As medicine and health practices have gotten more advanced, so has the cost of services. Thus, the world began to find easier ways to pay for health, especially for those of the middle and lower class. This was how the idea that brought forth health insurance and consequently health sharing began. As the years have gone by it has grown into a multimillion dollar enterprise.
The model for both insurance and health sharing is really similar; first, you pay an amount for the month, and then based on what tier of payment you are, your medical burden is covered up to a certain point. Most times, these medical bill covering schemes are structured in such a way that the higher you pay monthly, the more medical bills are covered by the insurance.
In the coming headings and paragraphs, we will delve into two particular types of insurance— the traditional insurance and Medi-Share (which mimics insurance but is a healthcare sharing platform). We would look at pricing, features, services rendered, and more to analyze the differences and similarities carefully, so you can answer the age-long question of which is better.
Why is health important?
Health is important because it makes us feel better about ourselves, live longer, gives our organs a better fighting chance, and improves our overall well-being. Being healthy ensures that we are able to perform optimally. It also ensures that we live a productive life and give back to the society we find ourselves in. Health is essential, which means having a medical sharing program or traditional health care is very important.
What is Medi-Share?
Medi-Share is a healthcare sharing program based on faith. What happens is that people from different places pay a monthly share to a central platform, and then, if they ever need to pay for any medical bill, Medi-Share pays for it. How they “pay” for the medical expense is by sharing the cost with other members of the platform. However, Medi-Share is technically not insurance even though it qualifies as one under the Affordable Care Act (ACA).
Medi-Share started in 1993; its primary function has been to help medical care from a Christian community they care about. Medi-Share started as a small nonprofit organization, but it really blew up when the Affordable Care Act was passed in 2010, and people started migrating to it. Now it has more than 400,000 members and is used by 1000 churches. And has steadily started growing and is now legal in every state of the United States.
Medishare is legal in all states in the United States. However, there are specific state-level disclosures in Pennsylvania, Kentucky, Illinois, Maryland, Texas, Wisconsin, Kansas, Missouri, and Maine.
One of the major things that stand out for Medi-Share is the fact that for one to become part of the program, they must testify that they believe in Jesus. Medishare applicants can’t use tobacco or take illicit drugs.
What is health insurance?
Health insurance is a form of contract between the insurer and the insured. The insured pays the insurer a particular amount in the form of a premium, and then the insurer covers their medical and surgical fees as well as prescription drugs as stipulated in the contract.
Sometimes health insurance would give back the insured money for any expense they spent because of an illness. Most times, health insurance comes as a job incentive with your premiums most times covered by your employer by being removed from your pay.
Additionally, health insurance comes at different levels. You will be required to pay more as a premium to cover more medical expenses. But if you do not need to cover more medical expenses you may not need an increase in premium. The important thing is to find the one that works best for you and your pocket. Health insurance companies include Medicaid, Cigna, UnitedHealth Group, Aetna, Tricare, CareSource, Blue Cross Blue Shield Association, and Humana.
How is Medi-Share more affordable than traditional insurance?
One of the significant ways that Medi-Share is more affordable is how they calculate monthly payments. For Medi-Share, they require you to pay an extra $80 monthly if you have a preexisting condition, and they don’t accept people who do illicit drugs, smoke, etc., reducing their risk pool. Thus, compared to traditional insurance, the monthly share is a lot less because their underwriting process is easier and more efficient.
On the flip side, traditional health insurance accepts everyone at the same price, thus making their underwriting process a lot more complex and expensive. Therefore, raising their monthly payments (premiums) more when compared with Medi-Share.
Similarities between Medi-Share and traditional health insurance companies
There are a lot of similarities between Medi-Share, and traditional insurance. One of the most prominent beings is that they both act like health insurance and are under the Affordable Care Act. This act aims to make it compulsory for everyone to be under a health coverage program. Medi-Share and other traditional health insurance like Humana meet the requirements for a health coverage program. Thus, you will not pay any penalty if you are under any of these.
Also, even though Medi-Share is not directly tax deductible like traditional health insurance, they also have deductible amounts called the Annual Household Portion. This Annual Household Portion is the amount you pay from your pocket before your Medi-Share coverage kicks in. Thus, traditional health insurance and Medi-Share share similarities in deductibles.
Another similarity between both of them is the healthcare provider network. Both Medi-Share and traditional health insurance have a network of doctors or PPO (Preferred Provider Organization) where you will get more affordable rates and would make your medical bill coverage a lot easier. Some out-of-network providers won’t accept Medi-Share as payments, and some traditional health insurance would not agree to cover out-of-network providers. It is always better to use the providers given to you by Medi-Share or your traditional health insurance to avoid situations like this.
Additionally, both Medi-Share and traditional have monthly payments. However, for Medi-Share it is called a “monthly share,” and for conventional health insurance, it is called a premium. Although they mean the exact same thing the distinction is given so one doesn’t confuse Medi-Share as an insurance.
There are also co-payments for Medi-Share and traditional health insurance companies. Copayments refer to the amount you, as an insured person, pay for services that are covered. They usually come up in medical situations like visits to the doctors, lab tests, and prescription refills.
The main differences between Medi-Share and traditional health insurance companies
Faith: Firstly, we will start with the most obvious difference being that for one to use Medi-Share, they have to be a Christian and live by biblical standards, but for one to use traditional health insurance, their faith does not matter at all.
Coinsurance: For Medi-Share, there is no coinsurance, and this is in direct contradiction to traditional health insurance. For traditional insurance, once you hit your deductible, you and your insurer would have to pay a percentage of your medical bill till you hit the limit of your out-of-pocket expenses. While in Medi-Share, when you finish your Annual Household Portion, your Medi-Share kicks in, and you won’t pay for anything that’s covered.
Pre-existing conditions: Another significant difference is the limitations that Medi-Share places on its users with pre-existing conditions. For instance, if you were pregnant before you got Medi-Share, there will be a phase-in period before Medi-Share can cover you. However, traditional health insurance will not deny you coverage in any manner, even if you had the condition before you got it.
Preventive care: Usually, anything that falls under preventive care, such as immunizations, vaccinations, and routine physicals, is covered by traditional health insurance. However, this is not the same with Medi-Share, as you will have to pay for the preventive care out of your pocket with no extra help.
Signing up: For traditional health insurance, there can be specific deadlines or enrolment limitations to hit, but for Medi-Share, there is none.
Out-of-pocket limits: There is no out-of-pocket limit for Medi-Share because there is already an Annual Household Portion, which is the amount you must pay by yourself before you can share your expense with Medi-Share. However, there is an out-of-pocket limit for traditional health insurance, as we explained under coinsurance.
HSA: For traditional health insurance, you can use your Health Savings Account to make tax-advantaged medical savings. But for Medi-Share, that isn’t possible.
Routine expenses: Even though Medi-Share covers a lot of routine procedures, it doesn’t cover as much as most traditional health insurance.
Mental and Sexual Health: Medi-Share does not cover mental health, substance abuse, or STD/STI that are not gotten from marriage. This can be cumbersome, especially if you struggle with mental health issues. So, do well to do your research to know what precisely Medi-Share covers and what they don’t.
Tax Credit: You can apply Federal Tax Credit to traditional health insurance, but you cannot use it for Medi-Share.
Language and Terms: A key difference between traditional health insurance and Medi-Share is the language used to describe the same thing. For instance, deductibles in traditional health insurance are called Annual Household Portion on Medi-Share. These words are different because it makes it clearer to understand that.
Finally, it is important to note that Medi-Share is not a contractually binding agreement like traditional health insurance. And also that, Medi-Share is a nonprofit, while traditional health insurance is for profit.
Medi-Share vs. health insurance rates
We have made it quite clear that Medi-Share is generally cheaper than traditional insurance due to the fact that they don’t charge the same for every person and condition. And also, they reduce their risk and liability pool because they don’t always cover people with substance abuse and mental issues.
Therefore, to have an idea of what the payment plans for both would look like wwould be comparing the monthly rates between Medi-Share and some traditional health insurance using different age health groups.
- For a single 26-year-old person
At an AHP of $12000, they will pay a monthly share of $120
At an AHP of $9000, they will pay a monthly share of $160
At an AHP of $6000, they will pay a monthly share of $215
At an AHP of $3000, they will pay a monthly share of $246
However, if they are using traditional health insurance such as Blue Cross Blue Shield, they will pay around $519 with a deductible of around $5,500 and an out-of-pocket minimum of $7,700.
- For a married 40-something-year-old couple without a child.
At an AHP of $12000, they will pay a monthly share of $230
At an AHP of $9000, they will pay a monthly share of $315
At an AHP of $6000, they will pay a monthly share of $396
At an AHP of $3000, they will pay a monthly share of $530
However, if they use traditional health insurance such as CareSource, they will pay around $1,299 with a deductible of around $4,000 and an out-of-pocket minimum of $13,100.
- For a married couple of 40-something with around three children
At an AHP of $12000, they will pay a monthly share of $331
At an AHP of $9000, they will pay a monthly share of $475
At an AHP of $6000, they will pay a monthly share of $609
At an AHP of $3000, they will pay a monthly share of $830
However, if they use traditional health insurance such as Blue Cross Blue Shield, they will pay around $2,220 with a deductible of around $3,760 and an out-of-pocket minimum of $17,000.
- For a couple around 60 years old
At an AHP of $12000, they will pay a monthly share of $340
At an AHP of $9000, they will pay a monthly share of $485
At an AHP of $6000, they will pay a monthly share of $610
At an AHP of $3000, they will pay a monthly share of $749
However, if they use traditional health insurance such as CareSource, they will pay around $2,800 monthly with a deductible of around $4,000 and an out-of-pocket minimum of $13,100.
From everything we can see here, it is clear that Medi-Share is cheaper than traditional health insurance.
Note that Medi-Share monthly rate can be even cheaper because you can get a 15-20% discount if you meet the Medi-Share healthy standard, which is calculated by measuring BMI, blood pressure, and waist measurement.
Can you use an HRA with a Medi-Share?
The easy answer is no, you can’t use HRA with a Medi-Share. This is because of the IRS guidelines that state only health insurance premiums can be reimbursed through the Health Reimbursement Arrangements. This is according to US Code 213, which is what determines what kind of payments can be reimbursed with an HRA.
Medi-Share is not offered by a health insurance company but instead falls under health sharing ministry programs. Thus, as per the stipulations of the IRS, Medi-Share cannot be reimbursed through HRA.
Notwithstanding, if you use Medi-Share, you can still use an HRA account, but it will not be possible to make tax-free contributions.
Benefits of health sharing
Even though certain restrictions come with using a health sharing program, there are still countless benefits that come from it.
Affordability: When compared to all its traditional health insurance counterparts, it is way more affordable. One of the main reasons is that it is made specifically for people who don’t want to spend too much on insurance. It is because of this that the monthly costs are also way cheaper, more flexible to personal demands and have more discounts.
Tailored Programs: Because health sharing is made for people who do not want to spend too much on insurance, they have a wide range of programs tailored to their specific needs. This way, there is a lot that you can choose from whether you are interested in discounts for prescription drugs and surgical or medical services.
Freedom: You have the freedom to choose and see any type of doctor, practitioner, and specialist that you want to see. Health sharing does not give you a limit; however, these doctors or specialists must be under the provider network.
Exclusivity: Health sharing programs are not generally open to the public. Instead, they are very niche, which gives you the chance to share costs with people who are like-minded and understand you better. This, in turn, creates a type of community that gives you a form of safety and exclusivity.
Emotion Support: Many health sharing programs such as Medishare are faith-based with a criterion that everyone who joins must be Christian. This is amazing because you can get some words of encouragement or prayer from other sharers. Also, if you are part of health sharing programs, you can rest assured that your monthly share will be used in the service of other believers.
Negotiated Rates: Health sharing programs have contracts with a number of significant provider networks. This allows them to negotiate reasonable rates for a lot of services such as doctor visits, prescriptions, and surgical services.
Other benefits include
- Health sharing programs do not force lifetime limits or annual limits. You can pay according to your pocket.
- They cover extra expenses such as adoption (up to 2) and funeral costs.
- Even though there can be faith-based restrictions, there isn’t a restriction based on where you are employed.
- If you develop a condition after getting the health sharing program, you won’t be penalized for it, and your membership will still be intact.
- The monthly payments are predictable. Once you start a specially tailored program, you will have an idea of how much you will contribute every month which helps you budget better.
- The out-of-pocket costs are limited. For instance, in Medi-Share you have a limited Annual Household Portion depending on what tier of payment you want.
Who is eligible for Medi-Share?
Christians. Before becoming a Medi-Share member, you have to be a Christian and part of a church. This is also one of the benefits because it allows you to become part of a community of believers.
Although being a Christian is the primary eligibility criterion, you must be at least 18 years old to apply. Additionally, you must not have any substance abuse issues; this includes drugs and illicit substances. Children of people who are members of Medi-Share are automatically eligible until they turn 18. When they reach 18 years of age, they must sign a verifiable testimony that they are Christians and can choose to stay under their parents’ membership. However, once they reach 23, they must leave their parent’s membership coverage and get an independent membership.
People 65 years and above are still eligible but must move to the Senior Assist Program. This program is usually done side-by-side with Medicare.
Health sharing programs such as Medi-Share are good alternatives to traditional health insurance after all is said and done. They provide a different but efficient means of health coverage. The faith-based criteria are a plus for devout Christians who want their money to go into the lives of other people like you. However, at the end of the day both types of health coverage programs aim to improve health.