Health Insurance Alternatives: What is Medical Cost Sharing?

Individual and Family

Health Insurance Alternatives: What is Medical Cost Sharing?

Published on March 19, 2018

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The portion of the ACA, or Affordable Care Act, that penalizes people who refuse to purchase health insurance may have generated more controversy than any other part of this legislation. Most people refer to this part of the law as the individual mandate.
The government does allow for quite a few exemptions from this penalty, according to the ACA website. While the Healthcare.gov website goes into great detail about financial hardship exemptions, it only briefly mentions that membership in certain groups can also help people qualify for an exemption. For instance, people who belong to certain religious groups may explore health insurance alternatives in the form of faith-based medical cost sharing groups, sometimes called healthcare sharing ministries, or just health ministries. To understand if health ministries would offer a good alternative to health insurance, take a moment to understand how they work and are different from ACA-compliant major medical policies.

Why do people consider health insurance alternatives like medical cost sharing groups?

According to a summary of medical cost sharing groups published by National Public Radio, these health insurance alternatives do not work like health insurance. Instead, health ministries work more like a co-op or a peer-to-peer funding organization. Members of the group contribute a certain amount of money each month. In turn, the group decides which medical needs to help pay for.
These are some reasons that medical cost sharing groups appeal to some people over other health insurance alternatives:

  • According to the medical director for one of these health insurance alternatives, average families may pay fees of less than $300 a month, so people may enjoy lower costs. The groups may also help pay bills for things that major medical typically won’t cover. These additional benefits could include help with funeral costs and adoption fees. Also, the group may also provide emotional, spiritual, and other kinds of support during an illness.
  • In addition, these health insurance alternatives may attract people who have religious objections to certain services that ACA plans must cover because of mandated benefits. For instance, some people object to contributing premiums to a medical plan that covers certain kinds of birth control. Without an exemption, all non-grandfathered, ACA-compliant medical insurance has to offer certain mandated benefits, which you can see below.

What's covered by Qualified Health Plans
On the other hand, the health ministries don’t offer the same guarantees that major medical does. Also members may have to agree to certain rules before they can join one of these medical cost sharing groups:

  • For instance, a Christian medical cost sharing group may require members to belong to certain religious denominations. They can exclude people outside of these religious groups.
  • Members may also have to agree that they will live a certain faith-based lifestyle, which could exclude smoking, drinking alcohol, taking non-prescription drugs, or other activities the religious group does not approve of. The medical ministry will most likely not cover bills associated with these lifestyle choices.
  • These health insurance alternatives also need to have been established as a medical cost sharing group before 1999 and have an accounting firm conduct a public audit each year.
  • Unlike health insurance, health ministries are not regulated by state departments of insurance and are not legally required to cover medical expenses.

Can Medical Ministries Offer a Good Health Insurance Alternative?

U.S. News reported that over 300,000 people in the United States belong to one of these medical ministries. People who have religious objections to the ACA or who would rather depend upon a faith-based organization for help coping with an illness may find that these kinds of medical cost sharing organizations provide them with a good alternative to health insurance. Some families even decide to buy an ACA plan with a high deductible to keep premiums affordable and use their medical cost sharing group as a way to supplement their benefits.
Most individuals and families should compare a variety of health insurance alternatives to figure out which plan or combination of plans will work for them, based upon medical needs, budget, and of course, preferences and beliefs. With a private exchange like eHealth, you can explore a variety of health insurance alternatives to make the best choice for you and your family.
The beliefs and opinions of health sharing ministries do not belong to eHealth.

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