The Trump administration is looking to expand association health plans and short-term catastrophic plans, but there is another low-cost, low-regulated health plan seeing increased membership sevenfold over the past four years — healthcare sharing ministries.
The ministries, which grew from about 140,000 members in 2014 to close to 1 million members today, group people with a common set of religious beliefs to help them pay for healthcare.
Similar sharing ministries have been around more than a century. A recent report that attorney Christina Lechner Goe prepared for the National Association of Insurance Commissioners said HCSMs gained momentum in the 1990s and skyrocketed this decade.
HCSMs cover nearly 1 million people across the country. HHS recognizes 104 HCSMs with 97 Mennonite/Old German Baptist churches/associations and seven with open or modified open membership, according to the Alliance of Health Care Sharing Ministries.
The low-cost option has its supporters within healthcare. The Association of American Physicians and Surgeons, which opposes the Affordable Care Act, pitched HCSMs in a proposal to repeal and replace the ACA last year.
Why have they become more popular, how do they affect providers and what’s their future? Here are five things to know about HCSMs:
Why are HCSMs more popular now?
David Weldon, president of the Alliance of Health Care Sharing Ministries, told Healthcare Dive the membership increase is related to rising health insurance costs, the individual mandate and religious opposition to parts of the ACA, including contraception coverage.
Weldon gave the example of a youth pastor who is not making much of salary. The pastor is living in a rural community with a wife and children. Before the individual mandate, the family might not have had health insurance.
The ACA and the individual mandate required most Americans to get health insurance. The law also, however, provided an exemption for people enrolled in HCSMs. So, Christians without insurance previously, those who couldn't afford health insurance premiums and people who opposed the ACA on religious grounds migrated to HCSMs.
HCSMs aren't health insurance plans
One common misconception is that HCSMs are comparable to health insurance. They’re not. They are self-pay plans that reimburse members after the fact.
Michael Gardner, senior director of marketing and communications with Christian Care Ministry in Melbourne, FL, which offers an HCSM called Medi-Share, said the ministries are “a peer-to-peer sharing community that connects people in need with others who can help them.”
JoAnn Volk, a senior research professor at the Center on Health Insurance Reforms, Health Policy Institute, McCourt School of Public Policy at Georgetown University, told Healthcare Dive that HCSMs don’t promise to pay claims. There are also limits on what’s covered, including pre-existing condition exclusions, she said.
HCSMs are exempt from the ACA and offer limited coverage. The plans don’t have the consumer protections found in the ACA, including out-of-pocket limits, pre-existing condition provisions and requiring coverage of the 10 essential health benefits. The plans also decline to pay for treatments that go against their faith, such as abortion, contraception and drug treatments.
In a way, the lack of regulations for HCSMs makes them similar to individual health plans before the ACA. Back then, payers had leeway about who they would cover and what they’d charge. The ACA ended those practices for the most part, but the added consumer protections also increased the cost of health insurance.
Without the ACA requirements, these plans can offer cheaper coverage. The downside is that they don’t provide an ACA-type safety net, according to The Commonwealth Fund’s recent report, State Regulation of Coverage Options Outside of the Affordable Care Act: Limiting the Risk to the Individual Market.
“HCSM coverage leaves members at risk of substantial out-of-pocket costs for conditions either not covered or covered only up to a cap. Moreover, because HCSMs do not promise that members’ care costs will be paid and are not subject to rules designed to ensure sufficient funds to cover claims, members face a greater risk that even eligible spending will not be reimbursed,” according to the report.
Medi-Share makes up more than one-third of HCSM membership
Christian Care Ministry offers Medi-Share, which has 398,382 members and started in 1993.
“The program allows members to live out the Biblical concept of coming together in community to share one another’s burdens and pray for one another, while providing the freedom to choose a healthcare solution that aligns with their faith,” Gardner told Healthcare Dive.
The monthly cost is based on the age of the oldest applicant and how many family members participate. Gardner said the average family’s monthly share is about $350.
Gardner said Medi-Share offers member-voted guidelines to explain which medical needs are eligible for sharing, ineligible for sharing or eligible for sharing with limitations.
Members can choose one of seven types of program options depending on the annual household portion, which is the amount of medical bills the member must pay before the other members share in their needs. So, it’s kind of like a deductible in a traditional health insurance plan. The annual household portion ranges between $500 and $10,000. To put that into perspective, a catastrophic plan’s annual deductible is $7,150.
HCSMs are self-pay plans
HCSMs are self-pay and often require members to negotiate rates with providers. The self-pay discount is often the same discount given to uninsured people, which can be as much as 50% off, Volk said.
One of the biggest differences between HCSMs and health insurance is that many HCSMs typically don’t work directly with providers. Not having payer-negotiated provider networks leaves the process of working on provider payments to patients.
“Some HCSM members report that the process of personally negotiating discounts, keeping track of payments from many different providers and managing payment from multiple sources is stressful and time-consuming,” Goe wrote.
This could create administrative headaches for both the individual and the provider that could result in strained patient relations, an increase in patient collections and issues with the revenue cycle. Payers are more reliable in paying claims than members, so self-pay plans may cause more uncompensated care.
“(Providers) are dependent on the patient being able to pay out of pocket,” Volk said.
HCSMs don’t guarantee a certain level of reimbursement. That could mean a patient receives care, gets a lower-than-expected reimbursement from the HCSM and can’t afford to pay the difference.
There’s another concern about not having negotiated arrangements with providers. Goe said the arrangements protect consumers and “strive to bend the healthcare cost curve.” For instance, Goe said the ACA covers services to prevent chronic disease. These payer programs can reduce more expensive healthcare costs later. Instead, HCSMs “do not usually engage in that activity and may actually add to the problem, instead of contributing to the solution,” Goe wrote.
When it comes to hospitalizations, Weldon said an HCSM may negotiate with hospitals. Weldon, a practicing physician who served 14 years in Congress, said the ministry will seek the Medicare rate.
Though many HCSMs don’t have provider networks, Medi-Share is one that offers a network of more than 700,000 providers, including hospitals, surgery centers, primary care providers, specialists and diagnostic labs.
Gardner said members don’t have to negotiate with in-network providers. Instead, they pay a provider fee ($35 for doctor visits and hospitalizations and $135 for emergency room visits). They would still file their claims to the HCSM for approval.
“Members can save on their medical expenses by choosing an in-network provider, but are able to choose any provider they would like, whether in- or out-of-network,” Gardener said.
The future of HCSMs
The Trump administration’s plan to expand short-term plans and AHPs may soon provide more competition for plans exempt from ACA regulations and further destabilize the individual market and ACA exchanges.
The administration is looking to allow greater leeway for AHPs. The administration also plans to expand short-term health plans from three months to a year.
AHP and short-term plan expansion could also cut into HCSM membership, which is much higher than the 68,000 people that the Kaiser Family Foundation said were covered by short-term plans in 2016.
Weldon said the expansion of other plans may reduce HCSM growth, but that’s not a bad thing.
“I think it may decrease the rate of growth, but I think it would probably be a good thing if it grew a little bit more slowly,” Weldon said, adding that the recent growth has been a challenge for HCSMs. “If association health plans take off, that could be something that could be more competitive. I think that’s a good thing. Competition is always a good thing in any market."