Health insurance savings has become high on our priority list the past few years. With Humana pulling out of Texas we have to change our insurance for the third time in three years. I asked around for what other people were using, and my friend Philip Taylor told me about Christian Insurance which has had huge health insurance savings for his family of five.
As a small business owner who works with my wife, we have no access to a company-sponsored health insurance program. We also have twin 3-year-olds (who thankfully have been pretty healthy).
If we want health insurance, we have to write a check every month to cover our family of four.
In 2016 our premiums with Humana were $1,180.14 per month. Not including our $12,000 deductable.In 2015 Blue Cross Blue Sheild of Texas was costing us
In 2015 Blue Cross Blue Sheild of Texas was costing us $1,427.97 per month. With the deductible, our costs were $20,000 in 2015 alone.
In 2014 we were with a different insurance company too.
Each year the insurance company has canceled our insurance. Not because we aren’t healthy – because they are pulling out of our state.
My wife Katie then has to spend 30-40 hours of time finding a new provider and filling out all the paperwork so that we can pay more for worse coverage.
Our healthcare costs have doubled over the past few years. Healthcare costs are one of the big downsides of being in business for yourself.
What if there was an alternative, that could cut your healthcare bills in half? Or by two-thirds?
What is Christian insurance?
Health insurance savings through Christian insurance may be an option for you. It goes by several names:
- Healthcare Sharing
How does healthcare sharing work?
Members share in the cost of each other’s bills.
Each month all members in the Christian insurance service pay into a personal account called your ‘share account’. The funds from all of the accounts are used to pay all of the member’s medical bills each month.
It’s a big pot of money that gets shared among the members. The service adds up all the claims, divides it by the members, and pulls from the shared funds to pay the claims.
Here it is explained again in a little more detail:
- Once a month you (your household) deposits a pre-set amount into a special sharing account. Instead of your employer deducting your healthcare or you writing a check to your insurance company, you send money to the health care sharing organization. The amount varies based on your household size and what coverage limits you pick. But it’s massively less than many other healthcare insurance options and can have substantial health insurance savings.
- The money you put in is called your share.
- If there is another member that has a bill to be paid – say a yearly doctor’s checkup or someone’s 7-year old broke their wrist playing little league baseball and had to go to the emergency room – money from other member’s accounts are used to fund and pay that member’s bill.
- The member then pays the bill out of their account.
- If you have a medical bill, the process works in reverse. Members fund your account with the funds that have accumulated in their shared accounts.
Let’s walk through a real simple example.
- Alan, Bob, and Cindy create their own Healthshare Company.
- Each contributes $100 a month to their share account.
- At the end of six months, each has saved up $600.
- Bob cuts his finger cooking and has to go to the ER and get stitches. The bill is $1,000.
- Bob has $600 in his share account.
- Alan and Cindy chip in $200 each from their share accounts to Bob’s share account.
- Bob now has $1,000 to pay his ER bill.
- The money goes from Bill’s account directly to the doctor or hospital. Bob can’t use it to buy a new set of golf clubs.
What happens when you go to a doctor or hospital?
Just like with regular health insurance, you will show your healthshare ID card. The doctor or hospital bill is submitted to the healthshare service provider.
Once the healthshare service provider receives the bill they negotiate for any potential discounts with the doctor or hospital. Then the healthshare provider publishes the bill to the member community for funding through share accounts.
If you have met your annual household portion (the deduction you choose when you sign up), your bill is published to be funded.
What is the annual household portion?
Organizations that offer these services have an annual household portion that must be met before claims are paid out.
The annual household portion can be thought of like a health insurance deductible.
With regular healthcare insurance, you pay out-of-pocket up until you hit your yearly deductible before the insurance kicks in.
With healthsharing, you pay out of your share account until you hit your annual household portion before other members share in the costs above your portion. Once the annual household portion is met 100% of eligible medical bills can be published for sharing among other members.
Here’s a chart showing the annual household portion options and the monthly share contributions for Christian Care Ministry (Prices current as of October 25, 2016):
When you sign up, you decide how much to contribute to your share account based on your budget and how much you think your annual medical bills will be.
Let’s say you have a family of four and the oldest person in the family is 45 years old. You would pick between the available options listed above.
Your family has a history of being very healthy with very few doctor’s visits during the year.
You could choose an annual household portion of $10,000 with a standard monthly share of $266.00.
Over the course of twelve months, you would pay a total of $266.00 X 12 months, or $3,192 into your sharing account. During the year maybe your family had a few health checkups to the doctor and a couple of visits for runny noses. The doctor charged your healthshare service $2,000. That money would be paid out of your $3,192 balance, dropping your share account balance to $1,192.
Your healthcare costs for the entire year would be $3,192.00.
What if your annual household portion is $10,000 and you have more than $10,000 in medical expenses? You pay up until your annual household portion is met, then your bills are published for sharing.
Here’s how it works:
- You get a healthshare card that you present every time you visit a doctor or hospital, just like you do now with an insurance card.
- The healthcare provider submits the bill to the healthshare service.
- Bills are processed and discounted.
- The healthshare provider bills you for the amount you owe.
- Once you meet the annual household portion you’ve chosen, eligible medical bills are published for sharing.
Let’s compare our healthy family to if you had regular health care insurance that cost you $1,000 month with a $5,000 deductible.
$1,000 X 12 = $12,000 out of pocket plus whatever the insurance won’t cover for your checkups and doctors visits.
With regular healthcare insurance, our healthy family of four pays $12,000 annually plus whatever isn’t covered.
With the health share service, the costs were $2,000 for the doctor’s visits. The family saved $10,000.
You can see the health insurance savings can be substantial.
Some providers offer discounts of up to 20% off your share amounts if you live a healthy lifestyle, as determined by:
- Blood pressure
- Waist size
- Body Mass Index (BMI)
These programs are allowed to discriminate between what they will and will not cover. You have to buy into the lifestyle requirements as well as the faith requirements for the faith-based programs.
You can be turned down to join if you:
- are age 65 or older
- use tobacco in any form
- use illegal drugs
Your claims may be denied to be paid if you or a family member:
- are in a DUI accident
- Call 911, so the ambulance can give you a ride downtown (this happens, my sister is a paramedic and sees this all the time)
- Do something stupid like wrecking your car while drag racing or get shot robbing a 7-Eleven.
That may sound harsh, but Christian insurance is based on Biblical principles. Costs are kept down because members work to live healthy lifestyles and seek medical attention only when it’s necessary.
There are many other stipulations depending on the program. The above list is just a few examples. Coverage can be denied if you do not meet the guidelines of the programs.
Before you consider joining, read the guidelines very carefully.
What are the cons of health share programs?
Sounds too good to be true, right? There some cons as well:
No tax deductions
You don’t get a tax deduction for your contributions. This is not a deal breaker because the health care savings over traditional health insurance can be far more substantial than any tax breaks you would get.
If you have qualifying medical expenses they can be deducted based on the percentages of your Adjusted Gross Income (AGI). You’ll have to run those calculations at tax-time.
No Health Savings Accounts (HSAs)
Health share services are not considered insurance, so there is no ‘deductible’. They don’t qualify for HSAs.
If you have an HSA, you won’t be able to get the tax deduction from funding it. If you have funds in an HSA already, you can still use them for qualifying medical expenses.
Bills ineligible for coverage
Each organization has different guidelines for what they will and will not cover for medical expenses. You need to read the guidelines carefully prior to joining.
Limits on pre-existing conditions
If you have a pre-existing condition and sign up, don’t expect to get your $250,000 medical bills paid for when you sign up.
There are eligibility constraints and caps on the sharing amounts.
If you are six months pregnant and sign-up, you can’t expect to get all of your hospital bills paid.
For example with Liberty Healthshare:
A pre-existing condition is any condition at the time of enrollment that has evidenced symptoms or received treatment or medication in the past 24 months. We share in pre-existing conditions according to the following schedule:
- First year of membership – Not eligible for sharing
- Second year of membership – Up to $25,000 is eligible
- Third year of membership – Up to $50,000 is eligible
- Fourth year and following of continuous membership – the condition is no longer considered pre-existing
Affordable Care Act exemption
The groups that provide this service are exempt from the Affordable Care Act which means you don’t have to pay the penalty if you don’t have health insurance. Health sharing with Christian insurance is much cheaper than health insurance so that you can end up with significant health insurance savings.
And if you have certain beliefs about things you don’t want your dollars supporting under the Affordable Care Act, it might be an option for you.
Say you don’t want to be part of an insurance company that lets men use their insurance to pay for a Peppa The Pig tattoo removal.
Are health sharing services for you?
Regarding the faith-based services, membership is not an option for everyone. With Medi-Share you have to be a Christian and agree to follow the values of the group.
Liberty HealthShare includes families and individuals who profess non-traditional and / or non-evangelical faiths (Catholics, Mormons, unaffiliated, etc.).
This is going to be a big shift in how you think about paying for medical bills. Health sharing is not insurance (even though it’s referred to as Christian insurance). But the health insurance savings can potentially add up to thousands of dollars a year. Review the different programs and see if one might be a good fit for your family.
Here are four healthshare services to check out that provide Christian insurance for health insurance savings: