Exploring Health Sharing Ministries: A Faith-Based Solution for Medical Costs

What Is A Health Sharing Ministry?

A health care sharing ministry (HCSM) is a non-insurance cost-sharing program that provides medical support and financial assistance to people of a common faith. HCSM members pool their money through monthly contributions that get redistributed later to cover the medical costs of other members in need.

To avoid tax penalties, HCSMs must abide by the following criteria:

• Certified as 501(c)(3) charitable organizations
• Members must share common ethical or religious beliefs
• Cannot discriminate based on location or employment
• Cannot withdraw membership for people who develop new medical concerns
• Must have existed continuously since December 31, 1999, or gotten grandfathered into HCSM status
• Subject to an annual audit by an independent CPA

Why Are HCSMs Growing in Popularity? 

Since the ratification of the Affordable Care Act, HCSMs have increased in number by over 500% from 2010 to 2018. One factor for expanded enrollment likely comes from religious stances against contraception and abortion. Since traditional insurers typically cover these practices, individuals of disapproving faiths sometimes choose these programs as the closest alternative that meets their ethical standards. Keep in mind that the ACA guarantees free contraception and neither supports nor prohibits coverage for abortion.

However, the financial implications of HCSMs likely have more to do with their recent growth.  Though coverage may often fall short of conventional norms, program memberships often cost less than health insurance premiums. Prospective members can also enroll in Ministries at any time without waiting for an open enrollment period or a qualifying life event.

How Do Health Sharing Ministries Work? 

Though Healthcare Sharing Ministries resemble insurance in many ways, their eligibility requirements, services offered, legal obligations, and how they provide medical treatment differ.

Eligibility Requirements For HCSMs 

Unlike conventional health care, HCSMs can impose particular membership requirements that, in other contexts, could be seen as inclusive or discriminatory:

• Members must share the same religious faith (most commonly, Christian) and sign a “statement of belief.”
• Members must obey devout lifestyle constraints, such as abstinence from alcohol, tobacco, and premarital sex.
• Members often must abstain from high-risk recreational activities such as rock climbing, sky diving, or scuba diving.
• Members must exhibit good health before joining and may be denied coverage or charged higher rates for pre-existing conditions.
• Members must agree to share costs through monthly contributions and regularly attend church services.

What Services Are Offered By HCSMs? 

Services paid for by HCSMs vary from program to program but typically include basic elements of healthcare such as medically necessary surgery, diagnostic testing, prescription drugs, and durable medical equipment. However, Ministries may deny paying for health problems caused by “ungodly behavior.” For example, a person who gets pregnant out of wedlock would not qualify for any maternity benefits or prenatal care.  

Similarly, they can deny services required to treat alcohol and drug addiction or treatment for injuries resulting from risky activities such as high-speed mountain biking. Ultimately, the services you receive depend on your specific program and the decision-making of its administrative board.

Are HCSMs Health Insurance? 

HCSMs are not health insurance and do not have the guarantees, mandates, and consumer protections standard to conventional health insurance. Currently, insurance laws in 30 states do not apply to HCSMs, meaning state insurance departments cannot intervene on your behalf should you encounter problematic coverage practices or neglect.

Because Ministrys do not conform to Affordable Care Act regulations, they do not have to cover essential health benefits such as preventative care, can deny coverage due to pre-existing conditions, and can impose annual and lifetime benefit caps. Furthermore, approved medical reimbursement comes as “contributions” from other members in your program, whereas a certified insurance carrier would pay your medical bills directly.

How Does Receiving Medical Treatment With an HCSM Work? 

HCSM members contribute a fixed monthly amount to a medical “savings account.” If you fall ill and require medical care, you must submit a request for financial assistance. Depending on the program, your request will get decided by a committee vote or a program administrator. If approved, your Ministry would directly pay your medical provider using pooled funds from other members’ savings accounts.

As with traditional health insurance, you must pay for a set amount of medical care out of pocket before qualifying for assistance. In this context, your annual household portion (AHP) resembles an insurance deductible. For example, if your HCSM sets your AHP at $5,000, you must pay $5,000 of all eligible medical expenses before cost-sharing could commence.

HCSMs vs. Traditional Health Insurance

	HCSM	Health Insurance
Preventative Care	No	Yes
Essential Care	Not required	Yes
Out-of-Pocket Limits	No	Yes
Prescription Coverage	Yes	Yes
Out-of-Network Providers	Depends on program	Depends on plan
Referral Necessary	Depends on program	Depends on plan
Pre-existing conditions	No	Yes
Ethical pretext for membership	Yes	No
Regulated by ACA	No	Yes

As indicated by this chart, HCSMs follow subjective coverage guidelines and offer no guaranteed protections. Suppose you broke your leg skateboarding. While marketplace insurance would cover you regardless of how you got hurt, a Ministry could deny coverage for disobeying community guidelines. HCSMs also can, and often do, deny minimum essential care such as maternity services, addiction counseling, and preventative exams.

Are HCSMs Regulated? 

Because HCSMs do not qualify as insurance under the Affordable Care Act, they do need to follow standard government healthcare regulations. This lack of oversight means that, unlike ACA plans, they do not have to cover the following essential health benefits:

• Ambulatory patient services
• Emergency services
• Hospitalization
• Pregnancy, maternity, and newborn care
• Mental health and substance abuse services
• Rehabilitative procedures
• Laboratory services
• Preventative services
• Pediatric services

Lack of regulation also means they can deny coverage due to pre-existing conditions or lifestyle choices, impose benefit caps, and circumvent investigation by state insurance departments. HCSMs do, however, get regulated by the IRS and state attorney generals to ensure they meet 501(c)(3) charitable requirements.

Can HCSMs Deny Coverage? 

Yes, HCSMs can and will deny coverage for a multitude of reasons.  If your program discovered that you had conceived a child out of wedlock, they would likely deny paying for any pregnancy, childbirth, or childcare costs. Similarly, if you needed medical service due to issues caused by substance abuse, your program would likely reject you for breaking their code of ethics.

Furthermore, they often deny coverage or charge higher rates for individuals with pre-existing conditions. If you have a debilitating, chronic, or high-risk disease such as lupus, diabetes, or epilepsy, your HCSM could deny your membership or coverage without any federal or state-level blowback.  

How Much Do HCSMs Cost? 

	HCSM	Health Insurance
Premiums	~$90/month	~$560/month
Deductible	~$5,000	~$1,763
Copay	n/a	~$25
Coinsurance	n/a	10-20%

As you can see, though Ministries ask for a much lower monthly contribution, they impose notably higher AHPs (or deductibles) before allowing coverage. However, premium subsidies in the ACA marketplace have become widely available due to the recently activated American Rescue Plan (ARP) and Inflation Reduction Act (IRA). These subsidized ACA premiums can fall as low as standard HCSM contributions, nullifying health ministries’ financial advantage. Plus, with an ACA plan, you’d have guaranteed minimum essential coverage.

Remember that the numbers above portray a very loose estimate of the final costs of both HCSMs and ACA health insurance. Your rates for either ultimately depends on who you insure with or what ministry you join, lifestyle choices, location, gender, and much more.

How To Join an HCSM 

Once you find an HCSM that matches your needs and religious affiliation, you can enroll by following these steps:

1. Fill out an application online: Most Ministries have a link to apply on their website. Typically, you’ll have to answer a few simple questions about your health, faith, and family.
2. Select your “plan”: HCSMs typically provide shareable benefits in tiers, the cheapest option offering the lowest reimbursement and the top tier offering the highest.
3. Sign and initial your application: By agreeing to the contract, you commit to a devout lifestyle and abstinence from activities such as smoking, drinking, and premarital sex.
4. Await your welcome package: Your new membership cards will arrive within 3-4 weeks.  Once you pay your first contribution, you become eligible for benefits.

Should You Join an HCSM? 

HCSMs generally expect their members to have no pre-existing health conditions, actively go to and participate in church activities, and abstain from risky or “sinful” lifestyle choices.  If you share a religious belief with the program of your choice, can confidently abide by their code of ethics, and exhibit relatively good health, you might make an ideal candidate for these programs.

However, while these programs advertise comprehensive shareable benefits, distributing these funds can prove much more complicated and victim to subjective decision-making than conventional health insurance coverage. Before committing to an HCSM, consider the full breadth of advantages and disadvantages.

Advantages 

The advantages of joining an HCSM include the following:

• You get to choose your monthly contribution based on available program options.
• Membership cannot get revoked if you develop a medical condition.
• Monthly contributions are typically much lower than health insurance premiums.
• Since they legally exist as charities, the IRS can audit them to ensure financial stability and honest accounting.
• You can sign up anytime without waiting for an open enrollment period or qualifying life event.
• They cannot deny or modify your membership status based on your location or employment status.
• HCSMs can cover qualified adoption and funeral services.
• These programs offer an alternative to ACA plans, and ultimately are better than going uninsured.

Disadvantages 

However, HCSMs pose a significant number of disadvantages. These include the following:

• Since Ministries do not qualify as legitimate insurance, consumers have no legal recourse for unpaid claims, denied coverage, or their programs declaring bankruptcy.
• Because the ACA does not regulate HCSMs, they do not have to provide minimum essential coverage such as preventative care or maternity services.
• They can deny coverage or impose higher premiums for people with pre-existing conditions.
• HCSMs can deny coverage based on lifestyle choices that conflict with their moral authority.
• Members must pay high out-of-pocket AHPs (similar to insurance deductibles) before qualifying for cost-sharing
• Health Care Sharing Ministries can set annual and lifetime limits to the financial support they will provide. Make sure to pay special attention to the terms of the specific ministry you are considering joinging.

Putting It All Together 

By enrolling in a health care sharing ministry, you agree to pool funds to help pay the medical expenses of other participating members in your religious community. While HCSMs have grown in popularity, they impose certain restrictions that may not work for everyone. Additionally, HCSMs are not regulated by the ACA, meaning they can act in their own interest and deny coverage where they see fit.

Conversely, these programs could make sense for families of steadfast religious belief on a budget or young people who do not expect to require much healthcare in the near future. If you cannot afford or do not want conventional health insurance, it would still protect you to some extent, despite its limitations.