With skyrocketing premiums and the growing emphasis on work-life balance, many families find traditional health insurance unaffordable. This is where healthcare-sharing plans come in.
HCSMs are membership groups whose members share religious or ethical beliefs and pay monthly contributions that are used to help cover medical expenses for other members. They may look like insurance, but they are not regulated by the federal government.
Cost-sharing reduces premiums in two ways: by limiting the amount that enrollees pay for care and by encouraging them to use medical services only when they need them. However, it can also result in low-value health care.
Unlike other cost-control strategies that target physician or medical group behavior, such as drug formulary restrictions and utilization reviews, the cost-sharing approach is directly aimed at individuals. This makes it a powerful tool for reducing over-utilization and excessive health care spending.
The ACA made a large number of preventive services exempt from the deductibles, copayments, and coinsurance that are common in traditional insurance. These include age-appropriate screening mammograms and colonoscopies, cholesterol screening, and many vaccines. However, some of these plans have their own deductibles and limits on the amount that members can share with doctors. They are referred to as medical cost-sharing plans and are often organized by religious organizations. These groups have no contracts with physicians and may limit payments to a “fair and reasonable” price that is typically less than the doctor’s normal fee.
Health care sharing programs have been around for many years, but they have become more popular since the Affordable Care Act went into effect. These plans allow members to share their medical costs with others who share a common belief system, and they can often be significantly less expensive than traditional insurance.
Like with other types of health insurance, cost-sharing plans include deductibles and coinsurance. This helps keep premiums low, but it also encourages plan participants to use their coverage wisely and only file claims when necessary.
Most health sharing coverage programs are religious-based and have requirements for new and existing members, such as living a morally healthy lifestyle and not abusing tobacco or other drugs. Additionally, these programs generally don’t cover pre-existing conditions and may decline membership for those with those conditions or limit their coverage to a year after the member joins. They do, however, provide coverage for most preventive health services, such as age-appropriate mammograms and colonoscopies, cholesterol screenings, and many vaccines.
With skyrocketing health insurance costs, many people are exploring options for alternative healthcare plans. One popular option is a healthcare sharing program. These are organizations that share medical expenses with other members. These programs are not bound by ACA rules and are usually exempt from its mandates. They are open to members who share similar religious or ethical beliefs and typically charge a monthly fee.
These groups can also offer members the flexibility to choose from a wide range of healthcare providers. They also offer members the option to combine their healthcare sharing program with a personal health account (PHA) or health reimbursement arrangement (HRA).
However, healthcare-sharing programs are not for everyone. They are not insurance, and there is no guarantee that a member’s medical bills will be shared. Furthermore, most health-sharing programs have guidelines that rule out expenses linked to morally objectionable actions. As a result, these programs may not be ideal for families who have a high income or who have complicated pre-existing medical conditions.
As premiums rise, more people are considering health sharing plans. These plans combine a way to save on insurance costs with the opportunity to serve others as part of their faith.
Unlike traditional insurance, these health care sharing ministries aren’t regulated by the federal government and don’t guarantee payment of medical claims. Some HCSMs match paying members with those who need funds for medical expenses; others pool monthly shares and administer payments directly to members.
Many HCSMs offer benefits like office visits and prescription drug coverage. However, these plans aren’t required to cover pre-existing conditions or lifestyle-related conditions like smoking.
Additionally, HCSMs may draw healthy individuals out of the ACA-compliant individual market, creating smaller and sicker risk pools and raising premiums. For a look at preliminary information about upcoming HCSM premiums, check out the DOI’s “Insurance Plan Filings & Requested Premiums” website. (Note: This site requires a login to view some information.) There’s also a step-by-step video guide to help you navigate the filings.