When my husband Lee got laid off a few months ago, the thing that I was most freaked out about was the fact that we were going to lose our insurance. I have always thought of having medical insurance as being like wearing a seat belt — you just don’t ever, ever, EVER go without it. Now, four months later, I am doing just that. So what changed?
The “Affordable” Care Act
Unless you’ve been living under a rock, you know that there are big problems in this country when it comes to paying for medical care. The Affordable Care Act made medical insurance available to everyone regardless of pre-existing conditions (which is pretty important to me since I had cancer in 1999 and the last time I tried to buy medical insurance as an individual no one would touch me with a ten-foot pole) but for families like mine that make too much money to qualify for subsidies, it is a stretch to call the system “affordable”. When I started checking around I quickly learned that monthly premiums for many plans exceed our mortgage payment and most plans involve a very large deductible.
Running the Healthcare.gov numbers…the news is not good
My three sons have medical insurance through their biological father’s employer, so I was only shopping for insurance for my husband and me. After gathering information from Healthcare.gov and a local broker, I sat down to run the numbers. I compared 20 different plans, including the COBRA coverage from my husband’s former employer and Bronze, Silver, and Gold marketplace plans. By the time I added together annual premiums and annual maximum out of pocket amounts, I quickly realized that, if we had a major medical event, we were going to be on the hook for on the order of $20,000 of expenses per year, regardless of which plan we chose.
Even if we remained healthy and didn’t use our coverage at all, we would spend over $7,000 per year on premiums for the least expensive Bronze plan (a plan which would cover nothing until we met the $12,500 deductible). In order to get coverage similar to what we were accustomed to in our former employer-sponsored plan, our annual premiums were going to exceed $12,000 per year (and that plan had a $10,000 per year out-of-pocket maximum). And this was BEFORE the 2017 premium increases came out! I didn’t run those numbers, but many people will see premium increases on the order of 30-50% next year.
Another option — a Christian health care sharing ministry
These numbers sent me back to the drawing board and made me wonder whether we were going to be forced to give up our dream of my husband working in my clinic and take any job he could find just so that we could get back on an employer-sponsored plan. That’s when I remembered that a few of my patients had mentioned that they used a healthcare sharing ministry instead of medical insurance. I started researching that option and what I learned seemed almost too good to be true.
There are several healthcare sharing ministries, but I pretty quickly honed in on the largest and oldest one — Samaritan Ministries International (SMI). I read the policies and guidelines for a few other ministries, including Liberty Healthshare, Christian Healthcare Ministries, and MediShare, but found that I liked number of aspects of Samaritan Ministries the best (including the fact that its guidelines allow for payment for alternative treatments including acupuncture).
Comparison of monthly and annual maximum out of pocket costs
Here is a comparison between a two-person Samaritan Ministries membership and a middle-of-the-road Silver insurance plan ($5500 annual deductible and $13,200 maximum out of pocket). Remember, these are 2016 rates for the insurance plan — the 2017 rates are likely significantly higher.
(2016 Silver plan)
|Monthly cost||$715.82 in premiums||$440.00 in “sharing”||$275.82|
|Max annual out of pocket||$13,200.00||$900.00*||$12,300|
* Note that Samaritan Ministries does not cover the cost of annual exams, preventative medical services (such as vaccinations, colonoscopies, mammograms, etc.), costs associated with pre-existing conditions, or long-term/maintenance medications. See SMI Guidelines and discussion below for details. Samaritan members should factor these costs into their projected annual out of pocket expenses.
What is a Health Care Sharing Ministry (HCSM)?
So what is a health care sharing ministry (HCSM) and how does it differ from insurance? According to The Alliance of Health Care Sharing Ministries:
A HCSM provides a health care cost sharing arrangement among persons of similar and sincerely held beliefs. HCSMs are operated by not-for-profit religious organizations acting as a clearinghouse for those who have medical expenses and those who desire to share the burden of those medical expenses.
- HCSMs receive no funding or grants from government sources.
- HCSMs are not insurance companies. HCSM do not assume any risk or guarantee the payment of any medical bill. Thirty states have explicitly recognized this and specifically exempt HCSMs from their insurance codes.
- HCSMs serve more than 625,000 people, with participating households in all fifty states.
- HCSMs’ participants share more than $670 million per year for one another’s health care costs.
- HCSMs strive to be accessible to participants regardless of their income, because traditionally shares are a fraction of the cost of insurance rates.
How does it work?
Every HCSM is a bit different, but in the case of Samaritan Ministries, the way this actually works is this:
- When we become members, we agree to abide by a code of conduct, including not smoking, not using alcohol excessively, not engaging in promiscuous sexual activity, and not using illegal drugs.
- We commit to paying a certain amount toward other member’s medical expenses each month. This amount is called a “share” and is determined by the number of people in our family and their ages. In the case of my husband and me, that amount is $440.00 per month.
- Members who have medical expenses in excess of $300 per incident submit documentation of their expenses to the central office (members are responsible for paying for incidents less than $300 out of pocket, up to a maximum of three incidents per year).
- If necessary, the central office assists members in negotiating a cash-pay discount with their provider.
- Each month the central office publishes a newsletter and in that newsletter directs us where to send our monthly share. Eleven months out of the year, we send our monthly share directly to the individual who had a need. The twelfth month we send our share to the Samaritan Ministries office to cover administrative costs.
- Individuals with needs published in the newsletter receive a checklist from SMI so that they know who they will be receiving checks from. As checks arrive from all over the country, they check names off the list. If there are problems with checks arriving late or not at all, Samaritan Ministries takes care of it (although I am told that this is exceedingly rare). The recipient then uses these funds to pay their medical providers directly.
- Some months the “shares” exceed the “needs”. When this happens, the monthly share is reduced for everyone. During the month of November, our share was reduced 5% and during the month of December our share was reduced 6%.
- Some months the “needs” exceed the “shares”. When this happens, needs are pro-rated. This means that someone with a need might only get 80 or 90% of their need met the first month it is published. The remaining amount gets taken care of in subsequent months. If needs exceed shares for four consecutive months then the whole membership is asked to vote to raise the monthly share amount.
There are several big advantages to this system:
- Monthly and maximum out of pocket costs are much lower for most people when compared to medical insurance available through Healthcare.gov.
- There are no provider networks — you can go to any doctor or hospital you want.
- You and your doctor can make medical decisions based on what is in your best interest (as opposed to what the insurance company will pay for). Any physician will tell you that insurance companies are exercising more and more control over medical care with each passing year, often to the detriment of patients.
- Alternative treatments (including acupuncture) are covered, as long as the alternative treatment is cheaper and/or is expected to be more effective than conventional treatments. This even includes non-FDA approved treatments available in other countries.
- You are sharing medical expenses with individuals who have a similar commitment to healthy living. I work hard to take good care of myself and it always bugged me a little bit to know that my insurance premiums were disproportionately going toward providing care for conditions either caused by or made worse by lifestyle decisions.
- Everyone is incentivized to improve their health and limit their utilization of health care resources. There is something about knowing that an actual individual is going to write a check directly to you to reimburse you for your medical expenses that motivates everyone to take better care of themselves and limit their spending. Each month in the Samaritan Ministries newsletter there are new ideas for reducing your need for medical care (by improving diet, lowering stress, etc.) and reducing the cost of care that you do utilize (using resources such as Healthcare Bluebook, GoodRx, and others).
- I’ve heard a few disastrous stories about insurance purchased through Healthcare.gov. One friend signed up for a policy and dutifully paid her premiums each month, only to learn later that as a result of a glitch her policy had been canceled months earlier, leaving her responsible for tens of thousands of dollars of bills. Another friend’s husband was showing signs of a heart attack and so they did what any reasonable person would do and went to the nearest emergency department, where numerous tests were run and her husband was admitted overnight. They later learned that their policy required them to get a referral from their primary care doctor before going to the emergency room, so none of these expenses would be paid for. A third friend had a child who needed an expensive antibiotic because of a drug-resistant bacterial infection and was surprised at the pharmacy to learn that her policy only covered maintenance medications and not medications prescribed for an illness. Obviously not everyone has problems like these with their marketplace plan, but these stories prove that some marketplace plans have crazy exclusions and there are still some serious bugs in the system. Caveat emptor definitely applies.
- The election of Donald Trump makes the future of the Affordable Care Act uncertain. I am very relieved not to have to wait and wonder whether the forthcoming changes will make it impossible for me to get insurance because of my medical history.
- I searched high and low on the internet for critical reviews of Samaritan Ministries. The only negative comments I came across were from people who weren’t members and hadn’t taken the time to understand how HCSMs work. Everything else I found was glowingly positive. It would appear that most Samaritan Ministries members are extremely satisfied with their experience. You can’t say that about much you research on the internet these days.
- Samaritan Ministries membership satisfies the health insurance mandate. According to the Samaritan Ministries website: “This approach satisfies the federal health care law’s (Affordable Care Act, U.S. Public Law 111-148) requirement that you have insurance or pay a penalty-tax (see 26 United States Code Section 5000A, (d), (2), (B)). Members of health care sharing ministries demonstrate their exemption by using IRS Form 8965 when filing their tax return. If you are not required to file a tax return, you do not need to do anything to prove your exemption.“
- When I called the Samaritan Ministries office with questions I got a hold of a real person immediately. That person was friendly, helpful, and was able to get me the information I needed right away. Even after we hung up, he called me back a few minutes later with a helpful clarification. This contrasts sharply with the contact that I’ve had with insurance companies in the past.
- Also, you avoid participating in this craziness:
There are also cons, factors that would be deal-breakers for some people:
- You have to be a Christian. As part of the application process, you have to agree to a statement of belief and a leader from your church must fill out a form vouching for the fact that you are an active participant in a church community (attending services at least three out of every four weeks).
- Treatment for pre-existing conditions is not publishable. According to the guidelines: “Needs that result from a condition that existed prior to membership (known or producing observable symptoms) are only publishable if the condition appears to be cured, and 12 months have passed without any symptoms (benign or deleterious), treatment, or medication (even if the cause of the symptoms is unknown or misdiagnosed). Tests or a doctor’s statement may be required to verify the lapse of symptoms, treatment, and medication. Exception: For genetic defects, hereditary diseases, cases of related cancers, and for heart conditions, the symptom/treatment- free period is five years.” SMI does publish expenses associated with pre-existing conditions as what they call “Special Prayer Needs”. Members are not obligated to send funds for Special Prayer Needs but many people do. For example, I have a patient whose son needed an expensive eye surgery that was diagnosed prior to their membership. They received checks to cover every penny of that expense.
- Maintenance medications are not publishable. Up to four months of medication is published when you have a medical event, but if you need medication on an ongoing basis then you are responsible for paying for that medication out of pocket (an exception to this policy is made for medications for cancer).
- Annual medical appointments and preventative medical exams (like mammograms, colonoscopies, and the like) are not publishable. The rationale behind this is that, by their very nature, these expenses are routine and can be planned (and budgeted) for.
- The guidelines dictating which treatments will be reimbursed are very pro-life. I would encourage everyone to consider this carefully and make sure they are comfortable with the limitations that Samaritan Ministries imposes on procedures they will publish.
- You need to have resources set aside to cover medical expenses while you wait for reimbursement from SMI members. Many doctors and hospitals offer generous discounts for patients who are paying with cash, but quite understandably they generally only extend those discounts to those who are able to pay at the time of service or very shortly thereafter. According to the Samaritan Ministries website, “The publishing turnaround time is normally 30-60 days from receipt of your bills and required information. If your Need Processing Form is correct and complete, and there are no ongoing financial negotiations with providers, your need will be published at the beginning of the second month after we receive your need. For example, a need received by the end of September would be processed in October and published at the beginning of November.” So say, for instance, you go to the emergency room for an injury on September 1. The bill for your visit arrives on September 15 and you are able to negotiate a 50% cash discount, provided that you pay the full balance within 30 days. If you submit documentation to SMI by the end of September, your need would be published in the November newsletter and your shares would begin arriving a few days later. This means that there could be a month or more between when you have to pay the hospital in order to get a cash discount and when you receive reimbursement from SMI members.
Samaritan Ministries is a good option for us. Under the guidelines, neither my husband nor I have pre-existing conditions. Neither of us take any medications. We are comfortable with paying out of pocket for preventative medical services (those costs are minimized for us because we are under the care of a Direct Primary Care physician). We have sufficient savings to cover the cost of care if we need to pay bills and then wait a couple of months for reimbursement. I am comfortable questioning my doctors about whether there are less expensive treatment options available, whether a test is really necessary, and whether they are willing to offer me a discount for prompt cash payment.
Samaritan Ministries is not available to non-Christians or to Christians who do not attend church regularly. It would likely not be a good option for families with significant and/or ongoing expenses associated with a condition that would be defined as pre-existing, families with large expenses associated with maintenance medications, anyone who is not comfortable with the strict pro-life guidelines, or anyone who is intensely private about medical matters (brief details related to your need are published along with your name in the letter that is sent to the people who are going to be covering your expenses, for example: “Sally Brown had surgery to treat endometriosis“). It would also likely not be a good option for individuals who are not comfortable asking questions, advocating for themselves, or making cost comparisons prior to seeking medical care.
If you are considering Samaritan Ministries membership, please review the SMI website and read the Guidelines carefully. If it turns out that Samaritan Ministries is a good fit for you too, please consider giving my name when you are asked how you heard about SMI (I will receive compensation for the referral).