What is the difference between healthcare sharing plans and commercial health plans?
With open enrollment in full swing, many are looking at their options when it comes to health insurance. Since the Patient Protection and Affordable Care Act (ACA) became law in 2010, most people are able to get comprehensive health insurance through a state health insurance portal or the federal marketplace at Healthcare.gov. Even those with pre-existing conditions are able to find a plan that works for them. Additionally, the ACA created new subsidies that help make health insurance more affordable for many Americans and eliminated lifetime caps on coverage.
ACA health plans are organized by metal tiers, ranging from bronze through platinum. The bronze plans offer more affordable premiums with higher deductibles and out-of-pocket costs and the platinum plans have more expensive premiums with the lowest deductibles and out-of-pocket costs. Gold and silver plans run in between the two as far as premiums and deductibles.
Health Sharing Ministries
Since the passage of the ACA, another option has grown in popularity. Health sharing ministries offer an alternative to “health insurance” by providing a sort of financial shield for families who are willing to share healthcare expenses with other families in order to keep all members’ out-of-pocket costs low.
Both families and individuals can participate by paying a “sharing amount” every month, not unlike a traditional health insurance premium. Participants choose a program that gives them some of the same benefits as traditional health insurance, like out-of-pocket limits, discounts on health care and predictable monthly payments. In most cases, these sharing plans are significantly cheaper than traditional health insurance plans. In fact, many are priced at half the cost or less, including lower deductibles.
On the surface, this may sound like a dream come true, but there are more nuances to consider about health sharing ministries. For one, these types of plans are not held to ACA standards, meaning they can exclude people with pre-existing conditions or who have chronic illness. Additional parameters may be set on these plans that can exclude people who have complex medical histories or certain undesirable habits like smoking or drinking excessively.
These plans are also centered around a group's shared religious or ethical beliefs, which means that many of the benefits are centered around those beliefs as well. That also means that some health care benefits may be considered unnecessary and not offered under these plans. For example, many birth control options are not covered under health sharing ministries even though they are covered and typically free under most ACA plans. Additionally, these plans also want participants to be practicing in the shared belief system and may ask members to agree to a statement of faith upon signing up for the ministry.
The final consideration is that healthcare sharing ministries are able to place either annual or lifetime limits on coverage. If your healthcare costs ever exceed this cap, you will be left to pay the remaining medical costs on your own.
Choosing the right plan for you
Given all the information we listed above, you may wonder how to choose the best plan for your needs. The answer will be different depending on your unique needs and circumstances. The key is to find the right balance of benefits and costs so that you get optimal care without paying too much.
Healthcare sharing ministries may be beneficial if:
You don’t have pre-existing or chronic conditions - If you are young and healthy, you may be able to have some luck with healthcare sharing ministries. If not, you may be out of luck since healthcare sharing ministries may not cover those that have these issues.
You are looking for the most wallet-friendly option - In some cases, ACA plans could be prohibitively expensive. If you’re looking for a healthcare option that is more affordable than what your state or region offers, you may want to consider a healthcare sharing ministry instead.
You don’t have many medical requirements - Things like prescription drugs and other complex medical needs are usually not covered under healthcare sharing ministries. If you take a lot of prescription drugs, you may end up paying a steep amount out-of-pocket.
On the other hand, you may want to stick with a traditional health insurance plan if:
You have complex medical needs - whether you have a pre existing, chronic, or recurring medical condition, you may want to opt for an ACA plan as healthcare sharing ministries will likely not accept you.
You require prescription medication - an ACA plan is the best option to get comprehensive benefits that cover prescription drugs.
You qualify for subsidies with the ACA - If you fall into the bucket of individuals who earn less than 400 percent of the federal poverty limit (FPL), you probably qualify for subsidies and other cost-sharing benefits.
Know all your options
In addition to healthcare sharing ministries and ACA plans, there may be a third option if you live in the Austin, Texas area. Decent offers three different health insurance plans especially designed for the self-employed. All three plans — the Pathfinder Bronze Plan, Lonestar Bronze Plan, and Trailblazer Silver Plan — offer free primary care and run below market rate when it comes to premiums. Each of these plans is considered ACA compliant, so pre-existing conditions are accepted. Premiums that run 20-40% cheaper than traditional plans make these an appealing option for those looking for an option that doesn’t break the bank.
If you want to learn more, get a free quote today.