I learned recently about an alternative to purchasing a PPACA-compliant health insurance plan. There are three organizations whose members are exempted from PPACA penalties (see pages 107 and 128), Samaritan Ministries, Christian Health Care Ministries, and Medi-Share. As PPACA is currently written, no similar organizations can now be started, but these three are grandfathered in.
How They Work
These three organizations have some very specific requirements, including a declaration of faith, in order to be eligible. Medi-Share's declaration of faith requires that you and any adult children on your plan sign a statement indicating you believe that
- “the Bible is God's written revelation to man and that it is verbally inspired, authoritative, and without error” and
- “that man… because of sin was alienated from God [and can be saved from that alienation] by accepting God's gift of salvation by grace through faith”
Christian HealthCare Ministries requires you to attend church regularly. These organizations may require an endorsement from an ecclesiastical leader. None of them allow you to smoke or use drugs, nor abuse alcohol nor prescription drugs. They also do not pay for medical problems caused by not living by these “biblical principles.” This includes abortions or maternity (and presumably pediatric) care for children resulting from extramarital sex. There may be an additional charge if you are overweight or particularly unhealthy.
Every month you pay a “share” instead of a premium. These shares range from as little as $37 a month to as much as $7-800 a month, but are generally significantly cheaper than comparable health insurance. The more you elect to be responsible for each year, the lower your premium. Your share is either sent directly or indirectly, to someone who had a need the month before. It generally goes to someone who had a significant health expense the month before. If there is more money shared than needed, it is used to pay expenses for the current month, then if there is still money remaining, it is rebated to members. If there is less money shared than needed, it is pro-rated (i.e. you don't get all of your health care paid for). There are caps on how much you can get reimbursed, such as $250,000, without joining a special program with additional requirements and fees. There are severe limitations on pre-existing conditions that may never go away.
What I Like
There are a number of things I like about this model of paying for health care. I like the idea of eliminating the health insurance company, its expenses and its profits. I like the idea of getting the patient and the doctor closer together, without the middleman. I like the idea of feeling responsible for my own bills and those of others in my community. I like the idea of not having to pay for at least some of the poor health care related decisions made by other people in my “insurance pool.” I like the community pressure to not spend more than you need to on health care. It reminds me of a story about an Amish man who had to be cardioverted for an arrythmia. A dozen members of his village showed up in the ED to pay the bill before he left. He elected not to be sedated for the cardioversion due to the additional expense. “It only hurts for a minute, Doc,” he would say. However, the more I think about these organizations, the less I like them. I can come up with 8 reasons not to join one.
1) The Discrimination Factor
If you don't fit these organizations' rather narrow view of Christianity (Catholics, Mormons and others who consider themselves Bible-reading Christians don't qualify, nor do Jews, Muslims, Atheists etc), you're just out of luck. (although I've been told Catholics are okay and in fact the person who brought it to my attention is Catholic.) The fact that these organizations have been granted an exception to PPACA is ridiculous since there is no provision for a similar religious or non-religious organization to get the same exception. This is frankly unfair and ought to be illegal. Either everyone should be able to start an organization like this or members of this organization shouldn't be exempt from PPACA penalties.
2) Lack Of Preventive Care Coverage
One of the reason PPACA-compliant plans cost more than a similar health care insurance plan is that these insurance plans provide preventive care. You're on your own for this with these three organizations. Most don't allow you to “share” costs below a certain amount, such as $3-500. You can burn through a lot of money at less than $500 per need. Immunizations aren't covered. Frugal folks tend to skip a preventive visit when they actually have to pay for it, which may lead to more health problems and costs down the road.
3) You Become A Self-Pay Patient
I see self-pay (i.e. no-pay) patients every day, about 20% of my patients. Aside from the irritation of being required by law to take care of their emergencies while knowing only about 3% of them will actually pay me anything, the main difficulty I have with self-pay patients is getting them follow-up care, especially from specialists. I talk to the specialist on the phone, he agrees that the patient can easily be seen in clinic in a few days, so I discharge the patient from the ED with the number for the clinic. He calls the clinic the next morning and is asked “What is your insurance?” When he informs the clinic that he doesn't have any, he never sees the doctor (and the doctor usually never even hears about him.) He is left in the unenviable position, every time he needs any non-emergent health care at all, of trying to convince the front desk folks that he is really going to pay them. That usually means “cash on the barrelhead.” You show up with a credit card, a check, or a stack of Benjamins or you're not seen. To make matters worse, the highest bills my billing company sends out are sent to the self-pay patients. They might get a small discount for paying promptly, but that discount isn't nearly as large as that which insurance companies have negotiated for their members.
4) No Catastrophic Coverage
The point of health insurance is to keep you from having to declare bankruptcy in the event of unexpected health care costs. These plans limit you to just a few hundred thousand dollars for a health care problem. It doesn't take long for a chronic illness, or a particularly severe acute illness or injury, to surpass that sum. Imagine a 30 day trauma ICU stay or a preemie requiring months of NICU care. You're still going bankrupt because you don't have real health insurance. One of the best parts of Obamacare is that it eliminates idiotic insurance plans (like the one my Aunt had when she was diagnosed with pancreatic cancer. The maximum annual benefit was $2000. Yes, you read that right, just $2K.) Some of the features of these sharing plans aren't much different from many bad insurance plans in the past. There is no guarantee that your health care needs will actually be paid for. There is no contract.
5) Pre-existing Illness Limitations
Another great aspect of Obamacare is the elimination of pre-existing illness limitations. My wife was once turned down for health insurance because she had a single episode of cystitis. That needed to go. However, these plans don't cover pre-existing conditions, not even after a year. If you have rheumatoid arthritis when you join, none of your expenses related to that will ever be paid for. A significant societal issue with this philosophy is that the healthiest people aren't part of the insurance pool, so costs go up on those who are in it. Essentially, someone ends up having to pay more for health insurance because he doesn't believe Moses parted the Red Sea.
6) The Fine Print
Reading the fine print reveals all kinds of interesting issues with these sharing plans. For example, if you're hurt on someone else's property, they want you to sue the property owner to pay for your care instead of sharing it. They also only allow you to share the first 120 days of medications you may need for the rest of your life. There are serious limitations to psychiatric coverage. Gastric bypass isn't covered. If your child wasn't wearing a legally required helmet, you can't share the expense of a head injury. If he was injured in a water skiing accident where the driver of the boat was operating recklessly, you're out of luck. ADHD treatment? Not covered. Self-inflicted injuries or injuries resulting from a criminal act? Not covered. They also encourage home births and VBACs by allowing you to share the entire cost of care (instead of the amount above and beyond $300.) My point is there is an awful lot of subjective stuff in the fine print that you wouldn't necessarily see in a comparable insurance policy. Just like with disability insurance, the more exceptions there are, the more likely you are to disagree with the organization about whether any given expense should be covered.
7) Unfair to Physicians
Christian Health Ministries, rather than encouraging its members to pay their physician bills in a manner fair to the doctor, suggests the following:
“Tell your doctor you are self-pay but an organization may help with your bills later. Ask for a bill reduction. Please don't make full payment up front. Apply for any available financial assistance. Set up a payment plan with your providers.”
Basically, the modus operandi is to inappropriately acquire the assistance that hospitals, doctors, the government, and community organizations have set up to assist the poor. Now, I'll be the first to admit that our health care system is screwed up, but I'm confident that the solution isn't to have those who have the means to pay their bills avoid paying them by pretending they can't because they chose to pay shares instead of premiums. That doesn't seem like a very Christian way to run an organization to me. Frankly, if I were running a private clinic, and a patient told me they were a member of one of these organizations, I wouldn't be offering any discount at all, and certainly wouldn't feel a need to provide free care. I'd give them the full-rate bill and tell them to send it to their sharing organization and encourage their organization to contract with me to guarantee payment in a timely manner if they would like to pay the lower insurance company rates.
8) No Subsidies and No Tax Deduction
People who have sufficient money to pay insurance premiums without subsidies are going to prefer the guarantees that real insurance provides. Those who don't have sufficient income may be attracted to the lower price of one of these sharing organizations. However, those are exactly the same people who qualify for subsidies from the government to help pay for them. You don't get those to help you pay your shares. Nor can a business or the self-employed deduct the cost of his shares like he could with health insurance premiums.
Overall, I don't think I can recommend this approach to paying for health care to readers or to patients. I think that buying real health insurance is going to be a much better option, no matter what your income level or religious beliefs.
What do you think? Do you take this type of “insurance?” Do you use it? Comment below! (Keep comments civil or they will be edited/deleted.)