There are many options available for consumers who are buying health coverage. Because the options are so different, it is important to know what you are buying, what it covers and how it works. Additionally, because not all plans are considered insurance, it is important to know who to turn to for help if something goes wrong. The North Carolina Department of Insurance is here to help you understand your options. Give us a call at 855-408-1212.
Health Care Sharing Ministries
Health Care Sharing Ministry (HCSM) plans are NOT insurance. HCSMs have been in existence for more than a century but have had increasing consumer interest over the past two decades.
- A HCSM offers consumers an option for health coverage but it is not health insurance
- Members who join a HCSM do not receive a guarantee that their health care bills will be paid in exchange for a premium, but rather agree to “share” the health care costs of the other members on a voluntary basis
- Members who join a HCSM must also agree to the faith statement of the organization
How they work: People who join an HCSM will typically pay a “membership fee” and some administrative fees. These may vary depending on the organization. The organization will review the medical costs or “needs” that are submitted and may match members directly to each other or pool the money and send the money directly to the person in need. There is typically some process to know when your monthly contribution has been matched to an eligible need. There may be a dollar limit for the eligible need and if the cost of the medical service exceeds that limit, the excess costs are your responsibility. There is never a guarantee of payment on any eligible need.
It is important to know that the North Carolina Department of Insurance does not regulate these organizations as they are exempt from insurance regulation. Why is that? It’s because these organizations fall under an exception in state law that allows for them to operate outside of state regulation if they meet the exception requirements. In general, these organizations must:
- Maintain non-profit status
- Limit their membership to those who share similar interests
- Provide for the financial or medical needs of members through contributions from one member to another according to the organization’s criteria
- Provides amounts that members may contribute while assuming no risk or promise to pay among the members or a promise to pay by the HCSM to the members
- Publishes a monthly written statement that all members have access to that lists the total dollar amount of the qualified medical needs submitted to the HCSM as well as the amount published or assigned to the members for their contribution
- Provides a written disclaimer that specifically states that the organization is not an insurance company and that it is voluntary whether anyone chooses to assist you with your medical bills. The notice also must state that regardless of whether you receive payments, that you are personally liable for payment of your own medical bills
When considering an HCSM, you may see some similarities to an insurance plan:
- They may issue a member card that is similar in looks to an insurance card
- They may use a provider network that requires you to choose specific doctors for your medical needs to be eligible for sharing. However, if the organization does not work with a provider network the costs for the medical service may not be subject to a discounted rate
- They may label their levels of coverage with names that sound similar to insurance products, such as “Catastrophic”, “Gold”, “Silver” or “Bronze”
- They may also send a claim statement that is called an Explanation of your Benefits
- HCSM plans may even be sold by insurance agents
It is important to keep in mind that this is not an insurance plan even if there are similarities. Because of the similarities to insurance plans, there is a risk that a consumer may buy a HCSM plan believing it to be insurance or that it works like insurance.
There are very distinct differences with an HCSM as well:
- Because it is not a major medical insurance plan, medical expenses for pre-existing conditions may not be eligible for sharing
- There may also be exclusions for health services that are considered “not eligible” as it relates to the faith statement
- It is also important to understand that because it is not an insurance plan, North Carolina’s insurance consumer protection laws and the Department will be unable to assist on a consumer complaint
- Most importantly, there is no guarantee of payment on a claim
While HCSMs may not be insurance, they may meet the needs of some consumers. The North Carolina Department of Insurance encourages anyone who is considering the purchase of an HCSM to read the plan guidelines so that they fully understand:
- What their responsibilities are
- What is covered and what is not
- Whether there is a waiting period for certain kinds of services
- How the organization operates in terms of payments and shared costs
- Whether you share the beliefs of the organization and are willing to accept the conditions on which sharing decisions are made
If you are considering the purchasing a HCSM, or any health coverage, take the time to fully understand the plan you are interested in. Know how it works and ask questions! You can use this checklist to help you know the right questions to ask. The Department’s Consumer Services Division is available to assist you if you have questions at 855-408-1212.