Faith-based model provides option for those priced out of insurance, but it comes with risks

When Bob Stedman suffered a minor stroke in 2017, he received 60 personal checks from strangers, along with get-well cards and notes of encouragement. 

The 55-year-old Orange County father of five used those checks, provided through a health care cost-sharing ministry, to pay for his $13,000 hospital bill. Thousands of Californians who struggle to afford private insurance have turned to the faith-based, health care cost-sharing ministry model to pay for their medical care, but experts warn that it is not a replacement for insurance, and one company involved in the field has faced accusations of deceiving consumers in other states, as well as complaints in California over billing disputes.  

In Stedman’s case, giving up private insurance for membership in the Samaritan Ministries program has saved him money while meeting his and his family’s medical needs. But he acknowledges “no solution is for everybody.”   

Health care cost-sharing ministries offer the opportunity for people to pay into a system every month and share health care costs among all members. For example, a person’s monthly payment is used to pay the medical bills for a member in need. Once a member’s annual commitment has been met, and a medical need arises, the monthly payments from other members are used to offset that person’s bills. 

But the types of services covered are limited, and generally do not include preventive and primary care. And for services that are covered, there are often limits to how much the ministry will pay toward specific bills (for Samaritan Ministries, the maximum for its standard plan is $250,000 per health care episode). 

“Do people take risk? Of course,” Nadereh Pourat, a professor-in-residence at the UCLA Fielding School of Public Health, said of cost-sharing ministries. She also directs the Health Economics and Evaluation Research Program at the UCLA Center for Health Policy Research. “The risk is that this is not an insurance policy.”

Such ministries also are based on religious and biblical principles, which can further limit coverage. 

About 1.4 million people nationwide are enrolled in registered faith-based health care cost-sharing programs, according to the Alliance of Health Care Sharing Ministries, including at least 75,000 members in California. Samaritan Ministries had 3,968 member households in California as of October, representing 12,488 individuals, according to an email statement on behalf of Samaritan Ministries sent by Patrick Benner of Hamilton Strategies, a public relations firm. 

Samaritan participants are asked to pay a “monthly share” based on their membership level to cover the health care costs of a member in need, as well as to pray for that person. When a medical need arises, a member can submit itemized bills and request payment from other members’ shares.

Stedman said his family pays about $550 a month for six household members, including his wife and four of their five children. 

The Stedmans, who are practicing Christians, had health coverage through Blue Cross before 2012 when they switched to Samaritan Ministries. The family had seen its Blue Cross premiums skyrocket over the past decade, Steadman said.

The family was paying about $1,500 a month for health insurance for the five children and the parents. They were able to cut their costs significantly when they switched to a sharing ministry. 

“We could theoretically put the extra money in our bank account,” he said. 

Beginning this month, California implemented an individual mandate that requires people to have minimum health care coverage or face a tax penalty. The penalty will be administered by the state’s Franchise Tax Board, according to James Scullary, a spokesman for Covered California.

“A person enrolled in a health care-sharing ministry plan can file for an exemption to the penalty when they file their taxes,” he said. 

To be exempt from California’s individual mandate, health care cost-sharing ministries must have been in existence at all times since Dec. 31,1999, with medical bills for their members shared without interruption. 

Samaritan began sharing medical bills for its members in 1994, according to its website. 

The California Franchise Tax Board, which will administer the individual mandate, said it didn’t have a list of health care cost-sharing ministries that would or would not be exempt from the individual mandate, and it recommend people check with their respective ministries. 

The state’s Department of Insurance doesn’t regulate health care cost-sharing ministries, and neither does any other state department. 

“Since they don’t sell insurance, they aren’t licensed by the state,” a department spokesperson said. 

Differences between health ministries and health insurance

Samaritan is one of nine such ministries operating in California that are registered with the Centers for Medicare and Medicaid. Two of them are churches that restrict their service to church members only, the alliance spokesman said.

No federal agency spokesperson answered the Center for Health Journalism Collaborative’s questions about cost-sharing ministries, including the Centers for Medicare and Medicaid. 

“I’m afraid I’m just not in a position to answer your question about who regulates the ministries,” said Jack Cheevers, a CMS spokesman who initially referred a reporter’s questions to the U.S. Treasury Department.

The U.S. Treasury Department did not return inquiries seeking comment. 

Health care cost-sharing ministries only cover certain services. For example, cancer is covered, but there could be limitations in coverage if the individual was diagnosed with cancer before becoming a member. 

Primary care, long-term care, contraceptives and abortion are among a list of medical needs not covered for Samaritan members. 

Medical necessities must also not result from  “conduct inconsistent with membership requirements.” 

Members are required to limit their alcohol consumption, and abstain from sexual activity “outside the biblical marriage,” for example. As a result, treatment for sexually transmitted diseases, such as HIV and AIDS, is not covered if the disease was contracted by consensual sex outside of marriage or through irresponsible behavior, according to Samaritan’s guidelines. 

In Stedman’s case, his stroke was caused by high blood pressure. Although his stroke bills were covered by his membership in the health care ministry, his ongoing medication to manage high blood pressure is not because preventive and primary care are not included in the faith-based model. He has to pay $30 every month for his medication, which he doesn’t mind, given the savings.

He only paid $300 in hospital costs, and the hospital reduced the rest of his original $51,000 bill to $13,000 because he said he got a discount for paying in cash and lacking health insurance. That final bill was shared among Samaritan Ministries’ members.

Stedman, who hasn’t had any problems with Samaritan Ministries, said his family doesn’t mind going without preventive and primary coverage.  

“We don’t go to the doctor for every sniffle that we have,” he said. 

A comprehensive health insurance policy pays for preventive and primary care, as well as prescriptions, treatment, specialty care and emergency room visits. 

But some ministries advertise their programs with language that might lead some to think they are buying a health insurance policy, Pourat said. Unless an individual really understands the ins and outs of health insurance, they might not know the difference.

A health insurance policy has to comply with the Affordable Care Act by providing what’s known as “minimum essential coverage.” Programs that offer limited services or only discounts do not qualify.   

“The whole concept of insurance is when something goes wrong, and when you need a specific type of service, you can get it,” Pourat said. 

“If you have a chronic health condition, maybe Samaritan is not for you,” Stedman said. 

Benner, of Samaritan Ministries, said people with health insurance can also take part in a health care cost-sharing program. For insured members, their medical needs are first submitted to their health care policy, and if there are remaining costs that are eligible to be shared, they will get covered by the ministry.  

Members also have the ability to choose a more expensive plan to receive a higher reimbursement for illnesses or injuries, he said. 

The level of payment can depend on the number of family members, the number of total members within the ministry and what their medical needs are.  

Problems with Aliera in California 

One company that works in the health care cost-sharing ministry field, Aliera Healthcare, Inc., has come under scrutiny in several states for allegedly misleading consumers about its services. It is also under investigation in California, where two complaints over billing disputes against the company were lodged in the past five years. 

In July, Texas sued Aliera to try to stop the company from continuing to sell its product, saying it was advertising “great health care with comprehensive medical plans.” The suit alleges Aliera was selling insurance without a required state license. 

According to some complaints against Aliera filed with the Better Business Bureau, people say they paid thousands of dollars on monthly member contributions, and thousands of dollars more when a medical issue arose, and Aliera wouldn’t cover the costs. 

Officials in California, however, acknowledged there are no laws to regulate entities such as Aliera and Samaritan in the state. It would be up to the state Legislature to change that. 

The California Department of Managed Care denied a public records request for copies of the two complaints against Aliera filed in California. The department said they are exempt from the California Public Records Act, based on protected information that would violate an individual’s right to privacy. 

The agency wouldn’t release redacted copies, either. 

Aliera said in a statement that it does administrative and marketing work on behalf of health care cost-sharing ministries, such as Trinity HealthShare in California, and is not responsible for issues related to the services offered by the ministries. 

Trinity HealthShare has 7,630 members in California, and continues to take new customers, a spokesman for Aliera said in a statement. 

Aliera denies the allegations in state lawsuits and investigations, and said it will “vigorously defend” its position.

“We remain committed to serving health care-sharing members in California and elsewhere, working with regulators to provide the health care-sharing solutions these members need,” its statement reads. 

While some states require written disclaimers specifying that a health care cost-sharing ministry is not an insurance company, California does not, a 2018 report from The Commonwealth Fund found. California also doesn’t require monthly disclosures and annual audits for these entities. 

Trinity HealthShare states on its website that its programs are not insurance, and Samaritan Ministries on its website describes health care sharing as “a way that Christians are paying for their health care without using health insurance.”

For now, Stedman has no regrets about turning to Samaritan Ministries and its health care cost-sharing model for his and his family’s health care. “They have a 25-year track record,” he said. 

Considering a cost-sharing program?

People searching for a legitimate health care cost-sharing program should be on the lookout for certain things, said David Weldon, president of the Alliance of Health Care Sharing Ministries. Because these organizations are supposed to be nonprofits, people are encouraged to check whether they have filed a 990 form, which the IRS requires of tax-exempt groups, Weldon said. 

Those considering these ministries should also try to determine whether the ministry’s religious or philosophical views are consistent with their own beliefs or ethics, he said. 

People should also research whether the organization offers a sharing option that’s within their budget and will meet their medical needs. 

“I would advise caution for any consumer enrolling in a sharing ministry that is either under investigation or affiliated with an entity that is under active investigation,” Weldon said. “We welcome efforts to promote greater consumer protections.” 

Patrick Benner, client relations executive with Samaritan Ministries, also advised consumers to do their homework before signing up with a sharing ministry.  

“Does the advertising, website and other communication of the health care-sharing ministry lead you to believe it is just a different kind of health insurance, or does it make (it) clear that it is very different from insurance?”

Follow the USC Center for Health Journalism Collaborative series "Uncovered California" here.