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Medical Cost Sharing - How it Works

Medical cost sharing helps families and individuals to pay for unforseen medical expenses. It is becoming popular due to the ACA (Obamacare) mandate that requires individuals to purchase health insurance. Members of health care cost sharing ministries are exempt from this requirement under the religious exemption outlined in section 5000A of the ACA. Many thousands are finding they save money and have better health care options when participating in such a ministry and abandoning their health insurance.

Members of these "health sharing" groups commit to pay a certain amount each month towards any medical expenses that members in their group may have. The organizations themselves provide tools to help streamline their members' donations and make sure they make it to other members who are in need that month. Members are generally required to examine costs prior to making health care decisions which keeps costs low. Some ministries help negotiate lower health care costs for their membership with doctors and hospitals etc. These savings are passed on to their members. Members of medical cost sharing ministries are not tied into any specific network of doctors or hospitals. Health sharing members have greater autonomy in making decisions relative to their own health care.

Because this is not insurance, there is no guarantee that medical bills will be paid. Members only receive a commitment from the membership to share medical costs. These organizations have rules or guidelines that provide for what types of expenses the membership will share and what types are not approved for sharing. The fact that there is no guarantee may raise some eyebrows. However, these statements are largely legal semantics. For example, one organization, Liberty Health Share, has been in continuous operation since 1995 and has never failed to pay for any expenses that met their guideline criteria.

Another difference between health sharing ministries and insurance companies, is that they are charitable organizations and do not exist to make a profit. The membership of these organizations may vote to change their guidelines and approve new or alternative treatments and may work in a more flexible manner than insurance companies.

Additionally, these ministries are not required to follow the same rules as insurance companies. The memberships only admit new members that share similar beliefs. Many require that the applicants be committed to a healthy lifestyle and not engage in detrimental activities such as smoking. They can prohibit membership based on the health of an applicant. This is what an insurance company would call a "pre-existing condition." However these ministries are not allowed to drop any members if they become sick or develop costly medical conditions.

Because the members of these communities are generally more health conscious and pro-active than the public at large, these organizations have lower health costs and pass the savings on to their membership instead of putting profits in the pockets of their ownership.

In general the differences between health sharing groups and insurance companies can be likened to the difference between a bank and a credit union. Credit unions are unions of members who have something in common. They pool money to extend credit to their members. Banks service the public at large and engage in profit making ventures. They follow different rules. They charge higher fees and operate in a more risky manner. Both types of entities make loans and provide savings accounts.

In summary, health care cost sharing groups are an increasingly popular alternative to health insurance. They present many advantages to individuals and families who share similar religious beliefs. They exist solely for the benefit of their membership. They provide a legal method to 'opt-out' of the ACA (Obamacare). Using modern technology, they provide tools to help their members share medical costs on a monthly basis without any extra hassle. Medical cost sharing groups help their members pay unexpected medical cost similarly to insurance companies but they do it less expensively.

Medical cost sharing: It's not health insurance. It's better!

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