Health care takes leap of faith

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An alternative to health insurance for Christians might sound like a good idea, but health policy experts caution that the plans are unregulated and offer no guarantees of coverage.

Three groups, Medi-Share, Christian Brotherhood Newsletter and Samaritan, offer “sharing” of medical bills. The groups say they are ministering according to Galatians 6:2, “Carry each other’s burdens, and in this way you will fulfill the law of Christ.”

This is the way it works: People send in a monthly amount, usually between $250 and $400, and their medical bills — if approved — are “shared” throughout the group. The groups allow claims for medical bills of $300 or more, but payment must be approved by the boards.

The catch: Christians only need apply. Church attendance is mandatory; participants must have no pre-existing conditions, such as heart disease, diabetes or cancer; and no smokers are allowed. The groups also forbid participants from engaging in homosexuality and extramarital sex.

Anyone who violates the rules will be expelled from the plans. Local pastors are relied upon to keep the funds updated about church attendance.

“We’re a sharing ministry,” said Robert Baldwin, executive director of Medi-Share, one of the largest of the sharing organizations. “We wanted a way members could support one another financially, as well as through prayer and cards. In the purest sense, we’re following Paul’s directive.”

The group determines eligibility — part of the application includes a letter from a church pastor — and then sets up an account. When participants have a medical bill, they submit it for approval. If it’s approved, the group pays 100 percent of the costs of care.

“A great many of our members can’t afford health insurance,” Baldwin said. “Particularly rural pastors and church staff. This offers them a way to have their bills paid.”

In many ways, the organizations operate like health insurance: there are monthly premiums, non-emergency care has to be authorized and a committee decides which bills are eligible for payment. The cost is about half that of typical insurance premiums.

Note of caution

But health policy experts sound a note of caution. The “sharing” isn’t health insurance, and there is no guarantee of coverage.

“The first problem is the litmus test for coverage,” said Ira Gorman, a Regis University assistant professor of public health policy. “The criteria are more evangelical, more conservative than even mainstream Christianity.”

The three health policies will not pay for abortions, treatment of sexually transmitted diseases or HIV, for example, and none will cover the costs of recovery from drug or alcohol addiction.

The other major difference, Gorman said, is the lack of regulation — a concern in several states in which the organizations operate. None of the groups maintain a reserve fund for emergencies, a requirement for traditional insurance companies, and none guarantees coverage.

“There’s risk-pooling in traditional insurance,” Gorman said. “These groups can duck regulations that are for consumers’ protection. There’s no appeal process if they don’t pay, unlike traditional insurance companies, and there’s no financial disclosure requirement.”

People can put money into these programs for several years, with the expectation that they’ll use it, Gorman said.

“But these programs don’t offer the same protection as other insurance options, such as HSAs or flexible spending accounts,” he said. “It’s almost like they’re saying that people don’t need insurance. And that’s troubling.”

Members are well aware that Medi-Share isn’t health insurance, Baldwin said. In 13 years, his organization has paid $250 million worth of medical bills for its members, keeping no reserve and only using about 18 percent for overhead and staff costs.

The donations are not tax deductible, because participants are paying for something they will use, he said. Members live in all 50 states and include overseas missionaries, he said. Medi-Share has more than 500 members in Colorado.

The organization also has another requirement that health insurers don’t — Medi-Share recommends “getting healthy and staying healthy,” Baldwin said.

“We encourage lifestyle choices to avoid those maladies related to obesity,” he said. “We’re dealing with a crisis in the health arena as a nation, and we’re helping members get their ‘temples’ pure again. We’ve had some tremendous results from the program.”

Cause for concern

But the lack of oversight concerns Gorman, who said the organizations are dispensing medical advice without a medical license. Members are required to get approval for non-emergency treatment, or pay $250 to the plan. Callers are routed to a medical panel headed by retired doctor John Evans, who also is a Medi-Share board member.

“These groups have a good intention,” Gorman said. “They’re trying to give a benefit to people, and that benefit could be significant. However, I do have concerns: they’re unregulated and they have a specific narrowing of the pool. I question the ethical decisions behind that narrowing — it almost seems to be against the Christian value of ministering to the sick. They only want to minister to a certain segment of the sick. And I’m concerned that there are no protections, no guarantees.”

Providing some coverage to those who might have none is one benefit of the plan, said Suzanne Discenza, a professor of health policy at the University of Colorado at Colorado Springs and Denver’s Metro State University. But, she said, the risks far outweigh the positives.

“Something is better than nothing,” she said. “And what they have to pay in is definitely cheaper than typical insurance. But I see a lot of risk here — a lot of opportunity for the administrators of the plan to take advantage of the members.”

Discenza said the administrative overhead costs are too high, and that members should be fully aware of the risk they are taking.

“Some other groups have tried versions of this,” she said. “Not with the lifestyle restrictions, but versions of self-insurance, where they cut out the middle man. And they have lost their shirts. A member just doesn’t have any recourse if they don’t pay the bill, no matter how much money they are paying in. There’s no guarantee.”

Insurance industry

The insurance industry is also concerned about these voluntary, unlicensed plans.

“The issue for us is that we work with states to have meaningful regulations in place, to protect the consumer,” said Mohit Ghouse, a spokesman for the industry group America’s Health Insurance Plans. “Any other product needs to be clearly marked that it is not insurance, and comes with risks, whether that’s a discount card or a community pooling arrangement.”

Ghouse said that consumers should make every attempt to find an insurance product that meets their needs, explaining that the more people who have insurance, the lower the costs will be. However, he said that as long as the organizations are not marketing themselves as insurance, the decision is left up to the consumer.

“I would be concerned about what happens if a few people use up the pool of money,” he said. “Our members believe in a competitive marketplace, and we’d never tell the consumer what to do. But there are products out there that are more competitive and come with less risk.”

Legal trouble

At least two of the organizations have found trouble with the law. Until recently, Christian Brotherhood Newsletter operated under a receivership, after an Ohio jury ruled that the founder, Bruce Hawthorn, defrauded the ministry.

He and other former officials were required to repay nearly $15 million spent on luxury homes, motorcycles, expensive cars and high salaries.

That’s another concern Gorman expresses: these groups are not required to file annual financial disclosures, the way insurance companies are. But Baldwin said that Medi-Share has independent, external audits of its finances each year, and is governed by an outside, independent board. Those financial statements are available to the public, he said.

Few states have investigated the groups. Maryland and Wisconsin’s insurance regulators temporarily suspended Christian Brotherhood Newsletter, but were overruled by state legislators who passed exemptions for the groups.

In Kentucky, regulators have been involved in legal battle since 2002, when regulators stopped the sale of Medi-Share memberships, saying it was unregulated insurance. The order was overturned, but the sides are still in court.

“We just were in court at the end of October,” said Ronda Sloan, a spokeswoman for the Kentucky Department of Insurance. “We’ll be back around Thanksgiving, but we expect the judge’s decision shortly after that.”

Kentucky took Medi-Share to court because the state believes the organization is operating as an insurer. While Kentucky has a religious publication exemption, the state does not think Medi-Share meets that standard, Sloan said.

“We started investigating because of a combination of things,” she said. “We had some phone calls asking what these people were doing, is it insurance? At the same time, we had been doing some Internet investigation — they do a lot of their sales over the Internet. So, it was a combination of factors. They don’t meet the exemption, so it’s our opinion they need to come under our jurisdiction.”

Few local complaints

Colorado’s Department of Insurance says it has received a “few” complaints about Medi-Share, but none in recent years.

The department would only investigate the organization’s dealings in Colorado if there were “active” complaints, said spokeswoman Peg Brown. However, she cautions residents: know what you’re getting for your money.

“People need to know what they are doing,” she said. “It’s not insurance and people who choose to participate need to be careful not to expect them to behave like insurance. They haven’t assumed risk.”

Brown said that as long as the organizations do not to represent themselves as insurance companies, they remain outside Colorado’s regulation.