From the Desk of Bob McNett…..
Christian Health Care Cost-Sharing Cooperatives—–Are They Viable Alternatives to Health Insurance?
The religion section of last Saturday’s (January 9) Tulsa World featured a major article on Christian Health Care Cost-Sharing Cooperatives headlined “Christian health cost-sharing cooperatives surge.”
At The McNett Agency, we have seen a couple of our individual insurance clients opting for these kind of plans when their Blue Cross individual policies renewed this year.
Blue Cross of Oklahoma, because of big claims losses with their block of Exchange-based, Affordable Care Act (ACA) individual health insurance business, had major rate increases and changes to the PPO provider network associated with these policies. Health claims were higher than expected for most insurance carriers participating in these markets nationwide, and the reinsurance programs that are a part of the ACA law that were supposed to transfer money from insurance carriers that have healthier policyholders to those with less-healthy policyholders performed much worse than promised. Not enough funds were collected by these federally-sponsored programs, created as a part of the law to mitigate large premium increases in the first few years of the law, to reimburse insurers as planned. Thus, 2016 premium increases for individual policies were higher than the ACA law planned for.
Faith-based health-sharing programs have been around for a while now. One such program, Medi-Share, began offering their services in 1993. However, with the passage of the ACA in 2010 enrollment in these plans have been increasing.
These plans admit and clearly say that “this is not health insurance.” Unlike actual health insurance, there is no reserve, or pool of money, that is kept to pay claims. Most of these plans require a monthly payment that is much less than what a health insurance premium would be. Then, when a member of the cooperative needs health care, other members simply write a check to the cooperative, or, in some cases, write a check directly to the member who needs health care. These payments are often accompanied by personal prayer messages to the person receiving the funds.
According the the Tulsa World article, there are three major cooperatives available….Medi-Share, Samaritan Ministries and Christian Healthcare Ministries. Along with these major players, there are many smaller plans being marketed.
According to Tony Meggs, CEO of Medi-Share, quoted in the article, these cooperatives are considered to be “creditable coverage” by the ACA, and thus will avoid the tax penalty associated with not having health coverage. According to Meggs, “since 2013…we have experienced 60 percent growth.” And, according to Meggs, …”we have a stellar track record of paying claims.” A local Financial Planner is quoted in the article as saying he dropped his health insurance coverage three years ago, and enrolled in Medi-Share. He and his wife had fairly large health expenses while participating, and, according to him, are “….absolutely happy with it.”
When I went on Medi-Share’s website it gave no detailed information, other than a general guideline, about restrictions, how pre-existing conditions are treated, or several other important details. However, I did request that more information be sent to me. The website did ask me if I had been treated for several listed, major health conditions.
A couple of concerns that I would have if I were deciding whether to forgo health insurance and enroll in one of these cooperatives….
Since these plans are not governed by the same laws as actual health insurance plans are, can they be held legally responsible for any major claims I might have? According to article, quoting Mr. Meggs, the CEO of Medi-Share, they do not “guarantee payment.”
Plus, since these kind of plans are apparently experiencing big growth in enrollment, how will this additional membership, with, assumedly, bigger calls on these programs’ ability to pay out claims, affect their financial viability in the future? With no legal reserve requirements, if their cost-sharing requests elevate, will this cause a reduction in cost-sharing payments to members, or perhaps even a bankruptcy of the cooperative?
Higher premiums, bigger deductibles, narrower PPO provider networks are causing people who have to buy their own health insurance to look for other choices in the marketplace. These Christian health-care cooperatives are certainly one option that is being chosen by more people. However, they obviously offer much less long-term security than real health insurance, with it’s legal reserve requirements and guaranteed payment of claims. The McNett Agency will not be recommending these kind of plans, because of these limitations. But, is this better than going totally bare with no coverage at all? I can see this is a more attractive option than having no coverage at all. One must keep in mind, however, as Mr. Meggs admits….”this is not health insurance.”
Robert K. McNett, LUTCF
The McNett Agency
918 294 3712 Fax 918 494 6725
Toll Free 1 866 497 7119