How Do Health Care Sharing Programs Work?

What Is a Health Sharing Plan or Health Care Sharing Ministry?

A health sharing plan or HCSM is a nonprofit organization of members with similar religious beliefs. Members pay to join; the organization uses the collected fees to reimburse members for some health care costs. Some of the largest HCSMs include Samaritan Ministries, Medi-Share and Christian Healthcare Ministries.

Members of religious communities helping each other is nothing new. Health care sharing programs among Mennonites, for example, are common; even today, most HCSMs are small Mennonite organizations. However, wider interest in HCSMs grew after the Affordable Care Act (ACA) in 2010 mandated a penalty for individuals without at least a minimum amount of health insurance. (That federal mandate no longer exists, although some states have their own mandates.)

Because HCSM members were exempt from the individual mandate requirement, HCSMs became an option for people seeking to avoid penalties. In 2021, 108 HCSMs nationwide served over 865,000 Americans, reports the Alliance of Health Care Sharing Ministries (AHCSM).

How Does a Health Sharing Plan Work?

HCSMs typically charge a monthly membership fee, similar to insurance premiums. On the surface, there may be other similarities. For instance, some HCSMs have networks of approved providers or different coverage levels such as bronze, silver and gold. Some insurance agents even sell health care sharing plans. However, HCSM is not health insurance, and it's important to understand the difference.

How HCSMs pay

When you have health insurance, you usually visit a health care provider and submit a claim to the insurance company for the services you receive. You may have to pay a copay or co-insurance out of pocket at the time of service, but your insurance usually covers most of the cost. With a health care sharing plan, you pay the health care provider upfront for your medical care and request reimbursement from the plan.

Who Qualifies for an HCSM

ACA-compliant health care plans cannot discriminate due to health status, age or gender. Even if you're pregnant or have a pre-existing condition, you can't be denied coverage. Since health sharing plans aren't regulated, it's their decision whether to admit you. Many plans deny coverage if you have a pre-existing condition.

Health sharing plans are faith-based, usually Christian, and you must be a member of that faith to qualify. Most HCSMs also require following a prescribed code of behavior, such as abstaining from drinking, smoking or having sex outside of marriage.

Services HCSMs Offer

All ACA-compliant plans must cover 10 essential health benefits, including maternity and newborn care, mental health care and prescription drugs, as well as preventive care such as birth control and cancer screenings. Health sharing ministries don't have to meet these requirements and generally do not cover preventive care, pre-existing conditions, medication, dental care, vision care, birth control, abortion, substance-abuse treatment or mental health treatment. Maternity and newborn care may be limited to married couples who were joint members of the HCSM prior to conception.

Benefits of a Health Sharing Plan

Health sharing plans have a few benefits to consider.

• They may cost less than full-price health insurance premiums. Many Americans qualify for tax subsidies to purchase a state-based health care marketplace plan. If you don't, an HCSM could be cheaper.
• They can help you avoid penalties for being uninsured. In states with individual health insurance mandates, participating in an HCSM certified by the federal Department of Health and Human Services can exempt you.
• They may fit your religious beliefs. Health care sharing plans often offer spiritual support, such as members praying for each other. You may also prefer an HCSM if you don't want to be part of an insurance plan that covers contraception, abortion or treatment for drug or alcohol addiction.
• You can enroll year-round. In general, you can enroll in commercial health plans or marketplace plans only during open enrollment (typically in the fall) or if you have a covered event, such as changing jobs or having a baby. You can join a health sharing plan at any time of year.

Drawbacks of a Health Sharing Plan

Health care sharing plans also have some serious drawbacks.

1. No regulation: Insurance plans are regulated by state and federal laws; health care sharing ministries aren't. If your HCSM doesn't pay, you have nowhere to turn, unless your plan offers an internal appeals process.
2. No guarantee of payment: Reimbursement for health care expenses is at the discretion of the health sharing ministry. If the HCSM shuts down, you might lose any money you've contributed. One plan that recently declared bankruptcy left thousands of members with unpaid bills totaling over $50 million
3. Limited coverage: HCSMs typically don't cover the 10 essential health benefits ACA-compliant plans do. They generally do not cover maternity and newborn care, mental health care, prescription drugs or preventive care such as birth control and cancer screenings.
4. Coverage caps: ACA-compliant health plans cannot cap annual or lifetime benefits, but HCSMs can. Expensive treatment such as major surgery or chemotherapy may not be fully covered.
5. Upfront costs: Health sharing ministries require paying upfront for medical care and waiting to be reimbursed. You could have to pay thousands of dollars out of pocket with no guarantee of reimbursement.
6. Waiting periods: Health sharing plans don't always cover pre-existing conditions; those that do may impose lengthy waiting periods before they will pay for care.
7. Restricted membership: You'll need to find a health care sharing plan that aligns with your religious beliefs and agree to abide by its code of ethics.
8. No premium subsidies: HCSMs aren't eligible for the tax subsidies that reduce premiums for marketplace plans. In 2022, some 89% of marketplace enrollees got premium subsidies. The Inflation Reduction Act extended eligibility for subsidies through 2025. If you're eligible for subsidies, you may find insurance offering more coverage than an HCSM for less money.

After receiving complaints from health care sharing plan members, insurance departments in several states, including California, Maryland, Mississippi, Missouri and Texas, have cautioned consumers against the programs, and some states are even taking action to prevent their sale.

Is a Health Sharing Plan Right for You?

Health care sharing plans are generally risky investments, but may be an option if:

• You're in good health.
• You can't find affordable health insurance.
• Joining the plan will circumvent your state's insurance mandate.
• The plan supports your religious beliefs.

A health care sharing plan probably isn't for you if:

• You're over 50.
• You have a pre-existing health condition.
• You qualify for marketplace premium tax subsidies.
• You want a full range of medical and preventive care benefits.
• You want a guarantee that your plan will pay for your care.
• You aren't a Christian.

Make the Right Choice for You

Medical debt can negatively affect your credit score, but an HCSM isn't usually the best way to pay for medical care. Visit HealthCare.gov to see if you're eligible for tax subsidies to purchase an ACA-compliant marketplace health plan. If you still can't afford health insurance, investigate government assistance such as Medicaid or the Children's Health Insurance Program (CHIP). You may be able to get help with medical bills from local religious groups, from patient assistance organizations or by working out a payment plan. As you work to pay off a medical bill, free credit monitoring from Experian will help you keep an eye on how your efforts affect your credit score.