If you’re looking into health insurance options, you may be experiencing some sticker shock. Perhaps you’re thinking about a healthcare ministry instead.
Insurance vs. Healthcare Ministry
Healthcare ministries are NOT health insurance. As a result, you may not have any type of legal recourse should you experience difficulties with your plan. Although, we have certainly heard horror stories about health insurance as well. There are many loopholes that carrier’s can try to exploit and dealing with customer service can be a nightmare! This is why we really recommend working with a broker. A broker can help ensure that you get the right plan for your needs to ensure that you have appropriate coverage at a price point that works for you. Additionally, a broker will work as a liaison on your behalf to make sure you understand the terms of your plan and can very often assist should there be any issues down the line.
Insurance requires you to pay a monthly premium in return for set copays or coinsurance as dictated by the terms of the plan. You may have to meet an out of pocket deductible but after that your plan should detail the costs of services. These costs, of course, depend upon your plan and carrier and whether your doctor or hospital is in or out of network. All plans must have an out of pocket maximum which should protect you in case you incur large medical bills.
Healthcare ministries are NOT insurance. Basically, you and a group of people contribute a small amount of money on a monthly basis. This money is pooled together and held for when a member is in need. Depending on the terms of your “plan” you may be able to be reimbursed for a portion of certain medical expenses after you have paid.
There can be major issues with this type of arrangement. Some people have reported great success and major cost savings with these types of plans. However, there are nightmare stories as well. Because they are not actually insurance plans, they’re not something we recommend, but as always please do your own independent research to determine what is right for you.
The first drawback of healthcare ministries is eligibility. Under the ACA, you cannot be denied or charged more for any preexisting conditions. This is not the case with healthcare ministries. For example someone with diabetes could be charged more on a monthly basis. A child with cancer could be denied outright.
Additionally, eligibility can be affected by your personal religious beliefs. If you don’t share or practice the same religion as dictated by your healthcare ministry, you may be denied.
Morality Clauses/Essential Benefits
Under the ACA, there are certain essential benefits which must be covered by an insurance plan. This is not the case with healthcare ministries. For example, very often treatment for substance addiction will not be covered because it violates the plan’s “morality clause”. Unfortunately it can go even further than that.
A ministry can refuse to reimburse you because they feel that the medical needs violate their morality clause. In all honesty, perhaps you agree with these terms. However, because these terms are not clearly defined in any type of contract, you may find yourself denied for reimbursement. Ambiguity in finances and healthcare is far from ideal.
Pay upfront/negotiate down, hope to be reimbursed
Another major issue is how payments are issued. First, you negotiate a cash payment with the doctor or hospital. Then you submit your receipts or bills to your plan and await reimbursement. This can be problematic.
- Your reimbursement could be denied based on what we’ve discussed already
- Paying upfront could be a financial hardship.
- If you wait, your bill may end up going to collections while you wait for your plan to reimburse you which can be extremely unpleasant.
No regulation regarding how payments are used
Finally, there is much less regulation than insurance. ACA plans have the 80/20 rule. So at least 80% of your monthly premiums must go towards paying healthcare costs. No such rules exist with healthcare ministries so most of your money could be going towards marketing or administration which could explain the difficulty in getting reimbursed.
What to Choose?
Whether you go with a marketplace plan or STM or a catastrophic coverage plan or a healthcare ministry, please do your research. There are wonderful plans and carriers and there are definitely unscrupulous ones out there and you don’t want to expose yourself financially to major medical bills.
f you have any questions or concerns, please feel free to give us a call at (888) 918-0518 or schedule a call today. Our services are 100% FREE!
Jesse Smedley is the Principal Broker for iHealthBrokers and the founder, president, and CEO of Smedley Insurance Group, Inc. and iHealthBrokers.com. Since the inception of SIG in 2007, Jesse has been dedicated to helping people save money on their health insurance by providing them with resources to educate themselves on all their health insurance options, both under age 65 and Medicare beneficiaries. He is featured in many publications as well as writes regularly for expert columns regarding health insurance and Medicare.