Healthsharing plans – also known as medical cost-sharing programs – are becoming increasingly popular as a lower-cost alternative to bloated, high-cost traditional health insurance policies. But how much money can Healthsharing save?
The cost savings that healthsharing offers are especially significant for individuals and families in relatively good health who don’t receive a significant subsidy via the Affordable Care Act.
The cost savings can also be tremendous for small employers looking to reduce employee healthcare costs while still offering a quality healthcare benefit to attract and retain the best possible talent.
In this article, we’ll discuss how much money most people stand to save by switching from a traditional Affordable Care Act-qualified policy purchased over your state’s ACA exchange.
Compare Pricing on the Best Healthshare Plans Available
Health Insurance Costs are Out of Control
Individual health insurance costs vary depending on factors like age, income, location, dependents, healthcare use, and policy type. In 2023, the national average monthly premium for an unsubsidized ACA silver plan was $541 for single coverage and $1,362 for a family of three.
Employer-Sponsored Health Insurance Costs
Every year, the Kaiser Family Foundation surveys the costs of employer-sponsored health insurance, measuring trends in the total costs borne by both employers and covered employees and families.
As of 2023, the average employee contribution towards employer-sponsored insurance premiums was $659 per month for self-only coverage, and $1,871 per month for family coverage.
While average premium costs for employer-sponsored individual plans have remained relatively steady, family coverage premiums have increased by 20 percent over the past five years, and 43 percent over the previous decade.
Even with significant health insurance cost sharing by employees, health insurance premiums continue to weigh heavily on employers. On average, employers contributed around $6,500 per year towards individual premiums, and $16,300 towards family premiums as of 2023.
Even with employer-subsidized health insurance costs, workers and their families still face significant out-of-pocket costs in the form of deductibles before the insurance policies they pay high premiums for will begin to pay benefits.
The average deductible for single coverage for workplace plans in 2023 was $1,763. Deductibles for these plans have increased by approximately 13 percent over the past five years, and by a whopping 61 percent over the past decade.
Why are Health Insurance Costs So High?
There are multiple reasons why health insurance premiums have become so unaffordable without significant subsidies to mask the cost:
- The underlying cost of care itself is getting more expensive. Personnel shortages drive up the cost of doctors, nurses, and support staff.
- General inflation also plays a role.
- Today’s “superdrugs” can cost thousands of dollars per dose.
- Hospitals continue to hide pricing and dodge price transparency rules.
Also, health insurance plans are required by law to include many kinds of coverage that most people don’t want or need. For example, traditional insurance plans must cover the cost of drug and alcohol treatment, mental health care, and are increasingly required to cover controversial procedures like sex change operations.
The more types of coverage that politicians force insurance companies to pay for, the higher they drive up premiums.
Additionally, health insurance companies must take on all applicants within the open enrollment or special enrollment periods, regardless of their medical history. This also drives up costs.
How Much Money Can Healthsharing Save?
Healthsharing plans, in contrast, have much more flexibility in plan design. Free from Affordable Care Act and other regulations that force them to pay for coverage that few or no members will actually need, they can reduce costs. But just how much money can Healthsharing save?
For example, health sharing plans frequently limit or exclude costs related to alcohol or drug addiction treatment, gender reassignment surgery, elective abortions, maternity care for unwed mothers, and injuries arising from drunk driving incidents – even as a passenger.
Healthshare plans also limit adverse selection by imposing waiting periods before costs related to treatment of pre-existing conditions become shareable.
They also frequently impose a waiting period before they will share costs for surgeries except for those arising from accidental and unforeseeable accidents.
Healthsharing: A Better Risk Pool = Lower Costs
Unlike traditional health insurance plans, which must accept everyone who applies during an open or special enrollment period and can pay the initial premium, healthsharing plans can be selective about who they take on.
Medical cost-sharing organizations typically require members to affirm that they live healthy lifestyles, do not drink to excess or abuse drugs, and do not engage in risky or irresponsible behavior that would drive up costs for other members.
Many healthsharing plans are faith-based, and only accept members who attend religious services regularly and/or agree to live their lives according to Biblical principles.
These factors all combine to allow healthsharing organizations to allow membership at a significantly lower cost compared to the unsubsidized cost of a traditional health insurance plan.
How Much Money Can Healthsharing Save You?
If you are in good health with no significant pre-existing conditions, and you don’t get a significant subsidy via the Affordable Care Act, switching to a healthsharing plan can save you thousands of dollars per year.
Typically, healthsharing plans save members 30 to 40 percent compared to the monthly cost of an unsubsidized traditional health insurance policy for an individual or small family purchased via your state’s ACA exchange.
According to the Kaiser Family Foundation, the cost of an individual self-only ACA-qualified health insurance plan was $541 per month before subsidies.
The cost of an ACA-qualified health insurance plan covering a family was $1,362.
In contrast, multiple health sharing plans offer similar cost-sharing benefits for less than $350 for individuals, and less than $750 for families.
Additional Benefits of Healthsharing
Unlike most ACA-qualified plans sold on the Exchanges, which are primarily HMOs and PPOs, healthsharing plans do not require you to get non-emergency care from your providers.
This means you can use your healthsharing benefits with any provider you choose.
Additionally, because you are technically uninsured as a healthsharing organization member, you can often qualify for a special cash pay or discount at many providers.
When you get care, ask your provider for the best available cash discount payor.
Most healthsharing plans provide a concierge service that can help you locate providers that offer the best possible value, and can help you negotiate competitive pricing for medical procedures in advance.
All these things help contribute to the overall lower cost of healthsharing organizations versus traditional health insurance.
Medical Cost Sharing Considerations
Healthsharing isn’t a good match for everyone. And there are important things to consider in a health care plan besides price/premiums.
For example, if you have pre-existing conditions or ongoing medical care needs, healthshare plans may limit sharing for those visits and medical services for up to three years.
Most healthsharing organizations don’t provide direct coverage of prescription drugs. Instead, they negotiate deep discounts on commonly-prescribed generic drugs for their members.
If you currently rely on an expensive drug, you should see whether that drug is listed under that plan’s discount program and what the costs may be.
Also, if you’re currently pregnant, or single and expect to become pregnant, some healthshare plans may exclude or limit maternity benefits. This would be a significant factor for you to consider.
In all cases, you should carefully read the healthsharing plan guidelines and understand what costs are shareable and under what circumstances, and what costs are excluded.
Healthsharing for Small Business Owners
Healthsharing can be a powerful money-saving option for small business owners currently paying outsized premiums for a traditional group insurance plan.
Under the Affordable Care Act, employers with fewer than 50 full-time employees are not required to offer a full-fledged traditional group insurance plan. Instead, you can elect to provide a lower-cost healthsharing plan to employees.
Where to Learn More
Healthsharing is an exciting and innovative development in healthcare financing that is saving hundreds of thousands of families nationwide significant amounts of money in medical costs and premiums.
You can click here to read more about these money-saving cost sharing plans, and even enroll online in just minutes.
Here are some additional articles on healthsharing programs: Do Health Sharing Plans Work for Businesses? | Best Healthshare Plans Comparison Guide 2024 | Why You Should Use Independent Doctors? | Escape From Narrow Care Networks: How You Can Finally Choose Your Own Doctor
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.