Health share programs – also called “medical cost sharing” plans, have gained increasing popularity as a viable option for those looking for an affordable and ethical alternative to overpriced and unaffordable traditional health insurance plans.
In this blog, we will explore the benefits and limitations of health sharing programs, enabling you to make an informed decision about your healthcare coverage.
How Health Sharing Programs Money
First, let’s discuss cost savings.
Health sharing programs offer a cost-effective alternative to traditional unsubsidized health insurance premiums. Unlike conventional insurance, which involves paying fixed premiums, health sharing programs operate on a cost-sharing model.
Like-minded members contribute a monthly “share” amount, which is generally lower than unsubsidized traditional insurance premiums – and sometimes even lower than subsidized ones.
These contributions are pooled together and used to cover eligible medical expenses of plan members.
When our clients switch from a traditional, unsubsidized health insurance plan to a health sharing plan, it’s extremely common for health sharing to generate savings of 30% to 50% off what the family was already paying for health insurance.
Health Sharing Programs Are Not Health Insurance
Health sharing programs are not health insurance.
Health sharing is based on voluntary sharing of medical expenses among members who share similar ethical or religious beliefs.
Unlike traditional insurance, health sharing programs are not regulated by state insurance departments, and there is no guarantee of coverage for specific medical services.
When considering a health sharing program, carefully review the organization’s Statement of Beliefs or guidelines to ensure they align with your values.
For example, some plans may require you to regularly attend religious services. Other plans are completely non-denominational and even secular. Read more about what is health sharing.
You can read the statement of beliefs of several of the best health sharing organizations in the country by clicking here.
Pre-existing Conditions Restrictions
A significant limitation of health sharing programs is their approach to pre-existing conditions. Unlike traditional insurance, which typically covers pre-existing conditions immediately upon enrollment, health sharing programs may have stricter restrictions. Some programs may exclude coverage for pre-existing conditions altogether, while others may offer limited coverage or require a longer waiting period.
Expert Tip: If you have pre-existing conditions, inquire about the program’s policy regarding coverage for these conditions and any waiting periods that may apply.
Health sharing programs often impose waiting periods before certain services or conditions are eligible for sharing.
Waiting periods can vary from a few months to a few years, depending on the program and the medical condition. During these waiting periods, members are responsible for their own medical expenses related to the specified condition or service.
Consider the waiting periods for specific medical services or conditions that are relevant to your healthcare needs.
Surgery Waiting Periods
Health sharing programs may also apply waiting periods for elective surgeries, which are non-emergency procedures scheduled in advance.
Waiting periods for elective surgeries can vary significantly among different health sharing programs.
If you anticipate needing elective surgery in the future, look carefully about the specific waiting period for this type of procedure under the health sharing program you are considering.
Religious Requirements and Restrictions
As mentioned earlier, health sharing programs often have religious or ethical affiliations. Some programs may require members to adhere to specific religious principles or behavioral guidelines.
Nearly all health sharing programs offer maternity coverage.
But they may have specific guidelines and waiting periods related to pregnancy and childbirth.
Most medical cost sharing organizations also put caps or maximums on the amount the health sharing plan will share per child or per pregnancy.
Additionally, unlike traditional health insurance policies, some health sharing plans will not share maternity costs for women who were unmarried at the time of conception. In other cases, they will not share maternity costs unless both parents are married and members of the same family health sharing plan at the time of conception (i.e., nine months before the birth or due date of the baby).
Prescription Drug Benefits
Prescription drug coverage varies among health sharing programs. Most commonly, health sharing plans do not offer sharing costs for brand name prescription drugs directly unless they are administered in a hospital setting.
Instead, health sharing plans leverage their tremendous buying power to negotiate deep discounts on their retail costs, and make better pricing available either through mail order or through tens of thousands of brick-and-mortar pharmacy locations nationwide.
Additionally, certain medications or drug classes may be subject to limitations or restrictions.
If access to a specific drug or drugs is important to you, you should definitely check the plan’s formulary before enrolling to make sure the drug you need is available at a reasonable price.
Alternatively, you can explore third-party drug discount plans like the HSA Advantage Rx program. This program can save you up to 70% to 80% off hundreds of the most commonly prescribed retail generic drug costs.
The HSA Advantage Rx program is free for all HSA for America clients.
If you regularly take prescription medications, review the program’s prescription drug benefits and formulary to ensure your medications are covered.
Click here for more information about health sharing plans and prescription drug benefits.
Comparing Member Responsibility Amounts
Health sharing programs may have a member responsibility amount – sometimes called an initial unshared amount – which functions similarly to a deductible in traditional insurance.
This is the initial amount that members must pay before the sharing of medical expenses begins.
The higher the member responsibility amount, the lower the monthly cost will be, all else being equal, and vice versa.
Comparing member responsibility amounts among different programs can help you understand your upfront cost-sharing obligations. And by choosing a higher initial unshareable amount, you can keep your monthly costs low.
Comparing Maximum Annual Lifetime Benefits
Health sharing plans may have maximum annual or lifetime sharing limits.
These limits represent the highest amount the program will share for medical expenses within a specific period. Comparing these limits can help you evaluate the program’s overall generosity and financial protection.
Some healthshare plans have lower annual or lifetime sharing limits for tobacco users than for others – especially for tobacco-related illnesses such as lung cancer and emphysema.
Consider your potential medical needs and the potential costs of long-term or chronic conditions when evaluating sharing limits.
Some health sharing programs may have exemptions or limitations related to specific medical services or conditions.
Review the program’s exemptions to ensure they do not impact your healthcare coverage adversely.
Understanding exemptions can help you avoid unexpected out-of-pocket expenses.
Do Health Sharing Programs Qualify for Subsidies?
Unlike ACA-qualified traditional health insurance plans available via the state and federal online health insurance exchanges, health sharing programs do not qualify for a premium tax credit subsidy under the Affordable Care Act.
However, the cost savings for medical health sharing plans are so significant compared to traditional health insurance plans that it often makes sense to use a health sharing plan rather than an ACA-qualified “Obamacare” plan. This is especially true for millions of Americans who don’t qualify for an Obamacare subsidy at all, due to their income.
Compare Pricing on the Best Healthshare Plans Available
Health Sharing Programs and Health Savings Accounts
At least one healthshare plan, HSA SECURE, can be paired with Health Savings Accounts (HSAs), which offer tax advantages for medical expenses.
Contributions to an HSA are made pre-tax. So taxes aren’t taken out before you make your contribution, which is a great deal for HSA owners.
You can then use the money in your HSA to pay for eligible medical expenses tax-free, including those that may not be shareable through the health sharing program.
The Power of HSAs
HSAs are perhaps the single most potent and effective tax savings and investment vehicle available to ordinary consumers:
- Contributions to HSAs are tax free.
- Growth in the HSA is tax deferred
- Withdrawals used to pay for qualified medical expenses are tax-free.
- Money you don’t need for medical expenses continues to grow tax-deferred until you need it in retirement, and is available penalty free after you turn age 65.
If you’re a fan of consumer-directed healthcare initiatives in general, as we are, the HSA SECURE plan, coupled with a health savings account, is definitely worth looking into.
However, you must be a business owner or have some self-employed income in order to enroll in HSA SECURE.
10x Your Research Efforts
You can spend hours pouring over dozens of health sharing plan websites researching the details of each health sharing ministry’s benefits, costs, and exclusions.
But you don’t have to.
We’ve already done that for you.
All you need to do is click here, select your state, and pick a time for a free, no obligation personalized review, consultation, and recommendation.
You’ll be connected with an experienced, highly-trained Personal Benefits Advisor, each of whom are recognized experts in health sharing and health insurance for individuals, families, and small businesses.
We’ll go over your individual circumstances, help you identify what factors are most important to you, and help you select the best possible plan for your needs.
Conclusion on Health Sharing Programs
As you consider health sharing programs as an alternative to traditional health insurance, remember to thoroughly evaluate their benefits and limitations.
From cost savings and coverage restrictions to waiting periods and tax implications, understanding the details is vital to making an informed choice.
By comparing multiple programs and understanding their unique features, you can select a health sharing option that aligns with your healthcare needs and values.
Schedule a free consultation with a Personal Benefits Manager to receive personalized guidance and explore the best health sharing program for you.
Health Sharing Program FAQs
What are health sharing plans?
Health sharing plans are community-based alternatives to traditional health insurance, where members pool their financial resources to share eligible medical expenses. They are non-profit associations of like-minded and health-conscious individuals who agree to help share the unexpected medical bills of the other members.
Each member contributes a monthly “share” amount, which is used to cover the medical needs of other members.
How do health sharing plans work?
Every member contributes a set minimum monthly sharing amount to the plan.
That member also selects an initial unshared amount, which is the amount that member will pay for their own medical care and those in their household before the plan’s cost sharing benefits will kick in.
When a member incurs a medical expense that meets the program’s sharing guidelines, and exceed’s that member’s initial unshared amount for the year, the eligible cost is shared among all the members of the health sharing plan.
How are health sharing plans different from traditional health insurance?
While health sharing plans offer a cost-effective way to manage medical expenses, they are not health insurance.
Health sharing is based on shared beliefs and values, and there is no guarantee of coverage for specific medical services.
Unlike health insurance, health sharing plans are not regulated by state insurance departments.
What are the advantages of health sharing plans?
Health sharing plans offer several advantages, including lower monthly share amounts compared to traditional insurance premiums and flexibility to choose healthcare providers without network restrictions.
Can anyone join a health sharing plan?
Health sharing plans typically have certain eligibility requirements, such as adhering to specific ethical or religious beliefs.
Some plans may also have age restrictions or health guidelines. If you have certain pre-existing medical conditions, you could be turned down for membership. Or the health share organization could impose a waiting period on sharing costs related to that pre-existing condition.
Are pre-existing conditions covered by health sharing plans?
Health sharing plans may have varying policies regarding pre-existing conditions. Some plans may exclude coverage for pre-existing conditions, while others may impose waiting periods before sharing expenses related to such conditions.
Can I use my health sharing plan outside of the United States?
Some health sharing plans may offer limited coverage for medical emergencies abroad. However, it’s essential to verify the plan’s international coverage and consider supplemental travel insurance for comprehensive protection.
How do health sharing plans manage healthcare costs?
Health sharing plans negotiate with healthcare providers for discounted rates, which can help reduce overall medical expenses.
Additionally, members are encouraged to adopt healthy lifestyles, leading to lower healthcare utilization.
Unlike traditional health insurance plans, health share plans don’t have to take all comers during an open enrollment period.
Instead, healthshare plans can and do impose waiting periods on new members with pre-existing conditions and surgeries, except for treating injuries and accidents that could not have been predicted at the time of enrollment.
They also have no limited enrollment periods. You can join a health sharing plan at any time.
How are medical expenses shared among members?
When a healthshare plan member has an eligible medical expense, the healthcare provider submits the bill to the health sharing organization. The organization verifies the sharing eligibility and coordinates the sharing process among community members.
Do health sharing plans cover preventive care?
Healthsharing plans may offer coverage for certain preventive care services, such as annual check-ups, vaccinations, and screenings.
However, coverage may vary depending on the plan.
Can I continue using my current healthcare providers with a health sharing plan?
Health sharing plans typically do not have a formal network of providers.
Members are generally free to choose their preferred healthcare providers without incurring out-of-network penalties. However, it’s essential to confirm this with the specific health sharing plan you choose.
Whitney Kline is a Personal Benefits Manager (PBM) for HSA for America. As a PBM, she helps individuals and small businesses find money-saving alternatives to traditional health insurance – including HSA plans, health sharing programs, DPC memberships, and other innovative solutions.