Understanding Health Sharing Plans as Alternatives to Health Insurance

If you’re searching for a way to ease medical costs without having insurance, you may have stumbled upon health sharing plans. 

Health sharing companies tout themselves as a cost-saving solution to traditional health insurance with a more communal focus. Though it’s true they often are less expensive than traditional insurance, are they really worth it? To answer that question, we did the research and read the fine print. We’ll help you decide whether or not a health sharing company is a good choice for you or your family.  

What Are Health Sharing Plans? 

First, what even are health sharing plans? A health sharing plan, also known as a health care sharing ministry, is a program where participants voluntarily share medical costs. They’ve been around for a while but have increased in popularity since the Affordable Care Act. 

Once in the program, you pay a monthly amount. Then you can submit your medical bills to be “shared” by the group. These programs often have Christian-leanings, so people in them may have to agree to certain values or lifestyle rules to sign up. 

It’s also important to recognize what health sharing is not — it is not insurance. Unlike traditional health insurance, a health share company is under no legal obligation to cover your health care costs. You are the one legally responsible to pay for all medical expenses. In theory, you can share these costs with your health sharing program. But know the legal responsibility is ultimately yours.

How Do Health Sharing Plans Work? 

These programs work similarly to traditional insurance in some ways (again, remember it’s not actually insurance). You’ll have a set monthly amount you pay for the right to “share” medical costs and a set amount you’ll be required to pay of your own medical costs before any bills are allowed to be shared (similar to a deductible). 

When you have a medical expense, you submit a request for the program to cover it. If it’s approved, the amount is covered by the monthly premiums of other participants. Depending on the company, you’ll most likely have to pay the expense out-of-pocket first and then receive a reimbursement for that amount after it’s approved. 

Like most health insurance, health sharing companies have a list of preferred providers for you when you’re looking for care. These providers will often have less expensive, contracted rates. 

Unlike traditional insurance, some health sharing plans require you to pay the monthly “donation” for several months before your coverage begins. And several have annual or lifetime limits on medical expenses per person.

Pros and Cons of Health Sharing Plans

Health sharing plans tend to be cheaper than traditional insurance, but it’s important to know what you’re signing up for. Each company and plan will have different specifics, but here are the basic trends. 

Pros 

• Lower monthly premiums 
• Companies are nonprofits 
• Nationwide coverage
• Employment status doesn’t affect coverage 
• Regulated by the IRS and state attorney general 
• Sometimes offers less traditional coverage like adoption or funeral expenses or holistic practitioners 
• Sense of community 

Cons 

• No legal guarantee of payment 
• Must submit expenses for reimbursement 
• Generally declines pre-existing illnesses 
• Limited or absent prescription coverage
• Can have lifetime, annual or illness-specific caps 
• Limited mental health or behavioral health coverage 

One reason health sharing plans can keep premiums low is because they control who uses their program. Unlike traditional insurance, which is required to accept everyone regardless of pre-existing conditions thanks to the Affordable Care Act, health sharing companies can turn people away. That allows them to have a pool of basically healthy people and thus fewer medical expenses. The upside of this is price. The downside is you might get turned away. (Do note: some programs allow pre-existing conditions but may require you to pay additional costs.)

Health sharing companies also have some limits on what they choose to cover. For some, this is a plus as you avoid paying for things you might be morally opposed to. Others might find this coverage lacking. Similarly, many healthshares don’t cover preventive care like traditional health insurance. You might end up paying for vaccines or well-child visits.  

While this might not be a deal breaker, it’s still important to go into the program understanding its coverage and its limits. For example, most programs have limited prescription coverage. On the flipside, sometimes health sharing programs offer additional financial help for things that traditional health insurance does not, like funeral expenses or holistic practitioners.

Risks Involved

With most health sharing plans, you’ll be responsible to submit your receipts for reimbursement. This sometimes means paying for your medical expenses yourself and then waiting for a reimbursement check. In the past, many health sharing plans have been slow to send reimbursement checks (a stressful wait for major expenses). However, many companies are working on limiting their reimbursement window to 30 to 60 days. 

Many people like that health sharing plans also come with a sense of community. Because you are sharing your money with other people, you know where your monthly fees are going and often receive notes in the mail that others are praying for you. 

The main downside with health sharing plans is the risk of no guarantee of payment. However, these programs have functioned for a long time with many people using them, so the numbers speak for themselves. As long as you understand the limits and that it is not actually insurance, it can still be a good financial option. It’s also certainly better than no medical coverage.

Who Can Consider a Health Sharing Plan and Who Should Avoid it? 

Health sharing plans really aren’t for everyone. In fact, they’re specifically designed for people in good health who are committed to living a healthy lifestyle. This includes avoiding drugs and limiting alcohol consumption. It may also be a good choice for you if you already belong to a specific faith and follow the lifestyle rules required by the health share. There is still risk, but the financial benefits may outweigh that. 

You should avoid health shares if you have complicated chronic health needs or take prescription drugs often. You’ll also want to avoid it if you or your family need behavioral or mental health services, as most plans offer no coverage in those areas. Health shares can also be stressful if you struggle with waiting. While health shares are more than willing to reimburse you for covered expenses, it can sometimes be a lengthy wait before the check arrives.  

Alternatives to Health Sharing Companies 

If a health sharing plan didn’t stack up the way you wanted, there are still ways to save on health insurance. Be warned that most of these can only be applied during the open enrollment period. But it’s worth knowing so you can plan ahead. 

1.High Deductible Plan from Employer 

Employer-backed health insurance is often your cheapest bet for quality health insurance. This is particularly true if they offer a high deductible plan. A high deductible plan normally has a low monthly premium and high deductible (duh!) and out-of-pocket max. At first glance, the high deductible plan can look expensive with such high limits, but if you’re healthy, it’s often the most affordable option. 

2. Health Insurance Discounts/Programs from Employer 

If you have health insurance through your employer, call your company’s insurance representative to understand if there are discounts or incentive programs. For example, some companies offer as much as 50% off monthly premiums if you pass a health evaluation. Others will allow you to earn money during the year through health incentives like tracking daily exercise to cover monthly premiums. Not all companies offer these programs, but it’s worth asking.  

3. Health Insurance Marketplace 

If your employer insurance is expensive, you aren’t offered any or you’re self employed, look at the open market for insurance. Healthcare.gov is a great place to get started. You simply enter your information, and it will generate any plans available to you along with their monthly price. You can also get help from government insurance brokers. These brokers are employed by the government and therefore don’t receive commission from one specific company; their one job is to find you the best insurance for your needs. They are also often very knowledgeable of any discounts you might be eligible for depending on your income. 

4. Health Insurance Broker 

Health insurance brokers act as a go-between for consumers and health insurance companies. They are licensed and know their stuff when it comes to insurance. Because of this, they can often help you find the best deal while helping you understand your coverage. Just know most brokers earn commissions from insurance companies when you sign up, so they may be inclined to recommend one company more than another regardless of best fit for you. 

5. Medicare or Medicaid 

This option is last because it only applies to certain groups of people. If it does apply to your situation, it’s a life saver. Medicare is a national program that provides affordable health insurance for people 65 or older while Medicaid is for low-income people regardless of age. Medicaid requirements differ from state to state, so depending on where you live, it might be an option for you. If it is, check out your state’s Medicaid agency to apply. 

Frequently Asked Questions(FAQs) about Health Sharing Plans

Contributor Whitney Hansen covers banking, credit cards and investing for The SS. She also writes on other personal finance topics.