Are "health share" plans legit?

TANSTAFFL. If there were a perfect health insurance, we would have one company offering that policy, and not hundreds of companies offering multiple policies.

[Disclosure: I sell health insurance among other insurance products.]

Is cost sharing legit? Yes, I know people who have years with the 800 pound gorilla in this field, Medi-share, and have been delighted with it.

Is cost-sharing a panacea? No way. Before the advent of reasonable cost personal health insurance, I used to look into cost sharing on behalf of some clients. The problems include: (1) reluctance to cover people with pre-existing conditions, and (2) a very limited doctor network. At least in my area, regarding a few of the older plans, the local hospitals are all on-board with them. When they started refusing my clients due to pre-existing issues, however minor, I stopped talking about them. I will still mention them in select cases where they might be appropriate.

I have heard of issues with some of the newer plans. Cost sharing isn't regulated in the way that traditional health insurance is, and it's very much a case of caveat emptor (buyer beware). People can have problems if they don't understand how it works before they buy into it. You have to read the fine print. If investing in this approach, it might also be wise to consider supplemental insurance (accident and hospital indemnity at the least).

They are trying to do something good and it looks good on paper. But when trying to actually be reimbursed for anything it is not good.  I had for 2 years, not a single claim paid anything...if I had no coverage I would have actually saved money.  I asked them when calling about the denied claims if this truly was Christian like values they purported.  Pay the extra, have something with regulations or take the risk and go without...if you don't go to a doctor much you will save money.  

I have been on Christian Healthcare Ministries for many years (not mentioned in this article). I DO have the Brother's Keeper which lifts any cap off of an incident (which the article above mentions). I have a friend who had breast cancer on CHM and she says it was an incredible experience. Sure there are some bad apples in the sharing world, but for $350 a month coverage for my family, CHM has definitely been worth it.  

An example of how it works....

Let's say I am out riding my bike and crash, breaking my arm. My medical bills for this incident total $2000. I pay the first $500 out of pocket, and everything else is shared by CHM. In about two months, I get a check for $1500 to cover the rest of the bill.

Later that year, I decide to go on a polar bear swim and get pneumonia. The bill for that comes to $389. Since it isn't greater than $500, I am responsible for the full $389.

Finally, towards the end of the year, my friend, who owns a circus, asks me if I want to get shot out of a cannon. YES! But then it goes wrong and I miss the landing net, breaking my face. As you can see, I am quite handsome and the surgical bill for reconstructive face surgery is $5,000. Since this is OVER $500 and I have already paid my $500 for the year, the whole $5,000 is reimbursed to me.

Note I am NOT a licensed insurance salesman nor is this any kind of Multi-Level Marketing deal.

from https://kickinsurancetothecurb.com

They can be, but you need to ensure that you read all the ins and outs, and they are more of a plan d or e, compared to other actual health insurance contracts.  But, if the choice is between them and nothing, then they are not a horrible option.  Although, I do NOT like the fact that they are NOT health insurance.  And I make sure to go over that if someone asks me about it.

I have sold many health sharing ministry type plans as an agent but I am no longer recommending them to my clients or prospects.  What I liked about them originally was that they were less expensive than an Obamacare plan and you could sign up at any time of the year.  What I have found over the last 12 months has been a mixed bag of experiences.  The first problem was with a client who had to have a hip replacement.  He had a health-sharing plan and they are refusing to pay the $40k bill because they are saying that the need for a hip replacement was due to a pre-existing condition of arthritis, etc.  We appealed the ruling and the company said that we needed to get statements from both the PCP and surgeon, on their letterhead, stating that they didn't feel the hip replacement was due to a pre-ex situation.  We got the 2 letters, submitted them and the company is still not paying the bill.  We are now in the process of a level 2 appeal.  The second client was diagnosed with breast cancer in May of 2019 and while many of the bills for her mastectomy have been paid, the ones that pertain to a "specialist", like her oncologist, are not being paid because her plan didn't include covering specialists.  The plan was indeed cheaper, which is what they could afford, but now there are thousands to be paid to the specialist out of their pocket.  Life throws you curve-balls when you are least expecting it.  Both these clients were healthy healthy when they came to see me and based on their budget and perceived good health they decided to try one of the faith based plans.  It is my contention that the money you save on the premium may not be worth the grief, aggravation and later expense if something unexpected happens.  With a religious plan, there is no contractual obligation to pay bills by the plan and you are not to refer to those types of plans using jargon associated with actual insurance.  They refer to themselves not as health insurance but as "health-sharing ministries", deductibles are called "member shared responsibility" and monthly premiums are called "monthly share".  If you are going to look at saving money, I would go with a limited hospital/surgical plan and back it up with additional ancillary plans like a critical illness, accidental injury and hospital indemnity policy so almost all the based are covered.  Even with all the add-ons, the total premium is still less than the full premium of an Obamacare plan without a subsidy.  I know my experiences are much different than other agents who also sell the faith based plans with no problems at all.  I just don't want to go through the heart-wrenching calls from clients that are fighting to get their health bills paid.  One of the faith-based plans has been banned in 3 states so far so that may be something to think about.

As I understand it, ACA plans have to cover everybody with all conditions, no exceptions. Medi share and similar are able to put exclusions in. This reduces the cost a lot. Example. If you have type II diabetes and then are hospitalized within the first 2 or 3 years of coverage, the hospitalization costs are not covered. That could be a major, bankrupting expense. They will still let you sign up. There is an exclusion for high blood pressure and some other things. So, it's useful for some people, but dangerous for others in my opinion.  

I have a number of clients that have gone this route.  I think it is important to go with a system that is established and not hard sell.  I know there are a couple that have gone out of business as they did not have reserves to operate.  I personally went with Christian Healthcare Ministries https://www.chministries.org/  last year when I lost tax credits/coverage.  I did a bunch of research at the time and found them to be reputable and established.  
I have never have had a claim and I only know one client who has.  They were paid quickly and with a check from the organization, verses getting a bunch of checks from many people- which some organizations do.   There is also Sedera, which is the same sharing concept expect for businesses or groups- no statement of faith is required with Sedera.  

Just my experience says they are a legitimate way to protect yourself and family from large medical bills.  It is not health insurance and does not act the same as insurance to pay routine or maintenance type of bills.  I coupled my health sharing plan with a Direct Primary Care plan and I think I have a really good plan that will take care of my needs for less than 1/3 of the monthly health insurance costs.  

Great explanation and analogies Jordan, however, since agreeing to get shot out of a cannon in my opinion would result in a denied claim, since the circus act was clearly irresponsible behavior inconsistent with the purpose of the plan that you were subscribed to.

These are not real insurance.  It is a collective, a co-op, that you hope sends you money when you need it.  There is no regulatory agency, like the insurance department, to complain to if/when you have a problem.  That being said, a have clients who could not afford the "affordable care act" and they have been reasonably happy on Medishare

I agree with Gary. You can further enroll through out the year and these (non-insurance) plans meet the min essential coverage for the upcoming 2020 year. Cost is super low. We have many clients on these type of plans. You further need to be healthy as you will go through underwriting, physically and spiritually ~ Best wishes from me and my team ~ Naama