Ministries offer bill-sharing as insurance alternative

The programs have come under scrutiny by regulators, courts and legislators.

By Emily Berry — Posted July 7, 2008

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The staying power of Christian medical bill-sharing plans has judges, legislators and regulators asking a philosophical question: Does a plan count as insurance if it doesn't charge premiums or pay claims, yet allows people to contribute to a pool of money they can draw upon to pay medical bills?

The answer to that question might depend upon a reading of state insurance law, whether a state has passed exemptions for religious organizations that pay for medical bills, or even the religious sensibilities of the parties involved.

Backers of these plans say they provide a low-cost alternative to insurance for people who otherwise couldn't get it or afford it. Their detractors say these plans are insurers in sheep's clothing, trying to find a way to shimmy out of state insurance financial and coverage regulations.

Either way, doctors might not know their patients might be participating in these bill-sharing plans, because often the plans are constructed so a physician is paid in cash first, after which the patient's bill is published in a plan's newsletter, with a request for reimbursement. However, sometimes physicians face the same wait for payment as they do for any health plan.

Christian bill-sharing plans aren't new, but have attracted more attention lately because of regulatory and legislative activity, and because the plans are being pitched as an alternative to not being insured -- though they say they're not insurance.

The Cover Florida health reform plan Gov. Charlie Crist signed in May included an amendment exempting faith-based health care programs from state insurance regulation, as long as the group qualifies under federal guidelines as a nonprofit religious organization.

In Oklahoma, the definition of whether Christian bill-sharing plans should be regulated as insurers ended up pitting a state regulator against a prominent state legislator.

In February, Oklahoma Insurance Commissioner Kim Holland made Melbourne, Fla.-based Medi-Share stop accepting new members, though it could pay bills for existing members, after an administrative law judge determined the organization's structure made it an insurer subject to state regulation.

House Speaker Pro Tempore Gus Blackwell, whose family participates in Medi-Share, urged Holland to reconsider while the plan appealed. "I find it inexplicably nauseating that people who come together for a medical co-op, minding their own business, taking care of their members, has been stopped," Blackwell said on the House floor, according to Oklahoma City's Journal Record.

Blackwell was speaking in support not only of the organization, but also on a Oklahoma Senate bill that would provide exemptions allowing Medi-Share to operate mostly as is. "Vote yes, vote your conscience, vote for people who've decided they want to trust God for this," said Blackwell. The bill passed, and was signed by Gov. Brad Henry June 2.

Usually, bill-sharing plan members contribute a predetermined amount each month. When they have a medical bill, they receive monetary help from fellow members. All of the programs are careful to say that they are not promising to pay bills, only facilitating a voluntary sharing.

For example, Medi-Share avoids using insurance terminology: It doesn't charge premiums -- it collects and distributes "shares." It doesn't pay claims -- it publishes "needs."

Members and staff say the monthly contribution for a bill-sharing ministry is more affordable than are traditional health insurance premiums.

Membership in Christian Healthcare Ministries, for example, would cost $450 a month while the average employer-sponsored PPO membership would cost the same family an average of $1,037 every month, according to a 2007 survey published by the Kaiser Family Foundation.

Plan membership is generally limited to Christians who regularly attend church, agree not to use tobacco or illegal drugs, and agree to abstain from sex outside of marriage. The programs won't pay for care deemed contrary to Christian principles, including abortions, cosmetic surgery or treatment for drug addiction.

"I think we are an alternative for folks," said Robert Baldwin, president of Medi-Share's parent, Christian Care Ministry.

Alieta Eck, MD, an internist in Piscataway, N.J., said her practice and her family stopped buying health insurance in 1996 in favor of paying their own medical bills under Christian bill-sharing programs.

"Frankly, it was the money," she said. "And secondly, not being in the same pool as the people who run all the red lights." Dr. Eck also has patients who are part of medical bill-sharing programs.

Don Philgreen, MD, a family physician in Kansas City, Mo., said he sees two families who are enrolled in bill-sharing ministry programs. He said his experiences getting paid on time has been mixed.

"We just bill [those families] like we would anybody else," he said. "They have to submit everything we charge them. It's kind of a hassle and there's a real delay in payment that comes with it."

But the Rev. Howard Russell, executive director of Christian Healthcare Ministries, based in Barberton, Ohio, said the program helps physicians increase their collections. "Our members are technically self-pay, and generally a very high percentage of self-pay patients end up not paying," he said. "One hundred percent of our members pay their bills -- the doctors and providers can be assured they're going to get those bills paid."

State action

Controversy, such as the battle in Oklahoma, is no stranger to Christian bill-sharing plans. Christian Healthcare Ministries was once known as Christian Brotherhood Newsletter, until a scandal -- tipped off to the state attorney general by Russell and another board member -- led to the 2004 ouster of founder the Rev. Bruce Hawthorn and a lawsuit over millions of dollars in misspent funds.

Kentucky already had a law exempting Christian bill-sharing plans from insurance regulation as long as they did not operate like insurance companies. However, the state's insurance commissioner in 2002 issued a cease-and-desist order against Medi-Share for doing just that. Medi-Share appealed, and in 2007 a Kentucky circuit court judge overturned that order. The Kentucky attorney general's office is appealing.

Montana's insurance regulators barred Medi-Share from operating in that state after an investigation following a lawsuit by a pastor who said Medi-Share would not cover the costs of treating a heart condition, which the program claimed was preexisting. (Medi-Share eventually paid his bills, and lost an $835,000 court judgment.)

The state's auditor and insurance commissioner, in court documents, said Medi-Share operated as an insurer because it marketed itself as that kind of organization, despite its disclaimer that not all claims would be paid.

Montana is not the only state to have barred Medi-Share from operating free of regulation. Illinois, Nevada and South Dakota effectively barred the program after courts ruled that it operates as an insurance company.

Oklahoma isn't the first state where regulators have ordered Christian bill-sharing programs to cease, only to have legislators react and approve the programs. Maryland and Wisconsin, for example, had similar experiences in the 1990s.

Baldwin said he expects to have to continue working with regulators to defend Medi-Share.

"There's clearly a mixed record of wins and losses," he said. "Regulators have a hard time grasping the idea that faith can replace a guarantee."

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Program particulars

Christian medical bill-sharing programs go to great lengths to distinguish themselves from traditional health insurance. Some operate more like typical health plans than others. Three of the largest programs have preexisting condition exemptions, deductibles and coverage limits, although exact terms differ between programs.

Christian Care Ministries Inc./Medi-Share

Headquarters: Melbourne, Fla.
Membership: 14,000 households
Availability: 45 states (not available in Illinois, Montana, Nevada, Oklahoma or South Dakota)
How it pays bills: Claims handled by MultiPlan, a New York-based PPO

Samaritan Ministries

Location: Peoria, Ill.
Membership: 12,400 households
Availability: All 50 states
How it pays bills: Members are self-pay patients. Bills are published in a newsletter. Other members respond by sending in their monthly share in a designated amount to a member who needs a bill reimbursed.

Christian Healthcare Ministries

Location: Barberton, Ohio
Membership: 9,000 households
Availability: All 50 states
How it pays bills: Ministry staff call and directly negotiate discounts on members' behalf, then publish the need in a newsletter. Members send a designated monthly amount directly to the person with bills to pay. The recipient pays the physician directly.

Source: Company Web sites and program staff members

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Christian bill-sharing and the law

Lawmakers, regulators and courts in different states have reached conflicting conclusions over whether medical bill-sharing ministries are insurance and should be regulated as such.

June: Following an order in February from Oklahoma Insurance Commissioner Kim Holland that Medi-Share must stop operating, the state Legislature drew up a bill that the company said would allow it to resume operations pending some changes to its financial arrangements. Gov. Brad Henry signed the bill into law.

May: Florida Gov. Charlie Crist signed into law "Cover Florida" legislation, allowing health insurers to offer "bare-bones" policies, and exempting bill-sharing ministries from regulation as health plans. Also, the Nevada insurance commissioner determined that state regulators did not have sufficient evidence to shut down Medi-Share as an unregulated insurer.

January-April 2007: A number of rulings came down that effectively booted Medi-Share out of Montana. In January, a local district judge ruled that Medi-Share, through the use of such devices as health histories and actuarial principles, was indeed selling insurance and was doing so illegally by not registering with the state. In April, another local district judge awarded $835,000 in damages to a minister whose bills for a heart condition weren't covered because Medi-Share claimed he had not disclosed it on his application form. (Medi-Share did pay the bills after the lawsuit was filed.) Later in April, Montana Auditor and Insurance Commissioner John Morrison filed a cease-and-desist order against Medi-Share, which no longer accepts members from that state.

January 2007: A Kentucky circuit judge ruled Medi-Share is not insurance and falls under the state's "statute of exemption" for religious organizations handling financial and medical needs. In 2002, the state's insurance commissioner had ruled Medi-Share did qualify as insurance, and that office is appealing the judge's decision. The appeal was pending as of June 2008.

Source: Medi-Share, court records, legislative records

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