Why Desperate Families Are Getting Religion on Health Coverage
When Erica Jackson and her husband decided she would quit her job as a nurse and stay at home with their three kids, they knew they couldn’t afford insurance on the individual market. The family of five, who live in Wichita Falls, Texas, near the Oklahoma border, could already barely afford Jackson’s employer coverage, which cost $900 per month for a plan with a $12,000 deductible.
So Jackson reached out to her insurance broker for alternatives to exchange plans, and he suggested that she and her family would be a good fit for Medi-Share, a nonprofit insurance alternative based in Florida in which members share each other’s health care costs. There was a catch, though. The plan was run by a nonprofit religious ministry.
Because of her experience working in a doctor’s office, Jackson was initially skeptical of the faith-based plans—they aren’t really insurance, and there’s no guarantee they’ll cover medical bills. But as she learned more about the plan, which requires that members don’t smoke or use drugs and doesn’t cover injuries that result from behaviors considered immoral, such as drunk driving, the more she felt convinced that the plan was right for her family.
"The information that they make you go through, such as the beliefs, it was very reassuring,” said the 27-year-old.
Ultimately, Jackson and her husband, an insurance adjuster who works on contract, decided to take a chance on Medi-Share, paying $445 per month. They are also responsible for an additional $3,750 in annual out-of-pocket costs.
Health care sharing ministries have become a more entrenched part of the health care system than anyone could have possibly imagined eight years ago, when they were quietly exempted from Obamacare’s individual mandate penalty. The plans were an afterthought at the time, with only about 150,000 individuals enrolled in the faith-based plans. The exemption was included by Senate Democrats as a seemingly innocuous way to insulate the bill from attacks by Christian conservatives.
In the ensuing eight years, however, enrollment in health care sharing ministries has skyrocketed, particularly in states in which the individual insurance market has been beset by spiraling premiums and dwindling competition. As more people look for cheaper alternatives to health insurance, they are stumbling on ministry plans to escape Obamacare’s requirements and state oversight, but still satisfy the law’s individual mandate which, despite its repeal in the recent tax overhaul, remains in effect until 2019. Independent figures aren’t available, but according to the nonprofit groups that offer the faith-based plans—most of which are explicitly Christian—they now have more than 1.1 million members. What was once a fringe idea, limited to devout Evangelicals and small Mennonite churches in more rural parts of the country, has found acceptance with a segment of the population for whom the government safety net is unavailable and the free market options are unaffordable.
John McDonough, who served as a top Democratic staffer on the Senate Health, Education, Labor and Pensions Committee at the time Obamacare was enacted, cautions that the self-reported figures should be taken with a big dose of salt. “There’s lots of room for opportunistic rounding errors,” said McDonough, who is now a professor at Harvard University. “These plans have a promotional reason to puff up their numbers substantially.”
Still the figures are at least partially backed up by financial data on tax returns. Christian Healthcare Ministries, one of the largest plans, with well over 100,000 members, saw its revenues top $200 million in 2016, an increase of more than 500 percent from three years earlier. Similarly, Samaritan Ministries International, another of the major plans, had revenues of nearly $40 million for the 2016 fiscal year, an increase over 2013 of more than 300 percent.
The growth has been fueled in part by skyrocketing premiums in many states for plans that do meet the coverage requirements of the Affordable Care Act. Individuals who make too much to qualify for financial assistance often face premiums of $2,000 per month even for a high-deductible plan. And if they go without insurance, they’ll face an annual fine of $695 to $2,085 per person, depending on income. “People are desperately looking for options,” said Christine McPike, president of the Nebraska Association of Health Underwriters. “That’s why these ministries have a foothold in the market.”
But more aggressive marketing tactics by some health care sharing ministries has also spurred their growth. In addition, some of the newer entrants in the field are less stringent about the faith-based requirements that members must meet. The most religiously rigorous plans ask for a signed affidavit from a pastor, but some newer plans simply ask customers to sign off on a shared set of beliefs. Insurance experts worry that the rapid growth of health care sharing ministries could further destabilize the already wobbly Obamacare markets, beset by dwindling competition and spiking premiums.
“If healthy people gravitate toward these other arrangements, like health care sharing ministries, it can lead to higher premiums and less plan options for the people left behind,” said Kevin Lucia, a research professor at Georgetown University’s Center on Health Insurance Reforms. “It can have detrimental effects on the risk pool.”
Insurance experts also worry that consumers don’t realize there’s no guarantee that their medical bills will be covered, or that there’s no prohibition against discriminating against individuals because of pre-existing conditions, a bedrock protection of Obamacare. And when customers have complaints, there is no regulatory agency to appeal to, as there is with traditional insurance that gets heavy oversight from states. That means the plans do not need to meet requirements for how much money they must keep on hand to ensure they’re able to cover the medical claims of their members.
As a result, without insurance commissioners tracking complaints or a paperwork trail of lawsuits, reports of denied claims are largely anecdotal. Some states, such as Kentucky and Montana, have tried to shut down the ministries after reports of denied claims, but eventually relented, allowing the ministries to operate as long as they don’t call themselves insurance.
“If you’re a sick person you wouldn’t view this as a good option,” said Gary Claxton, an insurance expert at the Kaiser Family Foundation. “It’s mostly people who think they can wait or are willing to take the gamble.”
Erica Jackson’s family put that to the test within weeks of enrolling with Medi-Share. She suffered a miscarriage and then her infant daughter had a seizure and, later, broke her arm. When the bills started arriving, she panicked, worried that Medi-Share wouldn’t cover the costs—some $12,000 in all. Instead, as soon as she started submitting the expenses, Medi-Share began sending her checks for everything above her $3,750 deductible.
“I was freaking out for no reason,” said Jackson. “They had it all under control.”
For the first few years of Obamacare, Billy Jordan’s insurance firm in Charlotte did a brisk business helping families find coverage from among the choices that were initially available in North Carolina. But as plans dropped out of the market, leaving Blue Cross Blue Shield of North Carolina as the only option in most parts of the state, and premiums went up by double digits year after year, Obamacare became a tough sell.
In the most recent enrollment period, Jordan says he sold just two plans that meet the ACA’s coverage requirements. But his business is booming. That’s because he has shifted almost entirely to selling coverage offered by health care sharing ministries, enrolling nearly 500 individuals.
“It’s like a snowball coming downhill,” said Jordan, who signed up his own family in a health care sharing plan offered by Medi-Share last year, cutting his monthly premium costs by more than half. “People are starting to wake up to it.”
In the past two years, some health care sharing ministries have become more aggressive in marketing their products, most notably by paying brokers to enroll members in their products. At least three of the nonprofit groups—Medi-Share, Altrua HealthShare and Aliera Healthcare—now offer fees to brokers. But the practice is controversial—even among other health care sharing ministries—who fear it will blur the lines with traditional insurance and potentially invite scrutiny from state regulators.
“We think that may confuse folks,” said Brad Hahn, CEO of Solidarity International, which focuses on enrolling Catholics and began operations in 2016 after partnering with an existing plan run by a Mennonite church. “We’re not using any type of insurance language or insurance agents in any of our marketing.”
Medi-Share, which is the largest health care sharing ministry that pays brokers, defends the practice, arguing that it has strict rules to make sure that consumers aren’t deceived. “All of these new member representatives receive thorough training about Medi-Share, and there are systems and agreements in place to ensure that they comply with all relevant policies,” a company spokesman said in a statement to POLITICO.
Brokers are also getting more sophisticated in how they market the products to customers, sometimes pairing them with supplemental insurance policies to bolster coverage. Jordan, for example, pairs health care sharing plans with a traditional insurance product that includes coverage for prescription drugs and ambulance services.
“It’s all the things that a health care sharing plan didn’t have,” Jordan said.
The plans also dovetail with other efforts to bypass traditional health insurance networks. Some providers that don’t accept insurance and instead ask patients to pay for services out of pocket are recommending the plans to supplement their care.
Tim Murray runs a direct primary care clinic called Solstice Health in Oconomowoc, Wisconsin, west of Milwaukee. Members pay monthly fees, ranging from $39 to $79, to access care at two clinics in the area. But they’re also encouraged to combine that with a health care sharing plan in order to provide additional coverage options and avoid paying the individual mandate penalty.
Murray, an anesthesiologist, says he pays $219 per month to cover his family of five with a Medi-Share plan that includes out-of-pocket costs of $10,000. He says that interest in such alternative coverage arrangements has surged recently in response to spikes in premiums for Obamacare plans.
“We’ve just had a massive influx of people calling up and saying, ‘My rates are going up; I can’t do this anymore. Can you help?’” Murray said.
The growth in health care sharing ministries is also being spurred by plans downplaying the very reason that they were granted an exemption from Obamacare’s mandate in the first place: the religious devotion of their members.
Most of the plans share similar behavioral rules for members. Liberty HealthShare, based in Canton, Ohio, for example, requires its members to observe a “godly lifestyle,” reminding them that the purpose of the plan is not to save money but to honor the biblical teaching to “share one another’s burdens.” Most plans prohibit smoking, using illegal drugs, abusing prescription medications or drinking heavily. Medical expenses that are incurred from behavior that is deemed immoral—such as out-of-wedlock births or drunken-driving accidents—won’t be covered. In addition, they don’t typically cover medical procedures that Christian conservatives oppose, such as abortion and gender-reassignment surgery. They also don’t typically cover birth control, as required under Obamacare.
But in terms of actually practicing Christianity, the standards vary significantly. Some plans require that a pastor validate that the applicant is a member in good standing of a church. But others, including Altrua HealthShare and Liberty HealthShare, merely require members to sign a form attesting to a shared set of beliefs. (There’s no reason other religious groups couldn’t start health care sharing ministries, but they would have to partner with an existing ministry to take advantage of the Obamacare exemption.)
“We are unabashedly a Christian ministry,” said Dale Bellis, executive director of Liberty HealthShare, which started in 2013 after partnering with an existing Mennonite plan, and now says it has more than 200,000 members. “We don’t monitor an individual’s faith commitment—how many times they attend church or what their doctrinal beliefs are.” And no one checks up on people’s behavior at home—are there full ashtrays or garbage cans full of empty beer cans?
Despite the religious requirements, a greater number of secular customers are seeking out the plans.
Kelly Fristoe, an insurance broker in Wichita Falls, Texas, doesn’t think even some of the more stringent requirements are likely to discourage individuals from enrolling, particularly if they’re facing huge increases in premiums for Obamacare coverage.
“If you are going to take a person that is practicing a religion of [Hinduism], that person, if they are going to become a member of Medi-Share, they are going to have to lie,” said Fristoe, who says the number of his clients opting for health care sharing plans last year increased by 25 percent over 2016. “I know that’s happening. They still become a member because they want some form of protection and they want to be exempt from the penalty.”
After four years of living without health insurance, Poornima Wagh joined Liberty HealthShare in 2013 so that she wouldn’t have to pay the individual mandate penalty. She pays $200 per month for a plan that requires $1,000 in out-of-pocket costs. Wagh, who was living in California at the time, first shopped around on the state’s exchange, but thought the plans were too expensive. Plus, she found traditional insurance plans didn’t cover the alternative treatments, such as acupuncture, on which she relies to treat a back injury from a car accident. One dry needling session, for example, costs $110. Liberty, like most ministries, has a member services department that made sure Wagh’s treatments fall within the ministry’s detailed guidelines, which say that the ministry will cover alternative therapies if they head off more expensive treatments later on.
Wagh, 45, who was raised Hindu in India, wasn’t put off by the plan’s religious aspect. “I’m fairly open-minded about stuff like that,” said the Austin, Texas, resident. “They don’t thrust their ideology down my throat and they are not asking me to go to church every Sunday.”
Now she’s become an evangelist for health care sharing plans, persuading her sister’s family to join, as well as others with whom she’s talked about insurance.
“None of these people are really religious,” said Wagh. “It’s an individual thing.”
While Obamacare provided an unintentional boost for health care sharing ministries, they could now become an unintentional victim of the Trump administration’s latest efforts to undermine the federal health law.
As part of the GOP overhaul of the tax code, the individual mandate penalty is eliminated starting in 2019. That raises the prospect that the faith-based plans will lose a crucial advantage in the marketplace. Individuals who don’t value health insurance coverage might decide to go without coverage altogether once there is no longer a punishment.
“I think with the mandate gone the sharing ministries start to lose momentum,” said Kaiser’s Gary Claxton.
Health care sharing ministries profess to be unworried about the looming elimination of the penalty. They say that avoiding the fine for failing to get coverage was never a central theme of their marketing message. Instead, they primarily emphasize the religious component and cheap cost in wooing customers.
“If it’s a health care sharing group that simply existed as an alternative to the penalty, then that’s going to be detrimental to them,” said Joel Noble, vice president of the Alliance of Health Care Sharing Ministries, which represents many of the bigger plans. “Some of these groups that just came about post-ACA might have a hard time.”
But they are seeking additional changes to federal law that could bolster their growth. Legislation sponsored by Rep. Mike Kelly (R-Pa.) and Collin Peterson (D-Minn.) would allow members of health care sharing ministries to utilize tax-exempt health savings accounts to help cover medical expenses.
Erica Jackson is one customer who says she has no intention of dropping her Medi-Share plan once the individual mandate penalty disappears.
Jackson admits that she’s still learning the differences between her current ministry plan and traditional health insurance. For example, Medi-Share didn’t cover her son’s yearly preventative visit. She had to pay a $35 co-pay for that appointment. And now that Jackson is pregnant with her fourth child, she recently learned that the plan doesn’t cover a $350 genetic screen normally done at the end of the first trimester. So, she skipped the test.
But last year, when Jackson's daughter ended up in the emergency room, a Medi-Share employee called to check up on Jackson and offered to pray with her.
“Obviously Blue Cross Blue Shield and other insurance companies don’t do anything like that,” said Jackson. “It was nice to have a complete stranger call and check up on me.”
In fact, she says that unless she or her husband land a job with a good insurance plan, she’s sticking with Medi-Share.
“In the very beginning it was a dollars and cents thing,” said Jackson. “But what sold us was the belief system. It spoke to us. That was the cherry on top.”