The number of Americans who rely on healthcare-sharing plans, agreements in which people agree to pay for one another's medical bills, has been counted for the first time on a nationwide scale, and it is more significant than previously thought.
Healthcare is a necessity but Americans often have to pay a hefty price to cover their bills. In 2023, the average monthly cost of insurance for an American was approximately $560. Due to the soaring price of insurance, many opt for health care sharing plans.
More than 1.7 million Americans use sharing plans, and many require members to request free treatment before submitting their bills, according to a Colorado Division of Insurance study.
While gathering information from 16 sharing schemes around the United States, the state agency discovered five more programs that kept their data private.
"These plans cover more people than we had previously known," says JoAnn Volk, Georgetown University's co-director of the Center on Health Insurance Reforms.
According to the agreements, members, who often have similar religious beliefs, agree to give money each month to help pay for the medical expenses of other members. In 2021, at least 11 data-sharing programs offered services or promoted plans throughout all 50 states. Sharing plans are not subject to the same regulations and consumer safeguards as health insurance plans and do not guarantee payment for medical services.
Preexisting diseases are not required to be covered under sharing plans, nor are the minimal health benefits provided by the Affordable Care Act. Furthermore, unlike health insurance, sharing programs allow for annual or lifetime payment limitations. A catastrophic health event may readily exceed the limits of a sharing plan.
Nearly one in four Coloradans acquired healthcare coverage in 2021 and engaged in sharing plans in Colorado with at least 67,000 people. The top deputy commissioner of the Colorado Division of Insurance, Kate Harris, raised concern about that rate and claimed that sharing plan participants routinely broach the subject.
"What we hear from consumers is that when they purchase one of these, they do think there is some guarantee of coverage, for the most part, despite the disclaimers on many of the organization's websites," continues Harris.
According to the Colorado study, participants in health-sharing agreements occasionally had to ask for charity care or assistance from medical experts, governments, or consumer advocacy organizations. The costs are then transferred to other public or private health programs.
Per Katy Talento, the executive director of the Alliance of Health Care Sharing Ministries, which represents five of the nation's largest and oldest sharing programs, the approach is comparable to a "soup kitchen." Sharing ministries, according to Talento, promote members acting like the uninsured individuals they are. She says such demands for charitable care demonstrate a commitment to responsibly managing their members' funds.
In 2021, Colorado members of 14 sharing plans reported submitting $362 million in health bills, of which $132 million were granted. Executives from the sharing plan explained to the division that the remaining amount included duplicate invoices, ineligible charges, special reductions, and the members' pre-agreed share of medical expenditures.
"It's not like every claim line on a healthcare sharing request is going to be eligible for sharing," says Talento. "They have to submit the whole bill. They can't just pull out a piece of it."
However, members often need to be made aware of what sharing plans would cover, as evidenced by consumer complaints to the Division of Insurance and consumer support programs like the Colorado Consumer Health Initiative.
Isabel Cruz, the initiative's policy director, says they have witnessed the dangers people run into when they participate in these plans without fully understanding the enormity of the risk they accept for their medical expenses.
Regulators in Colorado and other states have also voiced concerns over brokers receiving significantly bigger fees from health-sharing arrangements than health insurers do for bringing up new customers. If customers are not sufficiently informed about the differences, there may be financial incentives to promote sharing schemes over health insurance.
Colorado officials are also concerned that health-sharing plans could only attract people who have limited plans for medical care. Prices for standard health insurance policies may increase as a result of an increase in sicker, more costly customers.
Harris suggests that many people could get health insurance for less than the price of a sharing plan, especially in light of recent increases in federal and state subsidies. State officials are also attempting to educate the public about the monetary dangers of health-sharing partnerships, some of which have recently gone bankrupt.
Harris concludes that this "might look cheaper on its face, month to month, but if they do really actually need their costs covered, there's a real risk that they may not be."
- Colorado Division of Insurance First Annual Report on Health Care Sharing Plans and Arrangements from Colorado Division of Insurance
- Value Penguin. Average Cost of Health Insurance (2023)
- The Commonwealth Fund. Health Care Sharing Ministries: What Are the Risks to Consumers and Insurance Markets?