“Over a four year period, we paid out $112,000 toward medical expenses,” wrote 56-year-old Mary Smith, whose real name will not be used for the sake of anonymity, in an email to The Politic. “We simply couldn’t do it any longer, we were going broke!

Although generally healthy and free of chronic illnesses, Smith and her family hit their out-of-pocket maximum every year between 2012 and 2015 solely due to unexpected expenses. On one occasion, Smith tore her knee on a ski trip. The next year, her daughter contracted acute pancreatitis. As the bills racked up, Smith’s employer coverage under Anthem Blue Cross, which cost 1,700 dollars per month and had a 13,000-dollar deductible, became unaffordable.

The Smiths are an upper middle-class family in the suburbs of Denver living on a combined annual income of 150,000 dollars, though they consider themselves “slightly poor,” according to Mary, who is one of fewer than 25 employees at the local business where she works. She and her husband, a small business owner, support two adult children living at home—affordable housing in the area is scarce—and they pay their daughter’s college tuition. They have not taken a vacation in years and do not anticipate that they will have saved enough within the next ten years to be able to retire.

In 2017, the Smiths feverishly researched insurance alternatives, but their age and income bracket limited their options. In their desperation, they came across a healthcare sharing plan offered by Medi-Share, a faith-based nonprofit that distributes healthcare costs among its members. Through the ministry, Smith could choose the monthly premium that suited her needs and budget. Four hundred and sixteen dollars a month with an annual 5,000-dollar deductible was a welcome relief.

***

Galatians 6:2, quoted on the ministry Altrua HealthShare’s website, reads, “Carry each other’s burdens, and in this way you will fulfill the law of Christ.”

In the U.S., opinion is divided over whether the free market or the government should control healthcare costs. Conventional wisdom in a capitalist economy holds that the government tends to be less efficient than the private sector, and its services more expensive. But Americans face higher costs than Canadians, Swedes, the French, whose governments fund public healthcare.

The Smiths joined over a million other Americans who have abandoned insurance plans in favor of healthcare sharing ministries. When The Washington Post reported on healthcare sharing ministries in 2005, they were still referred to as “church plans” in the insurance industry, and only an estimated 120,000 Americans—mostly in the South—claimed membership in fewer than a dozen nonprofit faith-based healthcare sharing organizations. Now, though official statistics do not exist, nonprofit groups that offer ministry plans report that over 1.1 million Americans depend on each other to pay for their medical bills.

In the late 1980s, healthcare sharing ministries began operating under a simple premise: people who share similar religious beliefs could also share each other’s medical expenses.

Some of the more traditionalist ministries like Samaritan Ministries International require written confirmation from a priest or pastor that a new applicant regularly attends church services. At Florida-based Christian Care Ministry, applicants must sign a statement of faith that commits ministry members to Christian lifestyles. Members are asked to avoid “food, behaviors or habits that produce sickness or disease,” like smoking and drinking.

In its Statement of Standards, Altrua Healthshare says that its members believe that “marriage is a bond between a man and a woman,” that “sexual relations outside the bond of marriage are morally wrong,” and that “abortion is wrong except in a life-threatening situation to the mother.” Members should not expect the ministries to cover expenses associated with IUDs or pregnancies out of wedlock.

But in general, with ministry membership exploding nationwide, members are bound together less by faith and more by their practical need for affordable healthcare. A particularly attractive aspect of healthcare sharing is that members are exempt from Obamacare’s individual mandate tax penalties. Under the Affordable Care Act, ministries must qualify as nonprofit organizations and must have existed since December 31, 1999 in order for their members to receive tax benefits. Ministries that do not meet these qualifications can instead offer to pay the tax penalties incurred by members.

Fifty-four-year-old life insurance agent Patrick Cloutier is a practicing Catholic subscribed to Liberty HealthShare’s Mennonite “Complete” plan. He does not recall needing to affirm his religion when he first signed up for ministry coverage.  

“Religion was a non-factor for me,” Cloutier said in an interview with The Politic. “The big factor for me was the economics. I was going from paying 1,900 dollars a month down to paying 299 a month. I could pick my own doctors, and the Liberty HealthShare Complete is the only one of these plans that offers one million per incident.”

Similarly, faith had little to do with 64-year-old Maury Radin’s decision to purchase a ministry plan through Aliera Healthcare. While he was required to sign a contract of shared beliefs, Radin said that the principles were “broad and universal” and could be applied across religious faiths and values. He and his wife—both healthy individuals—are just a year away from Medicare eligibility and found healthcare sharing out of frustration with insurance companies’ soaring premiums. But had he been able to afford the rising costs, Radin said he would have stayed with insurance just to support Obamacare.

“I didn’t [choose health sharing] to avoid the individual mandate,” Radin said. “I, frankly, am a big supporter of the Affordable Care Act and universal healthcare.”

With insurance, the Radins were paying 1,800 dollars per month for healthcare. Now, they spend 860 dollars per month.

***

“The means by which [ministries] pay medical bills varies,” POLITICO healthcare reporter Paul Demko said in an interview with The Politic. “In most instances, people send in a monthly fee—what you would call a premium in medical insurance parlance, but they don’t use that term. The ministry collects those dollars, and then once people have medical bills that they need covered, they will allocate money.”

Under at least one plan offered by the Florida-based nonprofit Medi-Share, Demko said, ministry members send checks directly to other participants.

The healthcare sharing ministries avoid using industry jargon because, fundamentally, they are not insurance agencies and do not calculate risk. Wiley Long, president of HSA for America—an online health insurance agency that brokers hundreds of plans from major healthcare sharing organizations like AlieraCare and Altrua as well as insurance companies—said that the ministries have to be upfront about the drawbacks of healthcare sharing in order to avoid running into lawsuits.

Customers should make no mistake: most healthcare sharing ministries do not offer protection for pre-existing conditions or cancer. Nor do they cover emergency room expenses or prescription medication. There is no guarantee they will cover medical bills in full.

While they do have many features in common with insurance companies, including direct negotiations with healthcare providers over reimbursement rates, Demko said some nonprofit co-op plans had been terminated by states for failing to price their products correctly. Should there be an unexpected rush of particularly expensive patients, there is no way for a ministry to guarantee that it will have enough money on hand to pay for all—or any—of the claims it receives.

Cloutier explained that the cap on benefits for most ministry plans is around 125,000 dollars per incident. “If I have a stroke or for the grace of God I could get cancer tomorrow, those will eat up 125,000 dollars in no time. That’s a really big risk.

Typically, insurance is heavily regulated, particularly by state insurance commissioners. But in the case of healthcare sharing ministries, there is no state or federal oversight.

In states like Kentucky, Maryland, and Wisconsin, legislators have passed specific regulatory exemptions for ministry plans as long as they make it clear that they are not insurance. But commissioners are concerned that consumers may not fully understand the limits of healthcare sharing coverage.  According to the Center on Health Insurance Reform, by 2013, 21 states had passed laws allowing ministries to escape regulation because they were considered faith-based alternatives. As ministries relax the religious requirements of their mission, legislators may need to reexamine the immunity they have given the healthcare sharing industry.

***

Healthcare sharing ministries have existed largely under the radar of both Democrats and Republicans, attracting more consumers than expected when Obamacare was instituted in 2010. While it is difficult to unpack their rationale eight years later, Demko said that legislators crafting the Affordable Care Act apparently exempted the ministry plans from the individual mandate penalty in an effort to placate Christian conservatives.

I don’t think anybody foresaw at that time that they would grow more than eight fold over the ensuing eight years,” Demko said. “It was really an afterthought; it got no attention at the time as a provision in the Senate bill…Because of the very tortured way in which the ACA was passed, the Senate version of the bill ended up being the bill that was enacted.”

Demko added that the House version had not included the provision exempting healthcare sharing plans. Had the bill gone to a conference committee, as is typically the case when two different versions of a bill are presented, there was “no way on Earth” the exemption would have survived, a former Senate staffer told him.

Because ministry members are expected to be relatively healthy, the proliferation of healthcare sharing plans has significant consequences for Obamacare’s exchange market, exacerbating the challenge it faced from the outset: attracting enough young, healthy people to create balanced risk pools and avoid high premiums.

Even now, with more than one million members relying on the ministries for coverage, Demko has not heard of any movement from Democrats or Republicans to limit the plans’ proliferation. This March, Representative Mike Kelly (R-PA) introduced a bipartisan bill that encourages ministry enrollees to pay for their plans with health savings accounts.

In many ways, healthcare sharing suits the Republican predilection for giving Americans a variety of coverage options in the insurance marketplace. The current administration has committed itself to loosening the rules around selling cheaper, skinnier insurance plans that do not adhere to the coverage requirements of the Affordable Care Act.

But Americans are already taking those sorts of risks with healthcare sharing. Opting for ministry plans is less about avoiding penalties and more about lowering overall costs. On average, Long’s clients see their monthly medical expenses cut in half, even if they lack the protections of insurance. Having some coverage is better than having none, the reasoning goes, regardless of what’s in the fine print.

“It seems every aspect of our healthcare system is broken, from the astronomical cost of insurance, medical services, prescription drugs [to] the need for charitable services,” Smith wrote.

Cloutier said, “If your decisions are based on economics, which mine clearly were to a large extent, then that’s going to remain the case into the future. The situation is the boss.”