Why I Chose a Cost Sharing Ministry Over Health Insurance
I recently left my corporate job to join my husband’s Registered Investment Advisory firm. My husband has been on a grandfathered individual health insurance plan and pays reasonable rates. We thought I could be added to his policy for minimal costs. Instead we found that our best route was to get a quote from the exchange and we were shocked to find out the prices.
I am a healthy 51 year-old, but with our current regime, I couldn’t prove to an insurance company that I am a low risk and pay a lower premium. The best price I could find without co-insurance provisions was $830 a month for a policy that doesn’t kick in until I have paid a $6,500 deductible. How many people can afford this and who would want to pay it?
Since not having insurance is too risky and carries a penalty of roughly 2.5% of our Adjusted Gross Income, I decided to research alternatives. We knew some people that were part of Christian Healthcare Ministries (CHM), a health care cost sharing ministry, and I decided to research it:
What is it
CHM is a not-for-profit, health care cost sharing ministry where members share each other’s medical bills. Each member pays a monthly amount that is used to cover health care costs of other members. CHM was started in 1981, long before the Affordable Care Act (ACA).
CHM is NOT insurance. The monthly payments are not premiums and the ministry is not under a legal obligation to pay members’ medical bills. However, they do have a long history of covering the medical costs of their members.
Who is it for
To qualify for membership, participating adults must be Christians living by Biblical principles, including abstaining from the use of tobacco and the use of illegal drugs, following Biblical teaching on the use of alcohol, and attending group worship regularly if health permits. There are no restrictions based on age, weight, geographic location or health history, but there are limits on sharing for pre-existing conditions.
Monthly Financial Payment and Sharing Levels
CHM has three levels of sharing – Gold, Silver, and Bronze. I chose the Gold level for only $150 per month. At the Gold level, medical expenses must exceed $500 per incident, per unit, per calendar year, before they are eligible for sharing. After the first $500 of eligible expenses are paid by the Gold member, expenses are shared up to a maximum lifetime limit of $125,000 per diagnosis. A diagnosis of gallbladder problems and a diagnosis of a heart condition would be separate diagnoses, thus, each would be eligible for up to $125,000 in shared costs.
CHM uses a unit system, where a single person is one unit, a married couple is 2 units, and a family is 3 units, regardless of the number of dependent children. For example, if a married couple with 4 kids participates at the Gold level, the cost for the family would be $450 per month.
The Silver and Bronze levels have higher levels that must be exceeded before costs are shared, and they also are more restrictive in the types of expenses covered.[i]
For a small quarterly cost (on average, $25 per unit), and annual $40 administrative charge, a Gold member receives unlimited cost support per diagnosis if you pay to be in the Brother’s Keeper Program. I chose to add this option in case I had something catastrophic happen to me.
Costs Eligible for Sharing[ii]
The types of conditions for which bills are regularly shared include, but are not limited to, diabetes, cancer, back problems, blood problems and disorders, stroke, heart/cardiovascular, hernia repair, gastrointestinal, kidney stones, gallstones, pneumonia/influenza, and maternity and complications (subject to limitations based on participation level and not being pregnant at the time of joining CHM).
Typical expenses not covered include wellness visits, chiropractic, most dental and vision expenses, routine, maintenance prescriptions, abortions, births from unwed mothers, psychological treatment or tests, bills incurred as a result of the abuse of drugs or alcohol, and costs incurred from suicide attempts.
Only Gold level members are eligible to have costs shared for pre-existing conditions. If you have a pre-existing condition that is being actively treated other than with routine, maintenance medications, the costs won’t be shared. If at least 90 days have passed without testing or treatment and your doctor states that you are cured or on a maintenance treatment regimen, bills for any new incident related to the pre-existing illness are eligible for sharing in the first three years of membership in staggered amounts totaling $50,000. After the third year of membership, the condition is no longer considered pre-existing.
What Else You Need to Know
CHM is an exempt organization under the ACA, so if you and your family are members, you are not subject to the penalty for not having insurance. In 2016, a family of 4 with a household income of $80,000 and no health insurance (or exemption) would pay a penalty of $2,085[iii]. The national average bronze plan premium for a family this size is $10,204[iv]. A family of 4 that participates at the Gold level in CHM would have a comparable cost of $5,400, resulting in significant savings.
The monthly payments paid to CHM are not tax deductible. These payments are not for health insurance and they are not charitable contributions.[v]
Your healthcare provider will send all bills to you and you will submit the bills to CHM for sharing. You are responsible for your medical bills and you should negotiate for discounts as if you were paying cash for service.
We know two people who have had their pregnancies covered using a cost sharing ministry and one person who had knee surgery. There aren’t many negative stories online about CHM or competitor services Medi-Share or Samaritan Ministries. Joining a cost share ministry takes a leap of faith that the organization will continue to stay solvent and pay your bills when you need them to. Saving over $650 per month and having help after $500 instead of after $6,500 pushed us over the edge to take this calculated risk.
[i] See CHM guidelines for full details
[ii] See CHM guidelines for full details
[iii] Per the Payment Estimator at https://taxpayeradvocate.irs.gov/estimator/isrp/estimator.htm
[iv] Per the Payment Estimator at https://taxpayeradvocate.irs.gov/estimator/isrp/estimator.htm
[v] Payments above the required monthly amounts would be considered charitable contributions; CHM is a 501(c)(3) tax-exempt organization.