by Dr. Chris Larson | Medical Costs
With each open enrollment, insurance costs increase and become a growing source of stress for individuals and families. Those not eligible for a tax credit may feel bookended between hefty monthly premiums or going without coverage altogether (while paying the substantial tax penalty).But many aren’t aware there is another alternative—and it’s called health care sharing.Health care sharing plans, also known as medical cost sharing, can potentially save you and your family a lot of money on healthcare. Let’s look at the basics of how these plans work and how they differ from traditional insurance coverage.
Health Care Sharing: How It Works
Health care sharing plans are provided by organizations whose members “share” medical costs.As part of a health care sharing plan, you are responsible for paying in a certain share amount each month (like a premium) as well as an “annual unshared amount” for your own expenses (like a deductible) that your medical expenses must exceed before the plan shares your expenses. The unshared amount is typically around $300-$500 for individuals, $1,000 for couples, and $900-$5,000 for families, although it varies per plan. Monthly cost ranges anywhere from $64-$627 depending on individual plan details and coverage.Beyond that, all medical expenses are shared among members of the organization.Health care sharing can be great for people who:
- Are generally in good health
- Are not eligible for a tax credit based on income
- Lack access to insurance through an employer or government program
- Aren’t able to get coverage from missing open enrollment
- Only want/need catastrophic coverage
- Can’t afford current health insurance premiums
Health sharing organizations are mostly religious-based. That doesn’t always mean you have to declare your faith to any particular religion to participate or join, but they do ask that you agree to live by a moral and healthy lifestyle—like not using tobacco or abusing drugs or alcohol.
Health Care Sharing vs Health Insurance
Health care sharing is not insurance, but the plans count as insurance under the Affordable Care Act (ACA). That means more affordable healthcare benefits while avoiding the tax penalty for going uninsured.Other pros of health care sharing over insurance include:Lower cost. Monthly costs of health sharing are usually much lower than insurance premiums, although the rules are different for what’s covered (see below). Also, the annual “unshared amount” is much, much lower than deductibles on lower-premium or catastrophic insurance plans.Your choice of provider. There are no network requirements, and you provide your health sharing card as coverage. If a doctor won’t accept your plan and you have to pay out-of-pocket, health sharing plans reimburse your expense.Now, the caveats: Health care sharing plans aren’t required to cover pre-existing conditions, such as cancer, diabetes, or lifestyle-related conditions like smoking. Those who have them may be declined membership or won’t have the conditions fully covered for a year or more.Health care sharing also doesn’t typically cover the essential health benefits like wellness exams or mental health counseling.
Health Care Sharing Plan Options: How They Differ
The most popular health sharing ministries include:Liberty HealthshareChristian Healthcare MinistriesSamaritan MinistriesMedi-ShareAltrua HealthshareAlieraCareSederaThe biggest differences between health sharing ministries are their guidelines for member acceptance, if they cover alternative treatments, and whether or not they process bills electronically.
Health Care Sharing and Direct Primary Care
Health care sharing programs are a great complement to direct primary care (DPC). Through DPC, 90-95% of a person’s primary health care needs are provided for one low monthly payment without any copays or deductibles to worry about—just a monthly retainer fee. DPC can include high-quality, low-cost lab and clinical services, medications, and consultations with specialists. Plus, you get high-quality care with DPC, because it offers better access to your doctor, virtually no waiting and longer visit times. With DPC you get a partner in health.Since additional services and catastrophic medical needs are not included with DPC, patients may purchase a high deductible plan to cover the extras. The problem is that out-of-pocket payments may still be too expensive. This is where health sharing programs come in.Even better: some health care sharing organizations offer discounts to those with a DPC membership.Health care sharing can fill in the gap of DPC services, and vise versa, making the pair a great option for covering healthcare needs at a more affordable cost.
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