Attending the annual Free Market Medical Association (FMMA) conference in Oklahoma City is a BRI tradition, and I am grateful for the generous scholarship that afforded me the opportunity to join my fellow students to learn about the possibility and promise of achieving a truly free market in medicine. Though the medical professionals in attendance were at various stages in their careers, they shared an excitement for a vision of medicine in which overbearing regulations and administrators are sidelined, and the doctor-patient relationship is emphasized. Notwithstanding recent congressional attempts to “repeal and replace” the Affordable Care Act (ACA), most at the conference maintained optimism about our health care system’s future. FMMA members’ grassroots efforts to practice patient-centered and cost-effective medicine would not be thwarted by elected officials’ inaction (or action!). The self-reliant mantra of improving health care by mobilizing savvy medical professionals resonated throughout the weekend.
Though many of the presentations were directed at medical professionals and their practices, health care consumers received a substantial spotlight through presentations on health care sharing ministries (HCSMs). Some of the larger HCSMs were represented, including Christian Healthcare Ministries and Liberty HealthShare. A Saturday talk on “Christian Sharing and Free Market Medicine” by Tom Yakopin was followed by a presentation from a representative from Christian Healthcare Ministries during a Sunday intermission.
Health Care Sharing Ministries (HCSM) are religious-based non-profits that provide health care for their members and have flourished under the ACA.”
HCSMs are religious-based non-profits that facilitate the payment of eligible medical costs amongst their members and have flourished under the ACA. HCSMs are non-profit organizations under section 501(c)(3) and exempt from taxation under section 501(a) of the Internal Revenue code. Participants in HCSMs must have a shared ethical or belief system and typically perceive their voluntary participation as a divinely sanctioned duty to one another. Most HCSMs are guided by Galatians 6:2, which states we must “carry each other’s burdens, and in this way, you will fulfill the law of Christ.” HCSMs are typically required to adhere to various basic tenets of a biblical lifestyle, such as abstinence from tobacco and illegal drugs, practicing moderate consumption of alcohol, and fidelity in marriage. Some ministries, such as Samaritan Ministries, requires a signature from a pastor or church leader attesting to the prospective member’s ability to adhere to these requirements. HCSM members share medical expenses amongst themselves regardless of where they reside or their employment status.
The ACA currently exempts participants of HCSMs from the individual shared responsibility payment. HCSMs are not under the same regulations as health insurance, so the minimum essential benefits of the ACA do not apply. However, only ministries that existed prior to December 30, 1999, have this “grandfathered” exemption from the mandate’s annual penalty. This statutory grandfathering limits people from freely opting to start a new ministry and pursue this mutual aid, which many perceive as a sincere religious duty.
The Alliance of Health Care Sharing Ministries, an Illinois-based lobbying group for health-share organizations, reported that there are now over 100 registered health-care-sharing ministries, only seven of which offer open membership. The Alliance of Health Care Sharing ministries was formed in 2007 as an organization that “engages in advocacy at both the federal and state levels and interacts with regulators, members of the media, and the Christian community to provide accurate and timely information on medical cost sharing.”(1) The alliance advocates to maintain HCSMs’ exemption from federal mandates to protect the members’ religious convictions and to achieve the federal and state tax-code parity enjoyed by other entities that pay for health care bills.
The three largest HCSMs are Christian Care Ministry, Samaritan Ministries International, and Christian Healthcare Ministries. In 2015, each of these ministries had over 100,000 members. In terms of dollars, these three HCSMs alone shared over $340 million. These ministries have seen a rapid enrollment in response to the implementation of the ACA’s individual mandate, with 195,000 new enrollees in 2014 and another 117,000 in 2015. Today, there are nearly 1 million health care sharing participants across the nation.(1,2)
HCSMs provide both affordable plans and the freedom to choose providers, all while providing portability and access to quality care. Compared to the Silver Plan on the ACA-created exchanges, ministry plans provide a narrower set of eligible medical care at lower costs, with the ability to add on eligible medical care for sharing. Savings through HCSMs can range from 45 percent to 60 percent below the cost of health insurance sold in the individual market. For example, Samaritan Ministries, regardless of plan type, costs approximately 50 percent less than the insurance benchmark in the individual market.(2) All HCSMs accept patients with preexisting conditions, but they usually will not cover the medical services used for preexisting conditions. Some, such as Christian Healthcare Ministry, address this by allowing people to request payment for medical bills related to preexisting conditions after continued membership for three years. The lifetime and annual caps to plans were removed under the ACA, along with a cap on out-of-pocket costs for catastrophic coverage. Typically, HCSMs offer add-on sharing, which allows for non-lifetime caps and catastrophic sharing.
Members of HCSMs can choose the physician, hospital, or pharmacist they would like, with no preauthorization needed to receive medical services or prescriptions. Selective contracting is rare in these ministries, and it is left up to the individual and fellow members to negotiate prices. The prices negotiated are often much lower than what will be paid out by insurance companies. For example, in Oklahoma a total knee replacement at a cash-based surgery center has been quoted at half the price of the average total knee replacement in the state.(3,4)
States under the McCarran-Ferguson Act have the authority to oversee insurance practices, giving them the power to exempt organizations from state and federal regulation. HCSMs are not recognized as health insurance, so the ability to deduct payments and the non-taxability of gifts received from HCSM members is not uniform across the nation. Members’ monthly share payments to HCSMs are not tax deductible, do not qualify for a federal tax subsidy as employer-sponsored health insurance, and may not be paid through health reimbursement accounts or section 125 cafeteria plans. In 2007, Missouri became the first state to amend its income-tax code to allow for personal deduction of HCSMs expenses, tax-free fringe benefits for employer-provided HCSM memberships, and non-taxability of gifts received from HCSM members to assist with medical expenses. Changing federal tax policy so that HCSMs are granted the same tax-exempt treatment as health insurers will incentivize greater participation in health care sharing ministries. To address this issue, the American Legislative Exchange Council has suggested reasonable legislation titled “Health Care Sharing Ministries Tax Parity Act.”(5) Ideally, the two major provisions in the law would include: (1) the ability to subtract money from personal adjusted gross income that was received as a member of the health care sharing ministry and money that was paid by an employer on behalf of the HCSM member; and (2) a deduction or credit granted for expenditures on medical care or health insurance premiums and employer contributions for a member. In more recent legislative efforts, Senators Lankford (R-OK) and Rubio (R-FL) introduced an amendment during the repeal-and-replace process, which would have allowed funds to be placed in tax-sheltered health savings accounts to cover medical care through HCSMs.(6)
It is important to note that issues of conscience seem to be an important factor driving participation in health care sharing ministries. Ministries do not allow for the sharing of medical expenses that are explicitly outside of their stated value system, such as abortion procedures. Therefore, members can be confident that they are not sharing funds for procedures that violate their code of ethics. Other exclusions, such as the lack of mental health services provided by certain HCSMs, are an effort to keep overall ministry sharing costs lower, especially since the elasticity of demand for mental health services is highly sensitive.(7) Critics would contend that HCSMs undermine the cost sharing of the insurance marketplace, since they tend to attract healthier members and therefore are not subsidizing those who are sicker. Though HCSMs are not a panacea for all the issues of the U.S. health care system, they provide an avenue to empower patients to use their own health care dollars wisely, receive affordable care, and maintain the freedom to voluntarily “bear one another’s burden.”
1. Alliance of Health Care Sharing Ministries. http://www.healthcaresharing.org/. Published 2017. Accessed September 25, 2017.
2. Daniels S. Health Care Sharing Ministries: An Uncommon Bond.; 2015. https://lozierinstitute.org/health-care-sharing-ministries-an-uncommon-bond/. Accessed September 25, 2017.
3. Procedures | Surgery Center of Oklahoma. https://surgerycenterok.com/pricing/. Published 2017. Accessed September 25, 2017.
4. A Study of Cost Variations for Knee and Hip Replacement Surgeries in the U.S.; 2015. https://www.bcbs.com/the-health-of-america/reports/study-cost-variations-knee-and-hip-replacement-surgeries-us. Accessed September 25, 2017.
5. Health Care Sharing Ministries Tax Parity Act. Arlington, VA; 2014. https://www.alec.org/model-policy/health-care-sharing-ministries-tax-parity-act/. Accessed September 25, 2017.
6. Senators Lankford and Rubio introduce Health Care Sharing amendment. Alliance of Health Care Sharing Ministries. http://www.healthcaresharing.org/senators-lankford-rubio-introduce-health-care-sharing-amendment/. Accessed September 25, 2017.
7. Barry CL, Frank RG, McGuire TG. The costs of mental health parity: still an impediment? Health Aff (Millwood). 2006;25(3):623-634. doi:10.1377/hlthaff.25.3.623.