This story is the first in our Compromised Coverage series, where we explore insurance plans and alternatives and the problems that come with them.
Healthcare sharing arrangements (HCSAs) are built on a premise that, at first glance, might sound like health insurance: You pay a monthly fee and pool your money with like-minded people to pay each other’s medical bills.
Many of these HCSAs are Christian nonprofits known as healthcare sharing ministries. Members—who often must abide by a code of conduct—join to “support each other as the early Christians in the Book of Acts joined together to meet each other’s needs,” the Alliance of Health Care Sharing Ministries shares on its website.
The reality is less simple.
While healthcare sharing ministries may offer lower up-front costs than traditional insurance, they don’t typically cover as much. HCSAs are not health insurance plans and are not required to comply with the protections offered by the Affordable Care Act.
An October 1 report from the Colorado Department of Regulatory Agencies’s Division of Insurance, the state’s insurance regulator, sheds some light on HCSAs’ practices and prevalence.
Little data available. Since October 2022, Colorado has required HCSAs with members in the state to report annual data such as member guidelines, enrollment numbers, money collected, and money reimbursed for care.
At least 30 states have safe harbor laws that exempt nonprofit health ministries from state insurance regulation. No other state but Colorado requires HCSAs to make this data public.
Colorado’s annual report is one of the rare comprehensive sources of public data available about this niche method of paying for healthcare costs.
New findings. The report found that in 2023, at least 1,521,668 people were members of 17 HCSAs nationwide, including at least 62,461 members residing in Colorado. That’s just the ones that reported data to the state, however: The Alliance of Health Care Sharing Ministries states on its website that there are more than 100 total.
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Only 12 HCSAs reported financial information. One called United Health Share Ministries requested its information be kept private in the report. The 11 that reported their finances publicly collected about $39.5 million from members.
Finicky finances. Members of the 11 publicly reporting HCSAs submitted about $96.2 million in healthcare costs in 2023.
But not all those costs were eligible for reimbursement: Some HCSAs exclude things like contraception coverage, maternity care, ADHD treatment, vaccinations, mental health treatment, and diabetic medications/supplies, the report said. In addition, 12 of the arrangements require members to “pursue other payment options” like commercial insurance, crowdfunding, or grants before submitting costs for sharing, according to the report.
After accounting for duplicate charges, ineligible charges, discounts, and other factors, about $58.6 million of Colorado participants’ total healthcare costs were found eligible for sharing.
Of that amount, HCSAs paid out about $34.3 million to Colorado-based members by the end of the year. The amount of member payment that went to administrative and program expenses varied by plan, from under 10% to over 80%, per the report.
Making comparisons. It’s difficult to determine exactly what percent of total care HCSAs covered.
The report noted that actual healthcare costs for members were “likely different” when taking into account factors such as ineligible care that wasn’t submitted for reimbursement and each HCSA’s varying “annual unshared amount” that members need to pay before becoming eligible for sharing (similar to a deductible on a marketplace health plan).
That being said, using the $58.6 million figure, the $34.3 million payout works out to be about 58% of covered expenses after the annual unshared amount. Meanwhile, marketplace insurance can have higher monthly payments, but these plans typically foot the bill for between 60% and 90% of covered expenses after an enrollee meets their deductible, according to healthcare.gov.