Not Insurance: Health Share Plans Could Leave You Unprotected

Not Insurance: Health Share Plans Could Leave You Unprotected

Not Insurance: Health Share Plans Could Leave You Unprotected

Health share plans and healthcare sharing ministries (HCSMs) are often marketed as “cost-effective alternatives to traditional health insurance.” However, as some Utahns are finding out, these plans have substantial limitations on coverage and lack the protections that ACA-approved health insurance plans provide.

If you’ve ever researched healthcare plans for yourself or your family, you know firsthand that searching for and comparing plans can be confusing—really confusing. There are so many different plans, pricing tiers, subsidies, and sign-up windows—the whole experience can be overwhelming. If you don’t know how to apply for subsidies made available through the Affordable Care Act (ACA), the cost of coverage can also seem impossible.

During your search for coverage, you may have encountered programs called health share plans or healthcare sharing ministries (HCSMs). These plans appeal to the human desire to be part of a community of people with similar beliefs and values. Members of HCSMs “share a common set of ethical or religious beliefs and share medical expenses among members in accordance with those beliefs.”

A report from the Colorado Division of Insurance found that more than 1.7 million Americans rely on sharing plans and that many of the plans require members to ask for charity care before submitting their bills.

-First Annual Report on Health Care Sharing Plans and Arrangements from Colorado Division of Insurance, May, 12, 2023

Both health share plans and healthcare sharing ministries plans are touted as affordable alternatives to traditional health insurance—and it’s true that monthly premiums are sometimes lower than health insurance plans. However, the reason the premiums are lower is alarming: Health share plans and healthcare sharing ministries plans are not insurance plans. They don’t provide essential coverage and benefits and don’t have to meet the minimum health benefits mandated by the Affordable Care Act.

Unlike regulated insurance companies, health share plans and healthcare sharing ministries are not required by law to pay their members’ claims for medical expenses.

Choosing a health share plan over an ACA-compliant health insurance plan can have profound, negative implications on your access to healthcare. No one plans for a severe illness, injury, or medical emergency, but if you choose a health share plan instead of insurance, there’s a good chance it won’t be covered. If you have a serious illness, it’s also very possible that the cost of your care exceeds the annual limit (the cap on the amount the health share will pay in a single year). There are thousands of documented cases of Americans with health share plans who ended up with a severe illness or injury, only to find themselves up a creek without a paddle.

Let’s dive in and cover a bit more about why you should avoid these plans, and how a health insurance plan through the Health Insurance Marketplace is the better alternative.

How Do Health Share Plans Work?

Health share plans and healthcare sharing ministries operate on the premise that members of the plan pool their money to cover each other’s medical expenses. Members typically pay a monthly “share” or contribution, and those contributions are used to pay the medical costs of other members who file claims.

Don’t Be Fooled. Health Share Plans Are Not Health Insurance

Some health share options offer free co-pays or coverage for specialty appointments, but when it comes to your health (which is affected by your insurance coverage) it’s important to look farther down the pipeline. Here are some crucial differences between health share plans and health insurance.

  1. Health share plans aren’t regulated: Traditional health insurance plans are regulated by state insurance departments, while health share plans aren’t. Health share plan providers aren’t subject to the same oversight, consumer protections, or legal requirements as health insurance companies. As a result, health shares have fewer guarantees regarding coverage, claims processing, and dispute resolution. Often, these limitations are buried in the fine print. According to the Utah Insurance Department’s own website, when it comes to these plans “Don’t expect coverage for pre-existing conditions, mental health, or other needs.”
  2. Limited coverage: Health share plans impose restrictions on coverage. Pre-existing conditions, preventative care, and medical treatments (like cancer treatment) aren’t fully covered. Coverage varies based on the plan you’re on, and the preferences of the health share’s members.
  3. “Morality” as a litmus test for coverage: Many healthcare sharing ministries have a morality clause that requires members to adhere to specific religious or lifestyle guidelines to qualify for a plan. This often leads to a denial of coverage for conditions that are connected to activity or behaviors the administrators of the plan deem as “immoral.” This often includes treatment of STDs, treatment of alcohol or drug abuse, cirrhosis of the liver, or maternity benefits for anyone who is unmarried and pregnant.
  4. No guarantees: Health share plans operate voluntarily and rely on the willingness of members to contribute to the shared pool of money. There are no guarantees there will be funds to cover all the members’ medical expenses, especially when there is a large-scale healthcare crisis (like COVID-19) or an unexpected financial hardship among members (such as a recession).
  5. No provider network and lack of negotiated pricing: If you do find yourself paying out of pocket for your medical expenses that weren’t covered by a health share plan, there’s another unwelcome surprise waiting for you. Since health share plans don’t have provider networks, you’ll likely be charged full price by the doctors and hospitals, instead of the lower, negotiated rates available to people covered by health insurance. To add insult to injury, some plans require the patient to try to negotiate a lower price for services directly with the doctor or hospital before submitting a claim. Some even have you pay the bill and then request reimbursement.

Real-Life Consequences: A Short Case Study

In 2019, Salt Lake City’s Jennifer Wunderlich received some terrible news. Her daughter was diagnosed with a rare form of cancer and needed to start life-saving treatment immediately. Unfortunately, Jennifer’s family was enrolled in a health share plan, which she believed was the only option her family could afford, based on the perceived cost of health insurance. Jennifer contacted her health share plan, and they informed her they would only cover up to $100,000 of her daughter’s cancer treatment. Since her daughter was going to need almost 18 months of care and Jennifer would not be able to work during that time, it was looking like the Wunderlich family was also headed for financial ruin. Even worse, the health share plan would likely only cover the first few weeks of her daughter’s cancer treatment. The doctors recommended that Jennifer transfer ownership of their family’s home to one of her younger children through a trust. While it’s devastating to hear your child has cancer, learning that your “insurance” won’t cover the cost of treatment is an additional, unfathomable blow to anyone.

Luckily, Jennifer was friends with Rebecca Yates, CEO and Founder of Ark Insurance Solutions, a Salt Lake City-based health insurance brokerage. Based on Jennifer’s family income, Yates was able to sign her up for an affordable health insurance plan through the Health Insurance Marketplace. With subsidies, the health insurance plan was only $16 a month, substantially more affordable than the $450 per month Wunderlich was paying on her health share plan. The new coverage (which was actual health insurance) covered the cancer treatment, and her daughter received the life-saving healthcare she needed. Here’s what Jennifer had to say about the experience:

“Rebecca was able to find a plan that gave us the coverage we needed because we knew this would cost upwards of one million dollars. She was able to lay it out for us, and let us know what would be the best option. It changed everything. We had to go to have proton beam radiation done, which isn’t offered in Utah. So we were able to go to MD Anderson Cancer Center in Houston, and we spent the summer there while [my daughter] had her treatments and underwent other surgeries. We wouldn’t have been able to afford that had we not had insurance coverage. So it literally saved her life.”

Prioritize Your Health With Real Insurance

The significant risks and limitations of health share plans can negatively impact your access to health care. Having good health insurance coverage is critical to getting the best care. The good news is that quality health insurance can actually be affordable when sourced through the Health Insurance Marketplace, which offers subsidies and pricing tiers based on your income.

Since health insurance brokers’ fees are paid by the insurance carriers, you can get the help of a health insurance broker or agent at no additional cost. This empowers you with a professional who can advocate for you, evaluate your coverage needs, and help you find the plan that best suits your family’s budget.

Want to learn more about what type of quality health insurance coverage you can qualify for? Ark Insurance Solutions can help. Let’s talk!
Navigating the complex world of health insurance can be daunting. The Ark Insurance Solutions team has the skill and experience to guide you. We’ll help you compare health plans to make the best decision based on your unique circumstances and budget. Give us a call at 801-901-7800 or click here to schedule an appointment with us.