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Too good to be true? Obamacare's religious ministries exemption

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The tweets from popular syndicated radio host Ken Coleman were enticing: "Worried about #Obamacare? Don't! Reform your own healthcare with #Medishare. I did, you should."

Coleman, who lists Medi-Share as a sponsor, also tweeted: "My family is immune to #ObamaCare and we are saving money! Join us with #MediShare."

Each tweet contained a link to Medi-Share, a Florida-based nonprofit that bills itself as "Christian Care Medical Sharing." With family plans that start as low as $282 a month, this faith-based cooperative approach to sharing medical expenses promises big savings over traditional health insurance.

Their pitch: Members of Medi-Share and other medical-sharing ministries are exempt from the individual mandate that will be enforced starting in January.

It’s an appealing idea, but critics say it could be a dicey proposition, as medical-sharing ministries aren’t subject to regulation. If bills become overwhelming, they say, the non-profit could flop, and members would be left in the lurch.

Medi-Share points to its record as proof that it works.

Founded in 1993, Medi-Share historically grew at roughly 10 percent a year. Since the Affordable Care Act passed in the 2010, growth has ticked up to 15 percent as some Americans look to end-run the mandate. About 150,000 people are members of medical-sharing ministries, and 60,000 of them belong to Medi-Share, according to chief executive Tony Meggs.

The nonprofit has an edge over entrepreneurs who may want to launch their own ventures: Obamacare requires qualifying health-sharing ministries to have been in operation before Dec. 31, 1999, which gives something of a monopoly to Medi-Share and the two other qualifying organizations, Samaritan Ministries and Christian Healthcare Ministries.

Medi-Share says its coverage works and on its website points to members who have received catastrophic care.
Medi-Share says its coverage works and on its website points to members who have received catastrophic

The ministerial exemption

The little-known exemption was included because of efforts by former Congressmen Tom Perriello, a Virginia Democrat, and Sens. Max Baucus, a Montana Democrat, and Republican Charles Grassley of Iowa. It's the same principle that allows for the Amish to be exempted from the individual mandate—with the crucial difference that it's a lot more practical to join Medi-Share than it is to become Amish.

Members must pledge their Christian faith and promise not to drink, take drugs or have sex outside of a traditional marriage. A reference from a minister may also be requested. Certain pre-existing conditions render applicants ineligible, while chronic issues such as obesity sometimes lead to acceptance into the program contingent on undergoing wellness counseling.

The plan does not include products of "un-Biblical lifestyles," such as contraception or substance rehab, or some preventive medicine, including colonoscopies and annual mammograms. Those policies lead to lower costs for all members.

For those who qualify, Medi-Share boasts that it saves individuals about $945 and families $2,944 per year.  

In a commercial for the plan, a pitchwoman tells a friend complaining about insurance costs: "It isn't insurance; it's a nationwide network of Christians who save money by sharing each other's medical bills. We get to pick our own doctors, and our share is almost 40 percent less than our old premium.”

But critics say customers should be wary.

"The whole goal of health-care reform is to ensure that people are protected against risk and illness, and this violates that fundamental goal," said John Gruber, an MIT economics professor and the director of the health care program at the National Bureau of Economic Research. He also served as a technical consultant to the Obama administration on the Affordable Care Act.

The ministries are not regulated for solvency, said I. Glenn Cohen, a professor at Harvard Law School and co-director of the Petrie-Flom Center for Health Law Policy, Biotechnology and Bioethics. "They can go bankrupt. If it gets too many claims and they can't pay them, [it's] 'too bad, so sad.'"

Meggs sees it another way: "In insurance, you're placing your faith in a company to manage themselves well; you're placing your faith in that regulator to ensure that it's properly reserved—you're placing that faith somewhere," he said. "With health-sharing ministries, you're placing your faith in people just like you."

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Meggs cited Acts 2:44-45: "All the believers were together and had everything in common. Selling their possessions and goods, they gave to anyone as he had need."

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Here’s how it works: A member submits a medical bill to the organization. If it meets the eligibility requirements and annual medical expenses have exceeded the plan threshold, the bill is "shared" — that is, covered.

If a submission is rejected, members may appeal. A randomly selected jury of seven of Medi-Share members will consider the facts of the case and determine whether to cover the expense.

According to Medi-Share, 76 percent of bills submitted were deemed eligible and that all bills deemed eligible for sharing were covered. The organization produces an audited annual report each year and as of June 30, 2012, had net assets of $1.4 million. That works out to less than $25 for each member. Since its founding in 1993, Medi-Share has remained solvent and shared $725 million in medical expenses among its members.

Whether this will be an adequate substitute for health insurance is something that, under current law, consumers will get to decide for themselves.