Health Care Sharing Ministry Data Point to Problems for Consumers, Regulators

By Nadia Stovicek and JoAnn Volk

A latest examine from the Government Accountability Office (GAO) sheds new mild on well being care sharing ministries (HCSMs). The GAO interviewed officers from 5 HCSMs on plan options, enrollment, and advertising and marketing. The report contains, for instance, details about HCSM use of paid gross sales representatives, administrative prices (one HCSM directs as much as 40 p.c of members’ contributions to administrative prices) and membership (one HCSM stated a survey of their members discovered 42 p.c had earnings beneath 200 p.c of the poverty stage, which might make them eligible for substantial subsidies for a Marketplace plan). But the report provides solely a snapshot of a handful of HCSMs.

Despite a historical past of fraud and unpaid payments, HCSMs are largely a black field for insurance coverage regulators and most people. Trinity, an HCSM administered by the corporate Aliera, just lately went bankrupt; not less than 14 states have taken motion to close down Aliera due to their malfeasance. Members suing Aliera are solely anticipated to recoup one to 5 p.c of the cash they’re owed, which may quantity to a whole bunch of 1000’s of {dollars}. More just lately, the North Dakota Attorney General settled a lawsuit with HCSM Jericho Share for creating “a false impression that its products are health insurance” and utilizing that misunderstanding to promote memberships. Beyond the information within the GAO report, little is understood concerning the operations or funds of HCSMs. A client contemplating turning into a member of a well being care sharing ministry—with an expectation that their well being care payments will probably be paid—could need to know, for instance, if the HCSM has a historical past of steady income or retains in reserve sufficient funds to cowl members’ well being care payments. To higher perceive what data is on the market, we reviewed publicly accessible audits and income studies to the IRS to see what data an bold client might acquire about an HCSM earlier than enrolling.

What are HCSMs?

HCSMs’ members comply with observe a typical set of spiritual or moral beliefs and contribute common funds to assist pay the qualifying medical bills of different members. HCSMs have many options which are much like these of insurance coverage. For instance, members’ funds are usually required on a month-to-month foundation and will differ relying on age and stage of protection, very similar to a premium. Members should pay some prices out-of-pocket earlier than they will submit payments to the HCSM for cost, akin to a deductible; member tips for protection usually require members to pay co-insurance and use a community supplier when getting care. Even the advertising and marketing depends closely on the similarity to insurance coverage, which may mislead customers into considering they’re getting extra from a membership than an HCSM offers.

Despite these similarities, most states don’t take into account HCSMs to be medical health insurance issuers, and don’t topic them to the requirements that insurance coverage corporations should meet. This can go away members financially weak. HCSMs make no assure that they are going to cowl any well being care declare, even people who meet tips for sharing, and so they don’t have to satisfy monetary requirements to make sure they’ve sufficient funds to pay claims. They additionally shouldn’t have to adjust to the buyer protections of the Affordable Care Act (ACA). For instance, HCSMs shouldn’t have to cowl important well being advantages, which embody hospitalization, maternity care, psychological well being and substance use dysfunction providers, prescribed drugs, and preventative providers. In reality, HCSMs usually exclude protection for preexisting circumstances, behavioral well being, and maternity care besides in restricted circumstances, and restrict protection for prescribed drugs.

What information is publicly accessible?

State regulators want information to grasp how HCSMs function and market memberships to customers, however most states don’t accumulate such data. Only Colorado requires information from all HCSMs promoting memberships in-state; Massachusetts collects information from these HCSMs whose members can declare credit score for protection beneath the state’s particular person protection requirement. The federal authorities doesn’t accumulate or present to the general public actionable information about HCSMs both.

However, some states require HCSMs that search an exemption from state insurance coverage necessities to make accessible an annual audit upon request. The ACA definition of HCSMs whose members are exempt from the person mandate additionally contains that requirement. Based on these annual audit reporting necessities, we contacted seven HCSMs, representing the most important HCSMs working throughout states to request a duplicate of their annual audit: Altrua, Christian Healthcare Ministries (CHM), Medi-share, Samaritan, Sedera Health, Solidarity, and Liberty HealthShare.

These audits are usually carried out by an accounting agency and supply an outline of the monetary solvency of a company, together with statements of monetary positions, actions, purposeful bills, and money flows. Of the 7 HCSMs we contacted, solely 3 offered us with an audit when requested. (See Table 1.) One HCSM, Medi-Share, solely offered a transient doc with extra restricted information than could be required in an official audit.

Table 1.

Source: Authors’ communication with the listed ministries

Because we have been unable to acquire an annual audit from all seven HCSMs, we additionally reviewed their publicly accessible 990 kinds to research monetary information. Non-profit organizations should yearly file a Form 990 with the Internal Revenue Service (IRS). With this type, non-profits report required information on the group’s actions, funds, governance, and compensation paid to sure staff and people in management positions. We obtained a number of years of 990 kinds by way of ProPublica, a information website, and the IRS web site for all the HCSMs we reviewed besides Sedera. It’s unclear why Sedera, which claims to be a non-profit on its web site, wouldn’t have submitted a 990. Because the IRS has not but printed 2021-2022 990s, we couldn’t overview the newest information.

What the Data Reveal

Audits, the place accessible, present larger element than a 990. For instance, audits present data on “functional expenses,” which embody spending on public relations, worker advantages and taxes, amongst different bills. Two audits additionally reported loans acquired beneath the Paycheck Protection Program: $3 million to Liberty HealthShare and $2.5 million to Christian Healthcare Ministries, each of which have been forgiven.

But audit information aren’t reported in a constant method. For instance, Samaritan Ministries and Christian Healthcare Ministries record members’ items and dues as income; Liberty HealthShare doesn’t depend member contributions as income as a result of they’re held in members’ sharing accounts, which aren’t mirrored within the audit. In one other instance, Samaritan Ministries studies spending on promoting, Christian Healthcare Ministries studies spending on “member development fees,” which is alleged to replicate spending on promoting, and Liberty HealthShare studies “member development fees” and “advertising” prices individually, which suggests member growth charges could embody commissions to brokers. HCSMs that pay dealer commissions usually pay substantially greater commissions than these paid to brokers who enroll individuals in ACA protection, which may drive larger enrollment.

Because we have been in a position to acquire a number of years of 990s, we have been in a position to examine income modifications over time. HCSMs report complete income on 990s primarily based on contributions, program providers, or each. The 990s lack element but it surely’s possible the income not less than roughly displays rising membership. Most HCSMs’ 990s that we reviewed noticed enormous income progress between the years we might overview. (See Graph 1). For instance, Solidarity HealthShare’s reported income grew a whopping 62,143% in 4 years, and Altrua grew about 4,010% in 5 years. Medi-Share was a notable exception to this development; it reported little or no income and progress between 2011 and 2020. It’s not clear why, as Medi-Share is without doubt one of the oldest and largest HCSMs within the nation.

Graph 1.

A majority of the HCSM 990 kinds we reviewed (Solidarity, Samaritan, Christian Healthcare Ministries, Medi-share, and Altrua) indicated spending in extra of revenues in some years and substantial income fluctuations year-to-year. This raises questions concerning the adequacy and stability of funding accessible to cowl members’ well being care prices. One HCSM, Liberty HealthShare, has come beneath latest scrutiny for his or her historical past of not paying their members’ claims.

One problem with the information accessible on the 990s is that every HCSM studies its information in another way, making it troublesome to make comparisons between them. In distinction, well being insurers should use a standardized template to report monetary information to state regulators, making it potential to grasp and examine insurers primarily based on premium income, accessible reserves, and bills paid for administrative prices and members’ well being care claims.

Conclusion

The dramatic progress in income for almost all of HCSMs we checked out suggests substantial progress in enrollment. However, the numerous income fluctuations from year-to-year, coupled with some HCSMs exhibiting bills that exceed revenues, increase questions on whether or not customers who select an HCSM as an alternative choice to complete protection can depend on their well being care payments getting paid. Regulators in search of to grasp the rising function of HCSMs of their markets—and the dangers to customers who’re persuaded, usually by deceptive advertising and marketing, to purchase memberships—want extra full information reported frequently. Ensuring HCSMs adjust to the requirement to make accessible an annual audit is a spot to start out in states the place that applies, however even that information is proscribed and all states ought to have an curiosity in acquiring extra full information to higher perceive this rising section of protection.