom-free (and off treatment and/or medication) for a number of years.
Still, Tony Meggs, chief executive of Christian Care Ministry, says the service routes payments between members and has never failed to pay a participant’s bills.
Many people are concluding the benefits of health sharing ministries outweigh the risks. Christian Care Ministry counted 64,000 members in September, 2013. Membership is now ~110,000.