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Growing in a loophole

"Growing in a loophole" Continued...

Issue: "Surviving Syria," June 1, 2013

“From the spiritual side, it strikes me that we ought to be showing a better way to the world,” said David Madeira, who hosts a morning talk show in Scranton, Pa. “The world is wrestling with this issue of how do we cover healthcare, how do we pay for things?”

A company that hosted Madeira’s health savings account informed him in 2010 that, because of the impact of the new healthcare law, it would no longer be offering his HSA. Madeira signed his family up with Samaritan (they had been members in previous years), which covered $15,000 in medical bills when Madeira and his daughter flipped over a go-kart in 2011.

He vividly remembers the accident: “I’m hanging upside down. I can smell and feel the cold gasoline running down my back. … And I look down and my arm has two elbows.”

Today his arm has one elbow and an 8-inch titanium rod.

In addition to being a radio host, Madeira works for Infinity Concepts, a branding and public relations firm near Pittsburgh. Samaritan executives are in talks with Infinity about how to manage their unprecedented growth.

The three organizations don’t attribute all their growth to the healthcare law, but to rising insurance premiums and a renewed interest among Christians in meeting one another’s medical needs. All three groups require members to sign a Christian statement of faith, abstain from tobacco and illegal drugs, and live by biblical principles such as abstinence from extramarital sex. “Usually when unbelievers hear about it, they’re a little miffed that they don’t have access to it,” says Madeira.

The executives from the three ministries are optimistic about growth but admit they can’t predict the future. Until Obamacare is fully implemented, they won’t know all the rules and dynamics of the new health insurance market. They could lose some lower-income members who decide to switch to a government-subsidized insurance policy.

Although states could potentially pose problems for healthcare sharing ministries through various regulations, many have passed friendly “safe harbor” laws giving legal recognition to such groups. Earlier this year Kentucky shut down Medi-Share in the state after a decade-long dispute, but legislators have worked out a resolution (see sidebar below).

The ministries don’t see any upper limit to the membership growth their sharing models could handle. Russell of CHM said growth would simply be “a matter of having the number of employees necessary to serve the number of members.”

Growth seems inevitable: Enrollment in the state insurance exchanges will begin in October, and the penalty for not having insurance will begin next year, motivating the uninsured to seek individual health policies. According to a March study by the Society of Actuaries, an Illinois group that calculates insurance risks, by 2017 the number of people with individual insurance plans will more than double, to nearly 26 million. Meanwhile, claims costs for that group could rise by a third.

Instead of getting insurance, though, many people could jump through the loophole and become healthcare sharing ministry members.

Bluegrass tangle

Medi-Share’s run-in with regulators prompted the Kentucky legislature to act

By Ken Walker

Anderson family
Handout
Anderson family

When a new Kentucky law takes effect this summer, it should end a decade-long legal battle that earlier this year forced 300 families in the state to suspend or abandon their membership in Medi-Share, a healthcare sharing program serving more than 56,000 Americans (including me).

Louisville pastor Darin Anderson’s family was one of those affected. Anderson, 37, left traditional insurance in 2011 to join Medi-Share, a move that lowered his family’s $1,100 monthly premiums to $500. The family also paid a lower family deductible than Anthem Blue Cross and Blue Shield’s fee of $2,500.

With his evangelical church picking up the cost of their health coverage, the move made a lot of financial sense in a congregation of about 100 people, where every penny counts.

“In 2012 they carried $6,000 of our expenses and still paid less than when we were at Anthem,” said Anderson, whose medical bills last year amounted to more than $10,000 after his youngest son had a serious seizure and another son broke two bones.

In January, though, Medi-Share temporarily ceased operations in Kentucky after Christian Care Ministry (CCM), the Florida-based organization running the program, lost a legal dispute with state insurance regulators. The cutoff affected more than 750 people, including the Andersons, who chose to switch their membership to Samaritan Ministries.

“I consider it a government intrusion,” Anderson said of the state’s involvement. “In my mind, a Christian nonprofit is much different than a multimillion-dollar insurance company. It baffles me.”

A primary sticking point with state regulators was Medi-Share’s past method of using a trust account to process members’ medical bills. (In contrast, regulators ruled Samaritan legal because members directly reimburse each other.)

Although Medi-Share amended its system in 2009 by establishing electronic bank accounts to facilitate direct payments between members, the state continued to press its case. It took involvement from the Kentucky legislature to reinstate the program. During this year’s session that concluded March 25, lawmakers overwhelmingly passed a clarification of Kentucky’s “safe harbor” statute, verifying that sharing ministries could operate without fear of violating insurance rules.

Chief sponsor, Kentucky Sen. Tom Buford, said messages from panicked pregnant women and a couple planning to move across the state line so they could remain in Medi-Share prompted him to act.

“We have Baptist, Catholic and Amish groups who do the same thing,” said the Nicholasville Republican, who estimated more than 3,000 state residents share medical bills. “If the state wanted to take them on, they could have shut them down too.” 

Buford’s bill will take effect June 25. Meanwhile, Medi-Share is waiting to meet with state insurance officials to discuss resuming Kentucky operations. Once it secures final approval, Anderson intends to return to the organization.

For the most part, states seem willing to allow sharing ministries to operate without interference. Nearly half already have safe harbor provisions, and other states are considering them, said former CCM president Robert Baldwin, who temporarily rejoined the organization as national policy director to resolve the Kentucky dispute.

Baldwin pointed out that in over 19 years Medi-Share paid more than $26 million of Kentuckians’ medical bills and had only two complaints filed against it—from hospitals that said they should have been paid faster.

Daniel James Devine
Daniel James Devine

Daniel is a reporter for WORLD who covers science, technology, and other topics in the Midwest from his home base in Indiana. Follow Daniel on Twitter @DanJamDevine.

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