Submitted by Pam Deaton, PD Benefits
In the face of rising healthcare costs and complex insurance options, many Americans are turning to health sharing plans as an alternative to traditional health insurance. Health sharing plans, often run by religious or non-profit organizations, allow members to contribute monthly dues into a collective pool, which is then used to pay for one another’s medical expenses. While these plans can offer significant savings and a sense of community, they also come with considerable risks and limitations. Understanding both the advantages and drawbacks is essential to deciding whether a health sharing plan is the right choice.
Pros of Health Sharing Plans
- Lower Monthly Costs
One of the primary draws of health sharing plans is affordability. Monthly contributions are often significantly lower than premiums for traditional insurance plans, especially those purchased through the Affordable Care Act (ACA) marketplace. For individuals or families who are generally healthy and rarely visit the doctor, this cost difference can be substantial.
- Flexibility in Providers
Unlike many insurance networks, which restrict members to specific doctors and hospitals, most health sharing ministries allow members to see the providers of their choice. This flexibility can be a major advantage for people who have established relationships with specific doctors or specialists.
- Shared Values and Community Support
Many health sharing plans are based on religious or ethical principles. Members often find comfort and solidarity in being part of a like-minded community. In some cases, members offer additional personal support, such as prayer or encouragement, during medical crises.
- Less Bureaucracy
Health sharing plans typically involve less paperwork and fewer administrative hurdles than traditional insurance. This can simplify the process of submitting medical expenses and receiving reimbursements.
Cons of Health Sharing Plans
- Not Insurance
It’s crucial to understand that health sharing plans are not legally recognized as health insurance. As a result, they are not bound by the same regulations and consumer protections. There is no legal guarantee that your medical bills will be paid, even if they meet the plan’s guidelines.
- Limited Coverage
Most health sharing plans do not cover pre-existing conditions for a set period, if at all. They may also exclude certain treatments, such as mental health services, maternity care for unwed mothers, or preventive screenings. Members must carefully review the plan’s guidelines to avoid unexpected costs.
- No ACA Protections
Since health sharing plans are not compliant with the ACA, they do not include essential health benefits required by law. They also do not cap out-of-pocket expenses or protect against annual and lifetime coverage limits. This could expose members to significant financial risk if they suffer a major illness or injury.
- Religious or Lifestyle Restrictions
Many health sharing plans require members to adhere to specific religious or moral standards, such as abstaining from tobacco, alcohol, or premarital sex. While these values may align with some individuals’ beliefs, they can be exclusionary or impractical for others.
Are Health Sharing Plans a Good Option?
Health sharing plans can be a viable option for certain people—but not for everyone. They may be a good fit for:
- Healthy individuals or families who rarely need medical care and want to save on monthly costs.
- Self-employed or gig workers who do not have access to employer-sponsored insurance and find ACA premiums unaffordable.
- People of faith who value a faith-based approach to healthcare and are comfortable with the plan’s religious requirements.
However, those with chronic conditions, ongoing medical needs, or who require comprehensive coverage would likely be better served by traditional insurance. It’s also important to note that many hospitals and providers may be unfamiliar with health sharing plans, potentially leading to confusion or delays in payment.
Health sharing plans offer an alternative path in an often-overwhelming healthcare landscape. They can provide real savings and community for some, but the trade-offs in coverage and financial security must not be underestimated. Before choosing a health sharing plan, individuals should thoroughly research the organization, read the fine print, and assess their own medical needs and risk tolerance. For the right person, it can be a helpful tool—but it is no substitute for the safety net that traditional insurance provides.
The smart thing to do is work with a health insurance professional who can explain—in plain English—everything about all the different options available, hook you up with the perfect plan that fits just right for you so you aren’t paying for things you don’t really need or taking a huge risk of not being covered for things that you do need.
For information on any health insurance, including Medicare and Health Sharing plans, call Pam Deaton at 309-287-3518 or visit her online at www.pamdeaton.com. PD Benefits is located at 202 South Eldorado Road, Suite B2, in Bloomington, Illinois. There is no charge for Pam’s services. She works with many different insurance companies to help you review all your options and select the right insurance solution for your budget and specific family needs.