I am creating a “Do Not Buy” list as part of my estate planning to help my family avoid potentially dangerous financial products. These things are not illegal “scams”, but may have hidden risks where it is better to simply avoid them. In addition to equity-indexed universal life Insurance, I am also including health-care sharing ministries (HCSM). The bigger names in this group include Samaritan, Medi-Share, Christian Healthcare Ministries, Trinity/Aliera, and Liberty.
I’ve been reading about these off and on, and they are often mentioned as a cost-saving option for the self-employed and/or those in early retirement. Read this NY Times article It Looks Like Health Insurance, but It’s Not, this Seattle Times article Washington state orders ‘sham’ health-care sharing ministries to halt, and this Consumer Reports article to get some background.
I can definitely see the appeal of the lower monthly costs and the positive feelings from being part of a cooperative community. I can accept that many (but not all) require a strong religious affiliation. I might overlook the fact that they usually don’t cover and basic preventative care like screening exams (mammograms, colonoscopies), flu shots, and other vaccines. However, I cannot accept the following:
- HCSMs are not health insurance. This also means they are not overseen by state insurance agencies. There no government oversight, nobody to appeal to and have them say “hey that’s not right, you can’t do that”.
- HCSMs provide no guarantee of payment. Legally, they are just a charity. The ministry looks at each claim and has sole discretion as to whether they want to provide payment.
- HCSMs do not have to accept or cover pre-existing conditions.
- HCSMs do not have to cover prescriptions drugs. Read their rules very carefully.
- HCSMs can cap lifetime payments at relatively low amounts like $250,000. Read their rules very carefully. ACA-compliant health insurance plans have no lifetime limits.
The problem is that by design, yes, MOST people will be satisfied by these programs. MOST people get their bills paid. MOST people can thus leave a positive review. MOST people won’t have an extreme event that requires $500,000 of medical care over time. However, that is not the point of insurance! Insurance is there to protect you from bankruptcy due to a catastrophic event out of your control. Insurance is based on strict contracts, and you should notice that all forms of real insurance (life, health, auto, homeowners, etc) are tightly regulated. What happens if they run into some sort of financial difficulty, perhaps in a recession or from a rogue employee or executive?
Think of the importance of only putting your cash in an FDIC-insured bank or NCUA-insured credit union. The vast, vast majority of the time, banks don’t fail. I’ve never had a bank fail on me. I don’t know anyone who has had money in a truly failed bank where the FDIC had to step in. But I still know that having the proper checks and backstops is important. Sometimes things are great for long time… until they aren’t.
Also, don’t forget that if a healthcare sharing ministry rejects a child’s claims and the family is bankrupt and desperate, they’ll likely end up falling back on taxpayer-funded Medicaid to cover their healthcare needs. Is this how we want the system to work?
My recommendation is to steer clear of all healthcare sharing ministries. I do not doubt that most have good intentions and happy customers, but things can happen that may even be out of their control. HCSMs are charities, not insurance. They can fail as much as any business. Yes, real insurance costs more, but at least you have a clear contract with defined rules and legal options as a backup. If you are my loved one and are reading this, please protect yourself fully and make sure you are buying true health insurance.
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No problems with your argument.
If neither spouse has insurance thru work, what is your alternative?
I would say to make sure you have fully explored the tax credits which cover households up to 400% of the Federal Poverty Line. For a family of four, this means your household income could be up or slightly over $100,000 per year. I don’t know that everyone realizes how much these tax credits can reduce the out-of-pocket premium that you pay.
It’s true some of these programs have their problems. I’m a member of LHS and dealing with an issue right now. Unfortunately, with regular insurance, Christians end up paying for things which are not biblical, which is a non-starter. Plus, being a member of a sharing ministry is cheaper than regular insurance.
Isn’t Christianity about forgiveness and acceptance as well? If you are Christian and make a mistake or commit a sin, are you no longer a Christian?
Dear Jonathan,
Thanks for the question. Christianity is about forgiveness and acceptance, e. g., faithsaves.net/salvation.
That does not mean that Christians want to pay for little babies to have their limbs ripped apart in the womb with their money, or that they want to pay for people that need to have love showed to them but who instead want their perfectly healthy male or female members removed from their bodies when they can be part of a health sharing plan that does not require that they pay for such harmful things.
Thanks.
One big appeal of these ministries is they satisfied the health insurance mandate of the Affordable Care Act. But the penalty for no insurance is gone. Also, as mentioned, amounts paid into a healthcare sharing ministry are not insurance, and are not tax deductible (important for businesses and self-employed individuals).
To get Premium Tax Credit, insurance must be obtained thru the Exchange: https://www.healthcare.gov/
Not true Jonathan…..and not everyone is a family of four. We were part of the 10 million self insured that were gouged and ripped off by having a choice between buying UN-affordable Care Act Insurance or being harassed by the IRS for the rest of our lives. When Trump finally did away with this extortion we thought we were good….only to find out that really sensible, credible and affordable plans offered by United Healthcare’s Golden Rule Division were blocked in almost every Democratically controlled State and that only Florida and Texas among a few others were allowed to offer these plans in spite of the change at the Federal level.
If you are self insured, the useless ACA robs you of $600-$700 a month for a minuscule discount at the doctor’s office and a $10K-12K maximum out of pocket. The Golden Rule Plans, backed by one of the largest Health Insurance companies in the country cost $177/month and provide reasonable and affordable coverage.
The only reason they are not available everywhere is political. And the reason I use the word “were” is because we actually changed our residence so as not to have to be victims of the US Medical Industry or President Nancy Pelosi.
Hey Jonathan – I’ve been reading your blog for many years and really do love it! In fact, it’s the primary personal money blog that I follow. You’ve been a huge inspiration to me. I would encourage you to read Samaritan Ministries response to the article which severely misrepresented Samaritan. https://samaritanministries.org/blog/the-new-york-times-misrepresents-samaritan-ministries-and-members?utm_source=%22This+Month+at+Samaritan%22+newsletter+emails&utm_campaign=8381982624-TMAS+202002g&utm_medium=email&utm_term=0_79b7ae7374-8381982624-67598585
There are “sham” medical sharing groups out there. Samaritan isn’t one of them. I currently use Samaritan, because I no longer have a job that helps cover insurance for a reasonable cost. My siblings have used Samaritan for 20+ years and have all had great experiences. A close personal friend’s daughter had osteogenic sarcoma (bone cancer) in her leg, and with the many surgeries and treatments she had (including rotation plasty, and ultimately amputation, and of course chemo), which cost millions of dollars – it was all covered by Samaritan.
I’ll continue reading and supporting your blog even though I disagree with your assessment 🙂
I used to use Samaritan, but moved to LHS when they consistently “lost” paperwork I had sent them and were rude to me on the phone.
Yeah, my family of 7 has been on Samaritans for 6 years. And only have speaking extensively with people who had been with it at least that long and undergone serious medical treatment (eg surgery, cancer, etc.). It’s been smooth sailing for us and our claims have been handled in a timely manner with no issues. These organizations are definitely not for everyone and some are not as good as others, but I’ve got nothing but positive to say about my experience with Samaritans.
The problem with the ACA is it is good only for in-state coverage. Once you cross state lines the only coverage you get is Emergency Medical care.
That is nothing to do with ACA.
Thats a specific insurance plan offering coverage with limits to specific providers. Insurance has always been regulated at the state level and doesn’t operate across state lines in that sense and this is nothing to do with ACA.
My employer based health insurance plan works nationwide. A similarly spec’d and priced ACA plan only works in the state it was purchased. For practical purposes every ACA plan currently available doesnt cross state lines however insurance plans exist that do.
We have local ACA plans that have in-network coverage that does cross the state line. So no this isn’t an ACA thing. I happen to live in a major city that is on the state border and theres a suburb in the other state and our plans cover both cities. I checked the in network doctors and they are in both states. This is probably more common with big networks like BCBS and large HMOs like Kaiser.
I don’t doubt that is what you might see offered in your state/city. Its probably common for individual plans to not have networks that cross state lines.
Individual insurance is regulated and sold at the state level so its often/typically limited within state lines. But its certainly not a requirement and there are plans that cover providers across state lines. This isn’t a requirement, limitation or mandate of the ACA and thats how it all worked before ACA.
Thanks for your article on health sharing accounts. I appreciate many of the articles on your blog.
My wife and I have been members of Samaritan Ministries, a health sharing ministry, for years. We have had expensive things like surgeries paid for 100%. I could get insurance from my work, but we stick with Samaritan both because they reflect our Christian values and because:
1.) We can go to any doctor and any hospital we want, both in the USA and internationally, and our medical needs would be met. We have no “network” where if we are traveling internationally we are out of luck if we get sick.
2.) You are correct that technically they are not insurance, but there have been a astronomical number of needs that have been shared that have been met. Furthermore, please keep in mind that insurance companies often find ways to get out of paying people for things.
3.) Your article is not accurate that needs are necessarily capped at $250,000. We can pay a little extra each month and join the program for needs that go into the multi-millions of dollars. If one is part of that program, needs are not capped at $250,000. We are covered if we get some horrible disease and have to pay millions of dollars.
4.) You are correct that people with pre-existing conditions are not able to get those covered, just like was true for practically all insurers before the Affordable Care Act passed. Also, certain things are not covered that I am not going to do; for instance, if someone gets an STD from being with a prostitute he will not get coverage. If someone is a drug abuser he won’t get refunded for his overdose on heroin. Since I am faithful to my wife and don’t do drugs, I am glad to pay less each month to not subsidize people who do, and am also glad that I don’t have to pay for people who are irresponsible and did not get insurance or join a health sharing ministry until after they were already sick.
5.) Health sharing is portable; if I lose my job I don’t lose my coverage.
If you don’t want to be part of a health sharing ministry that is fine; it isn’t for everyone. In my opinion, though, it is better than the vast majority of traditional medical insurance plans for a fraction of the cost. Please keep in mind that the New York Times may dislike health sharing because of the political slant of the paper as well as because of problems that they allege. Furthermore, I am not asserting that every health sharing ministry is fantastic; I can only speak to the one that we have researched and been part of for many years, as have many other people that we know, all of whom have had 100% of their needs taken care of, to my knowledge.
If you did not speak to a representative of Samaritan Ministries and/or several other health sharing ministries before writing your article, but only looked at critical sources such as the New York Times, I would like to suggest that you give both sides of the story a look. Since your article has clearly inaccurate information (needs are capped at $250,000) I suspect that this did not take place, but I don’t want to make assumptions.
Thank you for wanting people to have accurate information about their health choices.
Thomas,
Glad to hear your plan is working well for you. I’m sure Samaritan is one of the good ones.
The article here says that plans “can” in general cap the payment at $250,000. That is clearly true. Samaritan even default plans have a $250k cap. Yes you can pay extra to avoid it but the default has a cap. The other plans may/may not have various caps.
What he said is NOT “inaccurate” nor specific to Samaritan entirely.
Dear Jim,
Thanks for pointing that out. The original version of this post (which I get by email) said:
“HCSMs cap lifetime payments at relatively low amounts like $250,000.”
There was no “can.”
I am glad that the author of the post was honest enough to add in the word “can” instead of trying to defend the inaccurate statement that “HCSMs cap lifetime payments…”
when it was pointed out that this was inaccurate.
Of course, with the “can” the objection is much weaker; someone I worked with had work provided insurance some years ago, and when he got cancer, he was surprised to find out that he was responsible for 100% of all expenses over a very low minimum. He is essentially in debt the rest of his life.
Thomas,
Oh, OK I see, I didn’t know there was a change in the language, gotcha.
If your friend got cancer and it wasn’t covered above a “very low minimum” then that was not legal health insurance as defined by ACA offered in the past 7 years. Did that happen before 2013 ? That is one of the things ACA fixed. Insurance can not have caps on coverage or lifetime maximums.
I don’t remember how long ago it was.
Thanks.
The healthcare industry is broken in many ways and I am not a fan of the current system and the direction it is going. However, it remains my opinion that I will tell my family to avoid HCSMs as a whole.
Bottom line – They are run as a charity, while I want a contractual, legally-enforceable guarantee.
(I still don’t really understand why Samaritan asks you pay extra on top the standard premium to remove the $250k cap per need. Why is the default option to save a few bucks now, with the small chance that you’ll have to deny them a future claim when they obviously have a serious health problem (as it must to cost over $250k)? Wouldn’t that be a horrible feeling to deny that claim because you just didn’t ask for another $20 a month?)
Dear Jonathan,
That’s fine, feel free to avoid Health Sharing Ministries if you want to; you also have a lot more assets than many of the people in my church do, for example, who can’t afford ObamaCare premiums and are thankful that they can save a lot because they don’t have to pay for things they don’t need.
I can’t speak to why a box is “default” or “not default,” but I believe all the Christian school teachers in our school, for example, all of whom are on Samaritan except one (they can choose whether they want to or not), have the over $250,000 part which doesn’t cost much more. It is certainly not Samaritan trying to scam people into not having coverage over $250,000.
Please see the response written by Samaritan Ministries’ President, Ted Pittenger: https://samaritanministries.org/blog/the-new-york-times-misrepresents-samaritan-ministries-and-members
I’m glad you wrote the post, Jonathon, so thanks for doing so. I think the biggest concern is exactly what you point out: people might purchase this “plan” and expect it to act like other, more familiar insurance, and conflate the two with each other when they most definitely are not the same thing.
Samaritan’s response doesn’t refute any of the key issues you brought up, and while one of the people in the featured stories may still have a positive view of Samaritan as per the email they published, it’s noted in the article that he established a GoFundMe page and then afterwards, his son still ended up getting coverage through Medicaid. I’m glad that my taxes have gone to support them; to me, that’s being a good member of society which hopefully is striving to take care of all us. In other words, I’m glad to be able to pay for things that others need even if I don’t need them, and I’ll gladly hope that over my lifetime, I’ll have paid way more than I ever get back. Some of the comments here suggest that not everyone feels this way.
Dear Michael,
I am glad to hear that you are glad to be generous with your own money. Some of us think that we should be very generous with our own money, but should not have the government use force and the threat of imprisonment if people don’t pay taxes to take from some and give to others except for very limited things that the government needs to be doing. We would not view governmental forced “redistribution” as charity, so we don’t view taxation as a form of charity. People who think like us also, statistically, tend to be much more generous with our own money than people who prefer to vote for others to be forced to be “charitable” through taxation.
Unsurprisingly, this post has engendered a lot of emotional/political-type responses. I do appreciate there being different options for different people’s priorities — while I also understand the argument that many people are perhaps not well-equipped to make a good choice for themselves, and thus defaults (and perception) matter.
I’m grateful for the analysis and discussion, since I’ve been casually eyeing such insurance alternatives, myself. The main thing I’m left wondering is what the actual difference in catastrophic claims being denied is, between the (perhaps?) more reputable alternatives like Samaritan, and typical mainstream government-regulated insurance.
I ask this because inevitably when US Health Insurance is discussed, there are anecdotes that get whipped out, of people having substantial claims denied, perhaps because some hospital they were ambulanced to in an emergency was out-of-network, or for other reasons. This leaves me wondering how much protection you actually get from all the government regulation.
If the odds are similar of a massive claim being denied in a catastrophic scenario, then the difference in cost might mostly be due to the alternative insurance variants not covering pre-existing conditions, preventative care, or various other procedures that some might consider more bonus-than-core (perhaps even extreme end-of-life scenarios? A man can dream…). In which case, it would become more of a decision based on whether one feels it is a moral imperative to be part of the system that helps cover these (which is a totally reasonable motive for going with traditional coverage).
James, keep in mind that if your insurance company denies a large claim, there is an appeal process and you can also get help from your state insurance commissioner. Worst case: litigation. Additionally, some states are already implementing laws to manage so-called “surprise medical bills”. My understanding is that these non-insurance options have none of these protections.
I figured there were differences, but I wasn’t sure about the details. Thanks for filling some of that in. Like I said, horror stories of huge claims being denied get tossed around, as though there’s effectively no recourse. I’ve never personally had to deal with that scenario, so it’s all anecdotal for me. I’m glad to hear there are often measures that can be taken (even if effective litigation might be beyond the resources of some folks). Protections against “surprise medical bills” could be a fine development, if implemented sensibly — of course, that currently falls under the category of things that might happen in the future, rather than a concrete benefit. But it’s fair to note that this sort of feature will likely not apply to the non-traditional health insurance alternatives.
One additional con against Health Sharing Ministries in my view is their narrow interpretation of their own statement of faith. Many good God-fearing Christians agree with it but don’t belong to traditional Christian churches. One fairly recent example was the purging of Latter-day Saints from the rolls of the Health Sharing Ministries: https://www.ksl.com/article/46640296/christian-health-care-organization-asks-latter-day-saints-to-reconcile-their-beliefs-with-historic-christianity
It’s unfortunate that questions of caring for your brothers and sisters in the Lord get debased into a “you aren’t Christian enough for me” attitudes.
Yeah, that’s pretty weak.
I wonder why there don’t appear to be any similar organizations without the tightly-coupled religious aspect? It is because operating under the umbrella of religion is the only thing preventing government insurance regulation from applying to them? Seems like it wouldn’t be that hard to fake well enough (other groups have accomplished as much, in other contexts)…
James, These organizations are only allowed as exceptions to normal health insurance rules because they are religious groups. So yes thats the reason only religious groups have such healthcare sharing ministries. However there is nothing stopping a more progressive or open religious group starting a healthcare sharing ministry that has more lenient and broader religious requirements (i.e. one that doesn’t exclude specific denominations or have specific religious based moral clause).
Jonathan,
Samaritan member here. I thought I’d offer some counter-points for you to consider.
You are entirely correct that these are not insurance. They don’t purport to be. Many people consider our current health system to be broken, and a big part of that is the unholy relationships between government, insurance companies, pharmaceuticals, etc. In recent years, that has only intensified and the result has been skyrocketing costs and reduced benefits. The health plans I had at the start of my career (low deductibles, premiums 100% covered by my employer) are a thing of the past. I think I’d rather see a single payer system than the one we have now.
Thanks Jonathan for taking a stand wrt these policies and I totally agree. With ACA subsidies there is no reason to run the risk of not having good insurance.
I am often surprised by people in the PF community who advocate for it. Bad risk management.
” With ACA subsidies”
Not everyone is in a situation to get the subsidy and insurance can be extremely expensive if paid 100% out of pocket.
A small % of people are in corner cases where the local insurance options are very expensive and yet they make just enough to not get much of any ACA subisdy.
The system is broken, and I’ll offer an example of why I feel this way.
We are retired, and on the employer’s retiree insurance plan. For me, my wife, one college age child, we spend $20,000/yr for insurance.
Wife had her appendix out. The bill was just over $20K. Insurance negotiated to $4000, and we got a bill for a $400 copay. In this case, the ‘value’ of the insurance was mainly in that $16K negotiated savings. A non-broken system would have the bill come in at $4-5,000 which I’d pay out of the $20K/yr we’d be setting aside.
It’s a broken system for the fact that the non-insured see that $20K bill, and may not bargain it down. It’s broken for the conflation of insuring against catastrophe vs thinking insurance should be part of every routine doctor interaction.
What’s missing from the system is an easy way to buy that catastrophe insurance for the $100K+ medical events along with the reasonable, negotiated, costs for anything less.
No, the bigger value of your insurance is that if your bill was actually $100k or $200k or $1.5 M then the insurance would pay just about all of it.
If those $100k+ bills weren’t a reality then we wouldn’t even be having a discussion because insurance wouldn’t really be a problem.
It’s kinda both. I mean, obviously the thing that could ruin you in one fell swoop is a single enormous bill you couldn’t conceivably pay — and that’s traditionally exactly what insurance is for (rare but catastrophic occurrences).
However it’s also true, under the weird system that’s emerged in the US over the past few decades, that you generally CAN’T pay the “actual/true market” price for health services, unless you have insurance. This is extremely meaningful for the vast majority of health services people consume.
The high cost of insurance is almost certainly more driven by the former than the latter, though, I readily agree.
Healthcare in the US is very expensive. There are multiple reasons for it.
Part of that is because the insurance companies themselves cost us about 20¢ of every $1 we spend with their bureaucracy and administrative bloat and profits.
Part of the high cost is the high quality of care we have.
This can all add up to make routine healthcare affordable for most. Yes.
Also, seperately, why pay $20k a year if you’re retirement age? Too young for Medicare?
Your college age kid is not expensive to insure alone under a ACA plan.
“Negotiations” are a legitimate scam. Can you imagine the administrative burden that wasted since every insurance company, procedure, doctor and facility that has be negotiated and reduced to contract, every year? The shear number of permutations? The Hospital did the job for $4,000 instead of $20,000 not out of the goodness of their heart, but because that is what they can accept, pay everyone and still profit. They are forced to create a phony & inflated “usual & customary” fee schedule that no one will every pay with insurance as a “most favored nation” clause in insurance negotiations. This scares people and forces them to buy insurance even when its not required anymore. This is the #1 reason why our system is broken today.
Just want to speak out on behave of HCSMs. We have been with 2 of them, and are currently members of Samaritan Ministries. We have been with them for 8 yrs know and they have been wonderful to partner with in every way! In fact my husband, sadly had to leave Samaritan to go on Medicare when he turned 65 yrs of age last yr and it was a hard decision for us. We sort of had too more than we wanted to because of the way Medicare is set up. Our son is on it as well, and it is much better money wise and care wise than the traditional health insurance that was offered from the company he works for. Having said that, I don’t think that this is for anyone…Samaritan is a faith based ministry, and it is not insurance. If you want insurance this is not for you. If your not a Christian as defined by Samaritan Ministries then this isn’t an opportunity that you would want to take anyway. I would highly recommend Samaritan to others of Christian faith, and I am grateful to be a member. We could get health insurance and be involved in traditional health care, but I would choose Samaritan beyond the cost factor. It has been wonderful to help others with their medical bills and for others to help us. In conclusion, this is not health insurance, so to compare it to that is not the correct way to look at it. Thanks for the opportunity to share and I appreciate the many money pointers I have learned form you!
By the way, people who have traditional insurance should be happy about Healthcare Sharing Ministries because we result in more competition and lower prices. Since as a Samaritan member I can go to any hospital I want, I have an incentive to seek out the best quality care, not being limited by a network. Since I care about costs being low because I care about the other Christians I am ministering to and sharing with in Samaritan, I have an incentive to seek for lower prices, also recognizing that as we seek for low prices overall it will result in my monthly share being lower. Thus, I negotiate for lower prices, usually getting 40% or so discounts off the fake, inflated retail prices, and sometimes even more (and sometimes less but almost never the list price.) In other words, Healthcare Sharing results in exactly what is absent in our current medical system–actual competition. The reason prices for most things are driven down and quality goes up over time in a genuine free market is because of competition. The traditional insurance model stops competition, and government healthcare would totally destroy it, resulting in lower quality and higher prices. If enough people went to health sharing, real markets could flourish in health care, resulting in better care at lower prices. Thus, people who don’t believe health sharing is for them should be happy that we are here negotiating for lower prices and for higher quality, instead of trying to use the force of government to drive us from making our free and uncompelled choices and forcing us into higher priced and lower quality care on the assumption that we don’t know how to care for ourselves.
You do realize that insurance companies negotiate lower prices too right? You also understand that everyone with high deductible plans (now most of us) also seek out lower prices just to save ourselves money right?
Hi Jim, I never said that ONLY people in Healthcare Sharing Ministries try to negotiate for lower prices.
By the way, I don’t have a high deductible. If I negotiate a cut in price more than $300, I have NO deductible. I have 100% of my healthcare need met, at any hospital I want to go to, so I can go to the one with the best care, and not only in the USA, but around the world.
I wasn’t even sure what ‘Health care sharing ministry’ was. Maybe good to include a short snippet or link to read up on. Wikipedia helped me.
For my last leg of insurance before medicare (6 months) I got a high deductible Health sharing ministry policy. The price was very reasonable and fortunately I never had to use it. I had to sign for the question, “do you believe in God?”. I asked the insurance agent, how does ministry enforce this question? Of course he had no answer. All I said, was “If I say yes, do I get the insurance?” He looked agitated but said yes.
We moved to Samaritan Ministries five years ago, we were hesitant as they were “not real insurance”. Our insurance at the time told us they would cover costs of birth, and when we submitted the bill they rejected it. When we appealed they said “We reviewed your initial call with our representative. We agree he did tell you this would be covered, but he was wrong, and we won’t cover it.”
At that point, we switched to Samaritan’s, have been happy since. Two births covered 100% with no issues.