LEAVENWORTH — Nathan Maxwell and his family have been beset by health care bills, but he said they are grateful they don’t have traditional health insurance.
Instead they’re members of Samaritan Ministries’ “health care sharing” plan, a nationwide program that links Christians who agree to pay one another’s health care bills.
So far, the Maxwell family has amassed more than $200,000 in medical bills due to two problem pregnancies, but Nathan Maxwell said enough money has been collected through Samaritan to pay their expenses.
Samaritan’s plan is straightforward: Members with medical bills over $300 send them to the non-profit organization. The staff there then instructs other members to send their monthly payments (they aren’t called premiums) directly to a fellow member who has been determined to have qualifying medical bills. Members send checks worth between $99 and $320, depending on the plan they are enrolled in. They also pay a $170 annual fee to Samaritan, and are encouraged to send additional donations to members.
The faith-based health care sharing does not work like an insurance policy. Samaritan doesn’t pool risks or build reserves to pay for claims. There’s no guarantee or legal pledge that members will actually be covered when they need it most. Members simply have faith that others in the network will respond with help once hospital bills arrive.
After all, there is the biblical injunction found in Galatians 6:2 — “Carry each other’s burdens and so fulfill the law of Christ.”
Not for everyone
While based on Christian tenets, such sharing plans are not open to everyone. To be accepted, applicants must attend church regularly, cannot be gay or have extramarital sex. Nor are those accepted who smoke, abuse drugs or alcohol. Sometimes applicants must have a pastor attest that they meet the requirements.
Because of the strict rules and the possibility bills won’t be fully covered, health care sharing plans are not for everybody, Maxwell said.
“It’s definitely outside the box,” he said. “You know there’s no guarantees with it.”
Maxwell said he’s happy with his sharing plan, but wouldn’t recommend it to just anyone.
For example, it can require a lot of organizing of bills from dozens of providers, some of which are sent multiple times or in error. And, he said, many health care providers make it difficult to receive care in the first place without proof of insurance.
“Sometimes you’re treated as a second-class patient because you’re paying cash for care,” he said.
Though committed to the concept of the sharing plan, he said he’s worried it wouldn’t remain viable if health care costs continue to go up at the pace of recent years.
“Health care costs could rise so high for everyone that even an organization like Samaritan can’t keep up,” he said. “So yes, I do worry that we may not be covered at all.”
Hospital bills and blessings
Maxwell and his family are among about 1,300 Samaritan members in Kansas. The plan has about 57,000 members nationwide.
According to the Alliance of Health Care Sharing Ministries, there are more than 100,000 people in the United States who participate in a faith-based health care sharing plan, contributing some $60 million a year through various organizations.
The Maxwells said they joined Samaritan after they married eight years ago, in part because the $320 monthly cost was a fraction of what insurance premiums would have been had they converted Nathan’s individual HMO into a family plan.
Equally important, Maxwell said, was that health care sharing allowed them to “act according to our beliefs.”
He said they didn’t want to send money to a company that covers abortions or pay into an insurance pool that enabled people to live unhealthy lifestyles.
“Somebody that would, you know, not be managing their diabetes correctly and being hospitalized over and over,” he said. “ I don’t want my money to help fund that. That can sound selfish, but I didn’t like the idea of enabling people that way. I’m a big fan of personal responsibility.”
For Maxwell, that meant being willing to pay out of pocket for his family’s routine health care. Other Samaritan members only step in to help pay for large, unmanageable expenses, he said.
The Maxwell’s experience with unmanageable bills began during the first of his wife Melanie’s two premature deliveries. The first baby was born several weeks early and lived just three days. The cost of the stay in the neonatal intensive care unit was more than $100,000.
“It was a tough time for us. Grieving the loss of our little girl, to have the cards start showing up was just amazing for us,” Nathan Maxwell said, referring to the payments and well wishes received from other Samaritan members.
“You get some that are just checks, but we received sympathy cards…an array of different cards, hand-written notes saying they were praying for us,” he said. “When you’re talking that much money, the cards would arrive in the mail almost by the fistful. We loved sitting down and reading them — it really was a blessing.”
Health care sharing groups are not regulated by the Kansas Insurance Department.
In 2008, Kansas became one of 12 states to explicitly exempt the plans from standard regulation, provided they adhere to certain basic rules.
Insurance Commissioner Sandy Praeger said to be exempt, the plans must: • explicitly warn members that they may never receive any payments, • cannot pool risk, and • cannot accept “all comers” — that is, they must require each applicant to meet the same religion-based standards.
Praeger said the membership requirement will be particularly important as federal health reform is implemented because the law exempts participants in health sharing groups from the individual mandate that, starting in 2014, will require virtually everyone who can afford it to purchase health insurance. To obtain that exemption, persons must be members of sharing plans that have been in continuous operation since 1999.
Despite the language limiting who can qualify for the exemption, Praeger said she has heard of start-up sharing plans who may be using the prospect of an exemption from the individual mandate to entice consumers to sign up.
“There have been ads that say ‘If you don’t want to participate, if you want to be exempt from the individual mandate, then you can join one of these (health care sharing) groups and be exempt from the penalties. I think that’s probably a stretch,” she said. “The groups who have been in existence since 1999 are probably not going to engage in this kind of misleading behavior. Those would be new entities trying to capitalize on the misinformation that’s out there.”
But even Samaritan — which has been in business since 1994 —received a cease-and-desist letter in April from Washington Insurance Commissioner Mike Kreidler, who was concerned members would mistakenly think the group guaranteed coverage of medical bills.
“What I’m afraid of…is that you open the door to a Ponzi-type scheme and illegal activity from which we have no authority to step in and protect consumers,” Kreidler told Kaiser Health News.
Praeger said she wasn’t aware of any complaints about health care sharing plans being received by her department. But she said people have called asking about them.
She said as long as prospective members understand the risks and join for the right reasons, health care sharing could be a good match for some people.
“Anything that gets people to focus on personal responsibility and wellness is good,” Praeger said. “It’s putting into practice what the religious beliefs are, which is that they’re helping each other. It’s an interesting concept.”
Heath care sharing in practice
Some $4 million is sent between Samaritan members each month, officials said.
Even so, James Lansberry, a Samaritan vice president, acknowledged there have been months when the organization hasn’t been able to cover all the members’ health care costs.
“We have months that we do,” fall short, Lansberry said. “Health care costs are rising for everyone and we’re not immune to that.”
When there is a shortfall, he said, Samaritan determines what portion of all bills they can cover. Lansberry said in the costliest month, member payments still have been able to cover 80 percent of full costs.
“If there’s a shortfall like that three consecutive months, the members vote on whether or not they want the share to go up,” he said. “It’s a member-led organization, so they vote on that and three-fifths have to approve a share increase.”
Shares have increased six times in the organization’s 17-year history. The last time was 13 months ago. Before that share costs hadn’t increased for 30 months.
Lansberry said Samaritan members tend to be self-employed, live mostly in rural areas and, “share the values of being responsible and living healthy lifestyles.”
“One of the other reasons that our health care costs tend to stay lower than society at large is because our model is patient-centered. The members choose their own doctors, they see the bills, they’re engaged in the health care costs and decisions,” he said. “The individual patient is the only person who can really control costs.”
Nonetheless, he said Samaritan’s 65-person headquarters staff spends a lot of time on the phone negotiating lower rates with health care providers. They’re often successful in negotiating a price, “that’s a little closer to what they’d accept from a major insurance company,” Lansberry said.
“We average 30 to 40 percent (reduction) on those bills we negotiate,” he said.
Calling providers about each hospital bill also serves as a check against duplicate claims or fraud. Lansberry said Samaritan has documented two cases of fraud since 1994.
Another sharing model
Another model of health care sharing is Medi-Share. With 41,000 members nationwide — and 1,162 in Kansas — it’s the second largest group in the country.
Instead of sending payments directly to other members, Medi-Share members deposit payments into an account in their own name, from which plan administrators are authorized to make withdrawals to pay for other members’ medical bills. When members decide to stop participating, they can withdraw the money remaining in the account.
Medi-Share President Tony Meggs said a little more than 1 percent of members leave each month but that membership growth has outpaced attrition.
Meggs said Medi-Share has “always been able to cover members’ eligible hospital bills,” in part because the rates are adjusted as medical costs increase. He said current rates average $170 per month for an individual and $282 for a family. He said the last rate change was two years ago.
In general, he said Medi-Share members tend to be middle-class entrepreneurs or small business owners who otherwise would be in the individual market for health insurance.
“Our members…are often looking for A) something that’s more economical — that fits their budget — or B) fits their values or beliefs,” Meggs said.
“The concept of faith-based health care sharing starts with the idea that we have a group of people who have a common set of values. Key to those values is the fact that everyone’s agreeing to live out a biblical lifestyle. With that, it seems to eliminate some lifestyle choices that drive the high cost of health care in the market,” he said.