Tuesday, January 26, 2016

Obamacare Alternatives: Health Care Sharing Ministries

Health Care Sharing Ministries may be an affordable option to an Obamacare plan, in some cases saving 50-60% of premium, but what are they and what is the risk of enrolling?

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Health Care Sharing Ministries plans (HCSMs) are faith based plans for individuals and families.  These plans are considered to be a non-insurance related product.  Most of us are familiar with discount plans featuring savings for dental, vision, hearing and prescription drugs; these plans are not insurance.

When a person signs up for a plan like this, that person  pretty much knows they are signing for discounts and not a comprehensive insurance plan.  A faith based plan, or health care sharing ministry plan as they are also referred to, is not an insurance product.  Instead, is a program where people share in each other’s needs by making payments into a pool of money.  Claims are paid from this money.  As you may surmise, this activity looks and smells like how insurance claims are paid and how premiums are collected.  But faith based plans are not insurance.

The biggest similarity between a HCSM plan and a traditional ObamaCare plan is that by enrolling in one, the Shared Responsibility Payment (aka Penalty!) is waived.  If a family of five with a $150,000 income is charged the Penalty of 2.5%, that is $3,750.  A faith based plan may cost $500 per month, or $6,000 per year.  Why not go ahead and pay the difference of $2,250 and get a plan that pays something as opposed to paying a penalty and getting nothing?

My common sense is asking me if we may be better off making these plans available as opposed to turning away an opportunity to assist a person and to make a dime in the process?  Are agents just as likely to be sued for not telling someone about these plans if they knew they were available as “affordable coverage” but chose not to inform someone?  That someone may get sick and look to sue anybody in a state of despair/desperation.  E&O will not cover an agent for not informing the prospect of this option. So why not go ahead and offer this solution to your clients as an alternative to Obamacare?

-Mike Smith, President 

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