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Despite Increases, Health Care Ministry ‘Shares’ Stay Cheaper Than Insurance Premiums

November 29, 2016

Cost-sharing ministry monthly shares are increasing, but Obamacare insurance premiums are still more expensive.

The monthly membership contribution for families of three or more people enrolled in one of the country’s largest health care sharing ministries (HCSMs) increased by 22 percent in September 2016, months before a 25 percent average increase in Obamacare premiums was scheduled to take effect on January 1, 2017.

Samaritan Ministries, a faith-based alternative to health insurance, released a video on the organization’s Facebook page on August 23 announcing members had voted on and approved the passing of a proposed increase in monthly “shares.” Samaritan members send shares to each other by writing personal checks to shoulder one another’s health care costs.

A family of three or more people paying shares of $405 per month in 2015 and most of 2016 now pays $495 per month, a 22 percent increase. On the receiving side, members are responsible for their own medical “needs,” as Samaritan calls them, costing less than $300. Members also pay the first $300 of their family’s first three needs costing more than $300 in a one-year period. All other expenses are reimbursed.

The second-lowest “Silver Plan” health insurance premium, which the U.S. Department of Health and Human Services references as a benchmark, will increase by 25 percent on average in 2017. Among all Silver Plans, average monthly premiums will increase by 17 percent, from an average of $351 to $410 for a 40-year-old nonsmoker, not counting premiums for family members, according to the plan comparison site HealthPocket.com.

The average Silver Plan’s out-of-pocket maximum is $12,952 per family in 2017, HealthPocket.com states. This includes a 15.3 percent average deductible increase from $6,480 to $7,474 per family.

‘Samaritan Is Victorious’

Dr. Chad Savage, a Samaritan member and direct primary care physician in Brighton, Michigan, says even with the share increase, his HCSM membership costs him less than insurance would.

“Yes, the rate went up,” Savage said. “However, it increased by $1,160 less per year than my old, traditional insurance product would have. Thus, the absolute savings between Samaritan and traditional insurance actually increased.”

The rate of increase in monthly shares hardly matters because shares are still cheaper than insurance premiums, Savage says.

“Basically, the relative increase, or percent of change, was bigger with Samaritan, but the absolute increase, in dollars, which is what I really care about, was less,” Savage said. “Samaritan is victorious.”

‘We Are Member-Led’

Unlike insurance companies, which increase premiums without soliciting customer input, Samaritan share increases must first be approved by members.

Anthony Hopp, vice president of external relations at Samaritan, says self-governance distinguishes the HCSM.

“One of the differentiators of Samaritan Ministries from other health care sharing organizations is that we are member-led,” Hopp said. “Our Board of Directors is comprised of members elected by [non-board] members. Additionally, the members themselves get to determine, through a vote, whether or not the monthly share is increased.”

Jesus Freakonomics?

When member expenses exceed the value of available shares, Samaritan temporarily increases the contribution families are responsible to pay toward their own medical needs, a process called pro-rating.

As shares become more plentiful, Samaritan reimburses families that had to pay more in a previous month due to pro-rating, Hopp says.

“Pro-rating has allowed us to stay in the black and maintain a 30- to 60-day time period from when the bills are received until the medical need is published,” Hopp said. “In addition, over the last seven years, by God’s grace, all pro-rated amounts were eventually negated through extra giving from our members and discounts from providers.”

Several consecutive months of pro-rating can prompt Samaritan to ask members to vote on whether to increase monthly shares.

“Historically, this has happened approximately every two years and the share increase proposals have always passed immediately, with the exception of one time,” Hopp said. “On that occasion, we pro-rated another two months, voted again, and the increase passed easily.”

Increasing Membership

Approximately 625,000 people in the United States have membership in an HCSM, and enrollment has increased rapidly since implementation of the Affordable Care Act began in 2013.

Samaritan’s membership grew from 64,721 members in January 2013 to more than 207,000 members in September 2016, The Daily Signal reports.

Enrollment in Medi-Share, another HCSM, grew from 59,855 members in June 2013 to 200,333 members in June 2016, according to The Daily Signal.

Liberty HealthShare and Solidarity HealthShare together represent approximately 70,000 members, Liberty HealthShare Publicity Specialist Christen Varley told Health Care News.

Hopp says enrollment is increasing because HCSMs offer value insurance companies don’t.

“Community, provider choice, affordability, and having a Biblical option that’s consistent with one’s faith are all reasons that health care sharing ministries are experiencing significant growth,” said Hopp.

Sharing Culture

Medical cost-sharing makes sense to people familiar with ridesharing and house-sharing, Hopp says.

“Samaritan members have been sharing medical needs for over 20 years, so now there is an impressive historical narrative,” Hopp said. “Also, more and more people are beginning to share in a lot of creative ways by using services like Uber and Airbnb. So, the idea of sharing medical needs doesn’t sound strange anymore.”

The feeling of community fostered by sharing health care needs in an HCSM creates member loyalty, Hopp says.

“Samaritan members are extremely happy,” Hopp said. “We receive calls, comments, and letters from our members all the time, expressing how grateful they are to be part of a community that has their back. We have a retention rate that hovers around 90 percent, and member satisfaction is well over 90 percent.”

Hayley Sledge (hayley@sledges.us) writes from Dayton, Ohio.

Image via Thinkstock

Author
Hayley Sledge writes from Dayton, Ohio.
hayley@sledges.us