Two years ago, when Lane Chesley sat down at his home office computer and logged on to Healthcare.gov, with a plan to sign up for health insurance through the Affordable Care Act, he was shocked to discover his family’s premiums had skyrocketed to $36,500 for the year– more than half of their gross household income.
The quote, more than $3,000 a month, was 71 percent more than what they paid in 2015. And that cost was 40 percent more than what they’d paid the year before that.
Chesley lives in Homer, Alaska, a fishing town of 5,600 residents perched on the shores of Kachemak Bay. Should he and his family abandon their home of 34 years and move to a state with cheaper health insurance rates, he asked himself. Work another job to cover higher premiums? Pay the penalty for not having health care and go uninsured?
Chelsey, a commercial electrical contractor who runs a marine safety company, sought the advice of an insurance broker, who suggested looking into an alternative to the ACA: a health care sharing ministry. Chelsey was a member of the local hospital board, but he had never heard of such a thing. But he soon learned he could pay $300 a month for health care through a ministry, with a $500 deductible per person. He signed up with a ministry that originally established by Mennonites, Liberty HealthShare, and his application was approved.
“Now, I’m in an organization that rewards me for healthy behavior, whereas in the traditional insurance market, there’s not really many incentives for being healthy. It’s a sick-care system,” he said with a laugh.
In a shifting health insurance landscape, and with frequent threats from the White House and Capitol Hill to gut the ACA, Chesley is one of a growing number of Americans who have turned again to health care sharing to pay for medical expenses.
Between Nov. 1 and Dec. 15 of 2017, 8.8 million Americans signed up for insurance through the individual marketplace on Healthcare.gov, down from 9.2 million during last year’s enrollment period, when people had twice as much time to sign up for coverage under the Affordable Care Act.
Meanwhile, health care sharing ministries have seen their numbers soar, according to an estimate from the Alliance for Health Care Sharing Ministries. In 2014, when the Affordable Care Act, which recognized health care sharing ministries as an alternative form of insurance, fully went into effect, an estimated 160,000 people were enrolled in these programs nationwide. Today, as many as one million people have joined, says the alliance.
But unlike the ACA or employer-provided insurance, these ministries have no guarantee of solvency and can reject claims that traditional insurance companies are barred from rejecting. They also have little, if any, government oversight.
Sabrina Corlette studies health care policy and insurance at Georgetown University’s Center for Health Care Reform. She says that while sharing can be a cheaper option for healthier people, the sharing ministry programs don’t cover much and weaken insurance markets.
“You’ve got healthy people pulled away into these alternative products — health care sharing ministries just being one of them — leaving a sicker risk pool for the insurers that continue to abide by the ACA rules,” Corlette said. “It’s, unfortunately, a negative spiral.”
Other alternatives to traditional health insurance include association health plans that the Trump administration has touted as a cheaper way to cover people’s health cost. But critics say these types of plans are notoriously skimpy on benefits and could leave people without coverage when they need help most.
The idea behind the health care sharing ministries dates back at least a century. For decades, in Mennonite and Amish communities across the country, people pooled their money to lighten the burden of debt for individuals during hard times. And since the 1990s, larger ministries have fanned out to other Christian communities, offering services on the same principles.
Enrollment in sharing ministries has boomed since the implementation of the ACA, driven largely by people vexed by the individual mandate and climbing health insurance premiums, says the alliance, which represents the three largest such organizations in the U.S. and roughly 80 percent of people who benefit from ministries. The most popular time for people to apply is in December and January, after open enrollment for health insurance has closed.
But these ministries are not required to be solvent, keep reserve funds or accept anyone who applies. People can be rejected if they have a pre-existing condition — diabetes, cancer or Alzheimer’s disease — but also if their behavior is deemed unhealthy, such as smoking or using illicit drugs. Applications often ask where people attend church. In certain ministries, applicants can be denied membership if they do not sign a statement of faith pledging to live a Christian lifestyle.
Once accepted, members pay a monthly membership cost. When a medical need arises, members submit a medical claim for approval. If the cost is approved, it’s paid for by the ministry, which draws from the pool of money paid by members each month. It’s also common practice for members to pray with patients for their healing over the phone, individually or through call centers. Some ministries will assign members to a health coach. Treatment that is seen as a violation of faith — an abortion, contraception or treatment for opioid use disorder, for instance — may not be covered.
Jack Truex, who works at a supply warehouse in Durham, North Carolina, first learned about health care ministries from his employer, who offered them as an option in 2016. As he studied the application, it became clear that his wife, who has Grave’s disease and requires long-term medication for treatment, might not receive coverage. There were too many unknowns, said Truex, 63, who is preparing to celebrate his 40th wedding anniversary this year.
“My wife has some pre-existing things that they said possibly would not be covered,” he said. “That put up a red flag right away for me.”
He stayed with United Health Care. For him, the higher premiums were worth the assurance that his wife’s prescription drugs and medical care would be covered.
The ministries also have little government oversight. The National Association of Insurance Commissioners, which sets industry standards and regulations in 50 states, the District of Columbia and five U.S. territories, does not monitor ministries or track how states have responded to them.
Since 2014, the Centers for Medicare and Medicaid Services have issued letters of certification to 108 ministries, tracking how many offered health care plans. But it stopped issuing those letters in October 2016, according to a statement from the agency. It did not respond to multiple questions from PBS NewsHour about why.
A handful of states have tried to regulate these ministries. In 2007, a Montana judge ruled that Medi-Share must stop operating in the state after a pastor was denied payment three years earlier for treatment of his heart condition. Medi-Share later paid $835,000 to the pastor along with a separate confidential settlement. A decade later, Medi-Share resumed operation in Montana after the state’s newly elected securities and exchange commissioner, Matt Rosendale, said the ministry is not insurance and his office doesn’t have to regulate it. And in 2012, a Kentucky judge said Medi-Share, a Florida-based company, must stop business in the state until it was regulated as an insurance company. By the next year, Kentucky allowed Medi-Share to again operate so long as the ministry made clear they are not insurance.
By 2013, according to the Center on Health Insurance Reform, 21 states had passed similar laws saying sharing ministries were not insurance. These laws generally do not bar a ministry from operating in a state but rather warn buyers to beware of ministries that do not provide the same protections against medical debt as traditional health insurance companies do.
John Morrison, who served as Montana’s state auditor and insurance and securities commissioner and filed a cease-and-desist order against the company a decade ago, said ministries act as insurance and should be regulated to protect consumers.
“The insurance law exists to protect people,” Morrison said. “We shouldn’t allow people who want to make a buck to exploit people’s religious faith.”
One challenge to regulating these companies is that it’s not clear how many people use them.
In 2016, the Internal Revenue Service said 12.7 million Americans sidestepped the individual mandate penalty. Taxpayers use Form 8965 to request a waiver, indicating they have an alternative to conventional health care. Health sharing ministries qualify for an exemption because of an ACA provision that permits insurance collections that “share a common set of ethical or religious beliefs and share medical expenses among members. But the IRS does not publicly share how many consumers cite ministry membership to avoid paying the penalty, IRS spokesman Bruce Friedland said.
Lobbyist Martin Hoyt helped craft that exemption when Congress cobbled together the ACA in 2010. He says he persuaded Sen. Chuck Grassley, R-Iowa, former Sen. Max Baucus, D-Mont., and the late Sen. Ted Kennedy, D-Mass., to support protecting ministries in the legislation. Hoyt, who worked on behalf of the Alliance for Health Care Sharing Ministries and Bob Jones University, said he struggled to get their attention: “We were a very small pebble.”
“We tried to come up with the most reasonable stipulations,” he said. “If you leave it to the legislature to figure out, they’ll be much more restrictive.”
His efforts paid off. The ACA included a provision that would allow members of ministries that were formed by 1999 to avoid paying the individual mandate penalty. But there were some compromises, said Karen Pollitz from Kaiser Family Foundation.
The law said ministries could not kick out existing members if they became sick, Hoyt said. But unlike those seeking insurance through the ACA, people seeking health care through ministries were not guaranteed membership (meaning they would not have to accept people like Truex’s wife). The ACA also required ministries to conduct annual audits via a third party “with generally accepted accounting principles.” Those reports must be made available to the public upon request.
Brad Salter signed up for a health care sharing ministry called Sedera Health in 2016. His choices: Pick a traditional individual plan sold by United Health Care, at a cost of $73 every pay period, or pay $23 each paycheck for a membership to Sedera, based in Austin, Texas.
The only sales pitch he needed was the price difference, said Salter, a healthy 40-year-old father, husband and kickball enthusiast who manages warranties for heating, air and refrigeration parts at the same North Carolina supply warehouse as Truex. He applied but wondered: What’s the catch? The membership card he later received reminded him this was not insurance.
“That’s going to automatically scare people,” he said. “It’s different.”
Five months later, during a kickball game, Salter was rounding second base on his way to third, when he looked over his shoulder, fell and tore his left ACL. A few months earlier, his wife, a public school teacher, suffered the same injury during a kickball game and paid more than $3,000 under her employer-provided health plan from Blue Cross Blue Shield. Salter, on the other hand, required surgery, two months of physical therapy and a knee brace, but paid nothing out of pocket.
Here’s why. Salter’s employer covered the first $500 of an incident, a kind of downpayment on costs offered to each employee, he said. After that, his coverage through Sedera kicked in. He told his doctors he would prepay before surgery (something Sedera prefers, he says) and received a 40-percent discount — something not available if he or an insurance company had paid after the surgery. He sent Sedera his MRI scan, along with receipts from his initial visit with his surgeon, and a quote for an operation. Two weeks before the first incision was made, Sedera sent Salter a check to hand over to the surgeon.
Some organizations are more rigidly religious than others. One of the largest groups — Samaritan’s Ministries International, based in Peoria, Illinois — requires a priest or pastor to cosign a new applicant’s paperwork, vouching the applicant regularly attends church. That form must be re-submitted annually. Christian Care Ministry, based in Melbourne, Florida, and Liberty HealthShare, headquartered in Canton, Ohio, also ask potential members to sign a statement of faith that commits the applicant to adhere to a Christian lifestyle and avoid “food, behaviors or habits that produce sickness or disease.” And Altrua HealthShare, based in Austin, Texas, bears a statement of standards that says marriage can only exist between a man and woman and sex outside of marriage is “morally wrong.”
“We don’t believe our health care option is the choice for everybody,” said James Lansberry, executive vice president for Samaritan International Ministries, who said members often come to Samaritan by word-of-mouth because they must choose insurance and would rather pick something consistent with their values. The company’s homepage quotes the Book of Galatians in the Bible (“Bear one another’s burdens, and so fulfill the law of Christ”) and urges “Christians helping Christians with health care.”
And it requires a Christian faith leader to co-sign a person’s health care applications, confirming regular church attendance. Still other groups, such as Sedera, are more secular in nature. They ask applicants to live a healthy lifestyle, but don’t explicitly emphasize religious obligations.
Salter, a former Sunday school teacher, bristled at the idea of someone not receiving certain kinds of health care because of a person’s professed religious beliefs. “That sounds totally unchristian,” he said. He’s not required to sign a statement of faith in exchange for medical benefits. If he was, he “wouldn’t sign it.”
“If I work for a company, I feel religion should stay out of it. I feel like it’s personal and when it comes to your workplace and what they offer you, they shouldn’t say, ‘We have this plan to offer you, but in order for you to get it, you’ve got to sign that you’ll follow Jesus.’ I don’t think that’s right. How I worship, how often I worship shouldn’t depend on what kind of insurance coverage I get.”
Dave Weldon, a practicing physician and former Florida Republican congressman who directs the Alliance, said several ministries have reported significant growth. Smaller upstarts, such as Altrua HealthShare, grew from 300 households to 10,000 households last year alone — a rate that is “hard to sustain,” Weldon said. And more established ministries, such as Medi-Share, grew 300 percent since 2014 when the ACA went into full effect, he said. Some have had to install IT systems to better track money flowing into and out of the ministries, or have built prayer call centers in multiple time zones to keep up with demand.
Money flowing into the ministries has jumped from $98.5 million in 2010 to nearly $600 million in 2016. That’s compared to $3.3 trillion the nation spent on health care overall that same year.
But with prices that are often far lower than plans offered through the ACA or employers, some wonder if the growth is sustainable. Timothy Jost is a retired professor at Washington and Lee University School of Law who co-wrote one of the nation’s most widely used textbooks on health law. These groups aren’t required to set aside reserves, Jost said, and may overextend themselves to the point of insolvency as they take on more people escaping higher health insurance premiums.
“I just feel like it’s absolutely inevitable that one of them is going to run into huge claims and not be able to manage it, and then enrollees will see huge premium increases,” or simply won’t be able to pay, he said.
The tax reform bill that Congress passed and the president signed into law in December phases out the individual mandate by 2019, removing the penalty that drove so many to enroll in alternative health care plans like health care ministries.
Losing the mandate could bend the curve on the meteoric growth within health care sharing ministries. James Lansberry from Samaritan Ministries International said they could lose some members who joined only to avoid the penalty, and without it, “would prefer to go it alone.”
Back in his kitchen in Homer, Alaska, Lane Chesley sips black coffee at dawn. Even if he doesn’t see another dime in benefit, he feels medically and financially secure without actually having health insurance. He’s banking on his own health, good luck and a company that is not bound to honor its promise to get him through if he can no longer afford to insure himself.