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As Sharing Health-Care Costs Takes Off, States Warn: It Isn’t Insurance (#GotBitcoin?)

Religious organizations that provide an alternative to health insurance are growing rapidly but remain largely unregulated. As Sharing Health-Care Costs Takes Off, States Warn: It Isn’t Insurance (#GotBitcoin?)

Religious organizations where members help pay each other’s medical bills have grown from niche insurance alternatives to operations bringing in hundreds of millions of dollars, an increase that is also driving more consumer complaints and state scrutiny.

More than a million people have joined the groups, known as health-care sharing ministries, up from an estimated 200,000 before the Affordable Care Act, which granted members an exemption from the law’s penalty for not having health insurance. The organizations generally provide a health-care cost-sharing arrangement among people with similar religious beliefs, and their cost is often far lower than full health insurance.

Consumers typically pay a set monthly amount that goes into a general account or directly to others who have an eligible medical bill. They also submit their own eligible bills to be shared by other members.

As membership swells, more people have complained that their medical bills weren’t paid or were paid months late. Some states said they have seen an increase in complaints filed with regulators. More negative reviews have also appeared online.

Because the ministries aren’t regulated by state insurance commissioners, consumers have little recourse. Many legislatures have passed bills guarding the ministries from state regulation, on the grounds that the state shouldn’t interfere in a religious organization.

Sharing ministries say the uptick in complaints is negligible when compared against the surge in membership. They also say they tell members they aren’t buying insurance and that they have an appeals process for denied claims.

Unlike plans sold on the ACA exchanges, health-care sharing ministries have many limitations. Most don’t cover pre-existing conditions or preventive services such as checkups and mammograms. They don’t cover abortion and most birth control, and typically don’t share bills for mental-health services or addiction treatment. They may have limits on the total amount that will be paid for any treatment.

Millions of dollars are at stake. Among some of the largest ministries, Christian Healthcare Ministries, based in Barberton, Ohio, reported $340 million in revenue in its 2017 tax filing. Liberty HealthShare of Canton, Ohio, saw its total program revenue surge from $6.5 million in 2015 to $65 million in 2017. Samaritan Ministries International of Peoria, Ill., said its members shared $1.2 billion in health-care bills from 2007 through 2017.

Insurance regulators in several states have taken action.

The Nebraska Department of Insurance in 2018 warned that health-care sharing ministries aren’t insurance, aren’t regulated and can’t be forced to pay members’ medical bills.

Last month, Washington’s state insurance commissioner ordered two affiliated entities, Aliera Healthcare Inc. and Trinity HealthShare Inc., to stop sales in the state, saying Trinity wasn’t a legitimate health-care sharing ministry and Aliera’s promotional efforts could mislead consumers into believing the products were insurance.

Mike Kreidler, the Washington insurance commissioner, said his agency is investigating other entities described as health-care sharing ministries.

“There are some other opportunists in the insurance business who are attempting to take advantage of what they perceive as a loophole,” he said.

The insurance regulator in Texas has made similar allegations against Aliera and Trinity, saying they weren’t legitimate sharing ministries and were illegally operating as insurers, while spending a small fraction of customers’ money on health care.

Aliera said it would “vigorously defend against the false claims.” Trinity said it is a bona fide health-care sharing ministry and is contesting the Texas inquiry. A Texas court recently temporarily blocked the state regulator from moving forward. A spokesman for the Texas regulator declined to comment on the court’s action.

The Ohio Attorney General’s office has received 18 complaints this year about Liberty HealthShare. The office declined to comment on whether it is investigating the organization.

“I got the sense they were growing so quickly and they couldn’t keep up,” said Rachel Payne, a 58-year-old fitness trainer and former member in Stone Mountain, Ga., who filed a complaint against Liberty HealthShare over a bill she said wasn’t paid at the time. “The concept is really a great idea, but you have to have a system that works.”

Liberty HealthShare said it reissued a check for Ms. Payne’s bill after she told them it hadn’t been received.

Health-care sharing ministries were relatively small in the 1980s, built on the notion that people should share each other’s burdens. Members pooled money and submitted their own bills for other members to pay. Checks would come in with notes of support and offers of prayer.

When the ACA was written, ministries won the exemption to health-insurance requirements—a carve-out for what at the time were relatively small groups that argued their nonparticipation in health-insurance markets was a matter of religious freedom. The entities also aren’t subject to ACA requirements that apply to insurers, such as covering pre-existing health conditions. That helps to lower their costs.

The exemption and the ministries’ lower costs have propelled growth. Official figures aren’t kept, but Samaritan Ministries says its membership swelled from 57,227 individuals in 2011 to 269,809 people today. Liberty HealthShare says it has 239,000 members.

Many ministries are nonprofits, or are part of religious organizations. They require members to practice a certain religious faith. But some have built membership by welcoming secular consumers. Top executives can command six-figure salaries.

In recent years, some ministries have spent heavily on advertising, offered commissions to brokers and urged small employers to offer sharing ministries to workers. Christian Healthcare Ministries said in its 2017 tax filing that it spent more than $800,000 on advertising and promotion.

“Many have transformed to give the appearance of traditional insurance. As these entities grow, so too do the risks of consumer confusion,” according to a 2018 report by The Commonwealth Fund, which supports research on health-care issues.

Some ministries say they work to make the distinction clear. In marketing and communications, “we constantly try…to make clear that we are not insurance,” said Samaritan Ministries spokesman Anthony Hopp.

Jonathan Horgan of McLean, Va. said in an April 1 complaint with the Ohio Attorney General against Liberty HealthShare that he had paid in $4,200 over six months and requested a reimbursement of $153.60 for a valid service.

“They are over 90 days late,” he said in the complaint. “They do not respond to emails.”

Liberty HealthShare said Mr. Horgan’s submitted expense was renegotiated with his provider to lower the cost and paid by other members in 114 days.

Kristi Celico of Lafayette, Colo. said in an April complaint that she decided to leave Liberty HealthShare and obtain insurance because of problems getting responses from the organization.

“I couldn’t get anyone to answer the phone or respond to an email even about simple questions,” she said in an email.

Liberty HealthShare said Ms. Celico likely was trying to call during a period when its phone system vendor had technical problems. It said it was continually taking steps to improve technology and response time.

“We care deeply about our 239,000 members all across the country, and in 2018 we facilitated the sharing of over $315 million in medical expenses,” said Terrie Ipson, a spokeswoman for Liberty HealthShare. As Sharing Health-Care Costs,As Sharing Health-Care Costs,As Sharing Health-Care Costs,

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