Christian medical bill-sharing plan constitutes insurance, Kentucky court rules

In the latest of a series of regulatory and legal debates about Christian medical bill-sharing plans, the Supreme Court of Kentucky has ruled that one such plan is in fact insurance and should be regulated as such.

In its 5-2 decision in late August, the state's high court said Medi-Share was offering its members insurance in part because of its method of paying claims. The court focused on the fact that the ministry collected money from members and held it in trust, then paid "needs" -- their term for a member's outstanding medical bills -- out of those trusts after they were deemed eligible.

Stephen Sullivan, general counsel of Medi-Share, said the group plans to ask for a rehearing before the court. For now, Medi-Share continues to operate in every state but Montana. Two similar groups are in all 50 states. If the Kentucky decision stands, the state insurance department could oversee coverage appeals and Medi-Share's financial reserves.

An insurance agent's questions prompted the state attorney general and the Kentucky Dept. of Insurance to scrutinize Medi-Share and then take them to court in 2002, insurance department spokeswoman Ronda Sloan said. A lower court had ruled in Medi-Share's favor.

Insurance regulators who have tried to assert authority over the Christian medical bill-sharing plans often have hit a political wall. In 2008, an Oklahoma state legislator who also was a Medi-Share member sponsored successful legislation that allowed the plans to operate without oversight by the state insurance department.

The bill-sharing plans have members pay monthly fees into a collective pool. Members must agree to abide by a strict behavioral code. The plan is not required to pay for certain types of medical bills, including abortion, drug and alcohol addiction treatment and plastic surgery.

Bill-sharing ministries won a major political battle this year, successfully lobbying for an exemption from the federal health insurance mandate set to take effect in 2014.

"This is a golden nugget nestled into this bill that allows members to practice our faith," said the Rev. Howard Russell, executive director of Barberton, Ohio-based Christian Healthcare Ministries.

The exemption applies only to groups that have operated continuously since 1999 and submit to an annual financial audit available for public inspection. Exempted groups include Medi-Share, operated by Melbourne, Fla.-based Christian Care Ministry; Samaritan Ministries International, based in Peoria, Ill.; and Christian Healthcare Ministries.

Collectively, the groups claim about 43,000 households across the country as members, and all three say membership has grown during the last few months.

It's unclear whether anyone is joining in anticipation of taking advantage of the exemption from the 2014 mandate, but critics say that such a draw could be a problem.

"This could, in essence be a large loophole in the health insurance mandate," said Joel Cantor, ScD, director of the Center for State Health Policy at Rutgers University in New Jersey. "Because of connections to religious groups, it makes it politically dicey."