The Top Benefits and Drawbacks to Know About Healthcare Sharing Ministry Plans
By Scott Snider
Continuing with our health care for early retirement blog series, our next featured article discusses a strategy known as Healthcare Sharing Ministry plans.
The main benefits associated with this type of plan include discounts on healthcare, limited out of pocket costs and predictable monthly payments. It should be noted that these plans are not considered insurance. More on this a bit later.
Big picture, Healthcare Sharing Ministry plans are provided by organizations whose members share the costs. There are 2 parts to the monthly cost that a participant pays – 1) the shared amount, and 2) the unshared amount.
The shared amount of the monthly cost operates like insurance premiums, whereas the unshared amount is like a deductible. The unshared amount portion of the cost typically run around $500 for individuals, $1,000 for couples, and up to $5,000 for families. Whereas, the shared portion can range between $64 - $627/month, depending on the coverage selected and plan provider.
Unsurprisingly like the name would indicate, Healthcare Sharing Ministry plans are Christian based. Therefore, one should be aware that coverage may be limited against things that the group morally disagrees with. For example, birth control is typically not covered.
Another common stipulation is that they often require the participant to be actively religious. In addition, these plans do not have to accept individuals with habits they disapprove of, such as drinking or smoking recreational substances.
THINGS TO CONSIDER WHEN DECIDING IF HEALTHCARE MINISTRY PLANS ARE RIGHT FOR YOU
In general, Healthcare Sharing Ministry plans work best for people who:
Are in good health
Ineligible for a substantial tax credit based on income
Lack other options through work
Desire coverage that is only intended to protect against catastrophic events
Unable to afford current health insurance premiums
Some of the flaws associated with healthcare ministry plans include:
Because healthcare sharing is not regulated like insurance, it is not guaranteed and means that consumers have almost no legal protections
Situations where the lack of legal protections might be harmful are when claims go unpaid, coverage gets denied, or the ministry goes bankrupt
A pre-existing condition may disqualify an individual, require the member to pay a higher monthly amount, or negatively affect their payments caps
There are no caps on the amounts you might have to pay for healthcare costs that aren’t covered
USE CAUTION
Given some of the drawbacks discussed above, it’s wise to proceed with a certain level of caution when evaluating whether Healthcare Ministry plans are a good fit for your situation. On the other hand, these types of plans are fairly popular among the Christian faith, as evidenced by the 1.5-million Americans who participate in such plans.
The bottom line is that while for some early retirees this type of plan can be a cost-effective alternative to traditional insurance, it’s important to review the membership requirements before joining to ensure the terms within the plan are aligned with your specific needs.
UP NEXT
Please stay tuned for our next article from our health care for early retiree blog series, where we discuss more in depth planning techniques associated with Employer’s Retiree Group Coverage.
TO LEARN MORE - WATCH THIS VIDEO
For additional guidance about Healthcare Sharing Ministry plans, we recommend watching the following video: Health Insurance Before Medicare. This is a self-help course created by Paragon that is meant to help pre-retirees and retirees better understand common planning issues before the age of 65 in greater detail.
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