HealthShare vs. health insurance—which option provides better coverage and value for your needs?
While both help cover medical costs, they operate in vastly different ways.
This article will show you how these two health care financing options differ, and help you decide which may be the better option for you and your family.
Are you an employer? Read all about the best health benefits strategies for companies with 2 to 50 employees.
Compare Pricing on the Best Insurance Plans Available
What is Health Insurance?
Most people are already familiar with the basic health insurance concept.
Technically, health insurance is a legally binding contract directly between you and an insurance company. You pay monthly premiums. In exchange, the insurance company agrees to cover specific medical expenses.
Health insurance companies are regulated by state insurance commissioners, and have strict licensing requirements.
Today, the vast majority of health insurance policies in force are also compliant with the Affordable Care Act. This means it complies with the following requirements:
- Essential Health Benefits: Coverage for services like hospitalization, prescription drugs, mental health care, maternity care, and preventive services, among others.
- Protections for Pre-Existing Conditions: Insurance companies cannot deny you coverage or charge you more based on your medical history. The tradeoff: You must enroll during the open-enrollment window (November 1st through January 15th in most states). If you have a qualifying life event, you may also qualify for a 60-day special enrollment period outside that window. This allows you to enroll in a health insurance plan with guaranteed enrollment privileges.
- No Lifetime or Annual Limits on Essential Benefits: Plans cannot impose caps on how much they’ll pay for your essential care during your lifetime or any given year.
- Preventive Care Without Cost-Sharing: Services like vaccinations, annual check-ups, and screenings are covered without requiring a copayment or deductible.
- Affordability Provisions: Plans must limit out-of-pocket costs, such as deductibles and copayments. As of 2025, the maximum allowable annual out-of-pocket cost for ACA-compliant health insurance plans is $9,200 for individual plans, and $18,400 for family coverage.
- Tax deductibility. Premiums for ACA-compliant individual and family plans are generally fully tax-deductible.
Affordable Care Act Subsidies
ACA-compliant (“Obamacare) health insurance plans are eligible for premium tax credit subsidies.
These help make health insurance more affordable to people with low to moderate incomes. You may be eligible for a subsidy if the 2nd lowest-cost “silver” plan in your area is more than approximately 9 percent of your income.
For a more precise estimate of your subsidy eligibility, contact an HSA for America Personal Benefits Manager.
Types of Health Insurance Plans
The vast majority of ACA-compliant health insurance plans available today are managed care plans. That is, they contract with a limited set of doctors, clinics, hospitals, and other providers. These providers bid discounted prices to the plan, in exchange for the prospect of a steady stream of referrals.
In turn, the plan will limit what they will pay for non-emergency care for any out-of-network provider. The plan channels their customers to their preferred network of providers. This makes for lower pricing – but less freedom of choice for patients. You can’t use your full plan benefits with any provider: You must get non-emergency care from an in-network provider.
There are three basic types of managed care plans: health maintenance organizations (HMOs), preferred provider organizations (PPOs) and exclusive provider organizations (EPOs).
Learn More: Understanding HMOs and PPOs in Health Insurance
What is Health Sharing?
Health sharing is an affordable non-insurance alternative that’s rapidly gaining popularity nationwide.
The primary advantages of health sharing over traditional health insurance are cost and greater freedom for patients to choose their own providers.
Health sharing organizations are not-for-profit associations of like-minded people with shared values who band together to share each other’s medical expenses. Everyone contributes to the healthshare plan each month, and the plan facilitates sharing among members who have a healthcare need.
Many health share plans have an explicit religious requirement, but not all. Others are non-denominational associations open to Christians or believers in general, depending on the plan. And many others are completely secular. Each health sharing plan has its own statement of faith or statement of values that all plan members pledge to adhere to upon enrollment.
Health sharing members tend to be more health conscious than the general population at large. They also commit to abstaining from excess alcohol or abusing drugs, which also saves money on healthcare costs.
Learn More: Health Share Plans
Key Features of Health Sharing Plans
1. Lower Monthly Costs
Health sharing costs are typically 40% to 50% lower per month compared to unsubsidized insurance premiums.
For example, a family might pay $300–$500 per month for a health sharing plan compared to $1,000 or more for traditional insurance.
Learn More: How Much Does Health Sharing Save Compared to Health Insurance?
2. Year-Round Enrollment
Health sharing plans allow you to enroll anytime during the year. However, waiting periods may apply if you have pre-existing conditions (see below).
3. Your Choice of Doctor
Most health sharing plans allow you to go to the doctor or hospital of your choice – with no restrictive networks, and no extra charge if you decide to go to the Mayo Clinic or any other prestigious healthcare facility.
4. More Flexibility
Not everyone needs or wants a full set of benefits. For example, if you know you aren’t an alcoholic or drug abuser, there’s no reason to pay extra premiums for inpatient drug addiction benefits.
Traditional health insurance products are required by the ACA to cover inpatient addictions treatment. They must also cover the cost of treating conditions brought about by years of alcohol or drug abuse. But that adds cost, which shows up as higher premiums.
Health share plans don’t need to pay for that. Which helps keep costs down for all health share members.
Health Sharing Considerations
Health sharing isn’t for everybody.
Here are some of the key drawbacks to health sharing:
1. No Subsidies
Health sharing plans don’t qualify for subsidies under the Affordable Care Act.
2. Waiting Periods on Pre-Existing Condition Costs
Health sharing plans have waiting periods of up to several years before they will fully share expenses to treat costs associated with pre-existing conditions. Health insurance, in contrast, must cover costs from the policy effective date.
If you have pre-existing conditions, it may be worth it to purchase a traditional ACA-qualified health insurance policy––even if it costs more.
However, this provision is irrelevant if you don’t have pre-existing conditions.
3. Contributions are not tax deductible
If you don’t get a subsidy under the Affordable Care Act, health sharing typically saves enough to be worthwhile, even without the tax deduction. But it is a factor to consider.
Note: If you’re providing a health sharing benefit to employees, the cost is fully deductible to you as the employer. However, your employees must pay income taxes on any amounts you pay for the health sharing plan on their behalf.
4. No prescription drug insurance
While health sharing plans typically offer steep discounts for prescription drugs, and especially generic drugs, they don’t include a full-fledged prescription drug insurance plan.
HealthShare vs. Health Insurance: Quick Comparison
| Feature | Health Sharing | Health Insurance |
|---|---|---|
| Regulation | Not regulated by ACA or state laws; operates independently | Governed by federal and state laws, including ACA mandates |
| Cost | Lower monthly contributions; higher risk for unshareable expenses | Higher premiums; lower risk due to extensive coverage |
| Risk Pooling | Relies on trust and voluntary contributions among members | Spreads risk across a large insured population |
| Flexibility | Customizable but may exclude certain services or pre-existing conditions | Standardized, comprehensive coverage |
| Religious Requirement | Some health share plans require membership in a given religious community. Some are non-denominational. And others are completely secular. | No religious requirement or component for insured. |
| Eligibility | May require adherence to faith or lifestyle guidelines | No eligibility restrictions based on faith or lifestyle |
| Community Focus | Strong emphasis on mutual support and shared values | Transactional relationship between insurer and insured |
| Prescription Drugs | Typically offer a discount program, but no insurance coverage on prescription drugs | Prescription drug insurance included |
Who Should Choose Health Sharing?
Health sharing works best if you meet some or all of these criteria:
- You are among the millions of families who are left out of the Obamacare subsidy programs.
- You are in good health with no significant pre-existing conditions.
- You don’t currently rely on any expensive prescription drugs.
- You want more freedom to choose your own doctor or hospital.
- You want to save money each month.
- You don’t have access to an employer-subsidized health insurance plan.
- You want to be a part of a community of like-minded people.
- You are outside open enrollment and need some protection against the risk of high medical expenses until at least next year.
- You don’t qualify for Medicaid.
Who Should Choose Traditional Health Insurance?
A traditional ACA-qualified plan may be a better fit for you if you meet these criteria:
- You qualify for a subsidy that makes coverage very affordable for you.
- Your employer provides a good workplace insurance plan and pays at least half the premiums.
- You or any of your family members have one or more pre-existing conditions.
- You don’t mind being restricted to your plan’s network of care providers.
- You are unmarried and pregnant or may become pregnant. (Some health sharing plans restrict maternity benefits to married couples).
- You want or need a full-fledged prescription drug plan. Especially if generic drugs aren’t effective for you and you need a drug still under patent.
Take Our Quiz: Which Health Plan is Best for Me?
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Next Steps: Which Option Is Right for You?
There’s no one-size-fits-all answer.
The best choice depends on your income, health, and risk tolerance.
Our expert PBMs are among the only health benefits brokers who are experts both in traditional ACA-qualified health insurance plans as well as health sharing plans. Consultations are absolutely free. And nobody has better pricing for the plans.
Make an appointment with a Personal Benefits Manager today.
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