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Are Health Care Sharing Ministries A Viable Alternative To Health Insurance For Early Retirement?

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Like many Americans planning early retirement, our family’s biggest challenge is obtaining affordable health insurance. We’re searching for an affordable, long-term solution to bridge the gap from employer provided coverage to Medicare.

My recent research shows purchasing Affordable Care Act (ACA) compliant insurance on the marketplace presents several challenges. For those who have variable income, it is difficult to predict what your insurance premium will cost to within a few thousand dollars from year to year. This is before factoring in actual costs for medications and services if you need care.

There is variability in the number of plans and providers available who accept the ACA plans based on geographic location.

You may qualify for subsidies and live in an area where the ACA is functioning well. Still, you face risk if you are relying on tax credits to keep insurance affordable. The system could can change at any time.

This led me to look outside traditional insurance options to health care sharing ministries (HCSM).

I compared the four major health care sharing ministries. My goal was to answer four fundamental questions for each.

  1. Who is eligible to use the HCSM?
  2. What services and providers are covered (and excluded) by the HCSM?
  3. Does this HCSM provide the financial protection of traditional insurance to protect me in a worst case scenario?
  4. What does it cost to participate in the HCSM?

Brief History of Health Sharing Ministries

Christian Healthcare Ministries was the first HCSM. It was formed in 1981. Use of HCSM increased dramatically after the passage of the ACA.

I wrote an overview of health care sharing ministries for the website Doughroller a few years ago. If you aren’t familiar with HCSM, you may want to start there for a more thorough introduction.

There are currently four major HCSM; Christian Healthcare Ministries, Liberty HealthShare, Medi-Share and Samaritan Ministries.

Before diving into specifics of each of the four HCSM, it is important to understand two universal truths that apply to all of them.

Healthcare Sharing Ministries Are Not Insurance

HCSM are based on the early Christian tradition of voluntarily pooling resources to meet others needs. This pooling of resources is similar to how health insurance functions.

HCSM terminology is analogous to health insurance. Below is a list of insurance terms, and the rough equivalent used by HSM.

Health Insurance Terminology Analogous HCSM Terminology
Premium Monthly Share
Deductible Annual Household Portion, Annual Unshared Amount, or Personal Responsibility
Claim Event, Incident, or Accident

It’s important to understand there are real differences. There is more at stake than a play on words.

Anecdotally, HCSM work well for most participants. However, there is no legally binding contract and no legal recourse for a member if financial needs are not met. This introduces a unique financial risk of HCSM that is difficult to quantify.

Because HCSM are not medical insurance, they are not bound to laws that govern ACA insurance products.

HCSM aren’t required to pay for all treatments and conditions ACA insurance is required to cover. They also aren’t required to accept people with pre-existing conditions.

Another distinction is HCSM can cap annual and lifetime benefits. Medical insurance cannot.

These distinctions allow the price of HCSM to be far cheaper than the unsubsidized price of ACA compliant insurance plans. HCSM can control financial risks that insurance companies can’t. This is a distinct benefit of using a HCSM if cost is your primary concern.

However, the ability of an HCSM to cap benefits creates a challenge for individuals trying to limit downside risk of a worst case scenario. HCSM may also not be a viable option for those with a pre-existing condition.

Members of an HCSM can’t utilize a Health Savings Account. They also are not eligible for ACA tax credits. Technically, members are uninsured.

Healthcare Sharing Ministries Are Exclusive

As noted above, ACA compliant insurance plans must cover anyone who applies during open enrollment periods or who have a qualifying life event. HCSM have the ability to deny membership or limit benefits to anyone with a pre-existing condition.

As religious organizations, each has unique requirements that members agree to a set of shared beliefs and behaviors. These requirements vary between HCSM. Some HCSM have theologically specific statements. Others require agreeing to broad statements that are more consistent with a general agreement with freedom of religion. We’ll explore differences below.

It is important to understand this exclusivity for two reasons.

Being able to cover a limited segment of the population and not pay for expenses that result from certain behaviors gives HCSM the ability to control risks and thus costs. This is a reason why HCSM are so much cheaper than unsubsidized insurance.

HCSM exclusivity means they are not an option for everyone. Some are more inclusive than others.

Comparison Shopping

Let’s compare four variables for each of the major HCSM.

First, I’ll explore eligibility. I’ll outline statements of belief and pre-existing condition policies. This will allow you to know whether a particular ministry is an option for you before exploring any further.

Next, I’ll summarize covered services and provider networks for each HCSM to give an idea of whether the HCSM could fit your needs.

Third, I’ll examine the benefit limits of each HCSM. This should allow a more accurate comparison to ACA insurance with regards to protecting downside financial risks in worst case scenarios.

It doesn’t take long to accumulate large medical bills for someone with a serious or chronic medical condition. Therefore, I will only consider options with benefit limits of at least one million dollars. If none is available, I’ll explain the maximum benefits offered.

Finally, we’ll look at cost. It’s impossible to cover every scenario. I’ll share costs for my family of three; 42, 41 and 6 years of age. I’ll also look at what each HCSM would cost for a couple in their early 60’s with no dependents.

Christian Healthcare Ministries

Eligibility

Eligibility requirements from Christian Healthcare Ministries (CHM) website read as follows: “To be CHM members, participating adults must be Christians living by biblical principles, including abstaining from the use of tobacco and the illegal use of drugs, following biblical teaching on the use of alcohol, and attending group worship regularly if health permits. There are no restrictions based on age, weight, geographic location or health history.”

A pre-existing condition is defined as “any medical condition for which you experience signs, symptoms, testing or treatment before joining Christian Healthcare Ministries, even if you have not been diagnosed.”

A pre-existing condition does not necessarily disqualify you from membership. Conditions are divided into “active” vs. “maintenance”. This classification determines whether needs are eligible for sharing. There is a progressive increase in cost sharing available for pre-existing conditions for three years after becoming a member. After year three, the condition is no longer considered pre-existing.

The full pre-existing condition policy can be referenced here.

Included/Excluded Services and Providers

Christian Healthcare Ministries has no provider network. Members are free to receive treatment from any doctor or hospital as long as the treatment is within CHM Guidelines. CMH shares bills for approved conditions if procedures are generally accepted by the medical community.

There are three levels of coverage; gold, silver and bronze. Only the gold level coverage shares costs for doctors office visits, prescription medications, physical therapy, home health and most maternity costs.

CHM instructs members to tell providers they are self-pay patients without health insurance. The member is responsible for negotiating a discount. CHM will help negotiate on their behalf. The member then receives the bill, pays it and submits it to CHM for reimbursement.

Members are responsible for the first $500 per incident (similar to a deductible). Following this, CHM pays 100% of the cost of care.

Any discount negotiated is credited towards the patient’s share. This incentivizes members to negotiate the best possible discount. The reimbursement process may take up to 120 days.

Maximum Benefits

The “sharing limit” is $125,000 per illness across all benefit levels. For gold level members, there is an option to purchase “Brother’s Keeper” catastrophic bills program. Gold members with “Brother’s Keeper” receive “unlimited cost support per illness.”

Cost

Christian Healthcare Ministries provides memberships in “units.” A unit is a participating individual within a membership. A single person is one unit, a married couple is two units and a family is three units, regardless of the number of dependent children.

Gold membership is $150/month/unit. For our family of three it would cost $450/month, or $5,400/year.

To add Brother’s Keeper to protect us against expenses that exceed $125,000/diagnosis adds an additional $420 to our annual cost. This additional cost consists of an annual fee of $40/unit/year, or $120 annually for our family. There is also a quarterly fee of $25 per membership unit. This would add $300 for our family of three.

In total, our family of three would pay $5,820 annually for gold memberships plus catastrophic Brother’s Keeper coverage.

Costs are not dependent on age. A couple in their early 60’s with no dependents would pay $3,880 for this coverage.

Liberty Healthshare

Eligibility

To qualify for Liberty Healthshare you have to agree that you; don’t use tobacco in any form, don’t abuse alcohol, illegal drugs or prescription drugs, are healthy and living a healthy lifestyle, and are in agreement with their shared beliefs.

Liberty’s statement of belief is the most inclusive of the four HCSM. A portion requires members to agree that “We believe every individual has a fundamental religious right to worship the God of the Bible in his or her own way.” You can read the full eligibility requirements here.

Pre-existing conditions are defined as “a condition for which signs, symptoms or treatment were present prior to application, or can be reasonably expected to require medical intervention in the future.”

Liberty has a policy of offering membership to those with pre-existing conditions, with limited coverage for those conditions for the first three years of membership. “After the first full year of continuous membership, up to $50,000 of total medical expenses incurred for a pre-existing condition may be shared in total during the second and third years of membership. Upon the inception of the 37th month of continuous membership and thereafter, the condition may no longer be subject to the pre-existing condition sharing limitations.”

Those seeking membership who have certain chronic conditions or who are tobacco users are also required to participate in the HealthTrac program. This requires working with a health coach.

The program costs an additional $80/month for each member who is required to participate. Liberty Healthshare membership may be revoked after one year if goals toward managing the condition are not met.

Included/Excluded Services and Providers

Liberty Healthshare has no network of providers. Members may choose a provider of their choice.

Members are responsible for their annual unshared amount (analogous to a deductible) following which they submit bills to Liberty Healthshare which handles the bills similar to traditional insurance.

Conditions eligible for cost sharing are outlined on page nine of the Liberty Healthshare Sharing Guidelines.

Medications are excluded. “Outpatient Pharmaceuticals—maintenance pharmaceuticals and over-the-counter medications (whether prescribed or not) are not shared in beyond any pharmaceutical discount programs that Liberty HealthShare may offer.”

Among the exclusions are “hazardous hobbies”. Per their guidelines: ”An activity is hazardous if it is an activity which is characterized by a constant or recurring threat of danger or risk of bodily harm.”

Rock climbing and spelunking are explicitly mentioned as examples. Other adventure sports I participate in including mountain biking, mountaineering and backcountry skiing are not explicitly excluded, but would seem to fit the same category.

It is wise to read the benefits of any plan in detail. These two specific exclusions combined with my wife’s pre-existing history of migraines and autoimmune like symptoms (never definitively diagnosed) would have disqualified every medical cost we’ve incurred in the past five years, aside from one or two sick visits for our daughter. These would also be our most likely future expenses as a young, relatively healthy and active family.

Maximum Benefits

Liberty offers three programs; Liberty Complete, Liberty Plus and Liberty Share. The Plus and Share options each cap benefits at only $125,000 per incident. The Liberty Complete program caps benefits at one million dollars per incident.

Cost

The cost of the Liberty Complete varies based on age and number of participants. The age classifications are divided into under 30, 30-64 and 65 & over.

The price is based on a single participant, a couple or a family (regardless of number of dependents).

The Annual Unshared Amount (analogous to a deductible) is the same across age groups. It is $1,000 for an individual, $1,750 for a couple and $2,250 for a family.

The cost for our family of three would be $529/month or $6,348/year. The price for a couple in their early 60’s would be $399/month or $4,788/year.

Medi-Share

Eligibility

Medi-Share has a theologically specific statement of faith that is more exclusive than either Christian Healthshare Ministries or Liberty Healthcare. You can read the full statement of faith here to determine if you would qualify.

Medi-Share defines pre-existing conditions as “a sign, symptom, diagnosis, testing, medication or treatment of a condition that a Member has before the start of membership.”

This does not disqualify someone from membership. However, there is no sharing of costs for any treatment related to a pre-existing condition for the first three years of membership. After three years, members are eligible for sharing up to $100,000 annually for treatment of the pre-existing condition. After 5 years of membership, the limit increases to $500,000 annually.

Included/Excluded Services and Providers

Medi-Share utilizes a preferred-provider organization (PPO). They encourage members to use providers in the PPO to help control costs.

If care is sought by an out of PPO provider, members are responsible for an increased share of costs as outlined in the Medi-Share guidelines.

The list of services eligible for cost sharing is robust with Medi-Share, including limited sharing for prescription medications. A full list of medical conditions eligible for limited sharing and those not eligible for sharing can be found in the guidelines.

Maximum Benefits

The maximum sharable amount is $50,000 for the first month of membership with Medi-Share. Following this, cost sharing is unlimited for new eligible conditions. There is limited sharing for pre-existing conditions as outlined above.

Cost

Medi-Share has a more complex pricing system, which is analogous to traditional insurance. You can choose higher Annual Household Portion (analogous to a deductible) to get a lower Monthly Share (analogous to a premium), or vice versa.

Medi-Share also offers a “Health Incentive” which enables members who meet certain criteria, including satisfactorily completing their Online Health Form and meeting requirements for blood pressure, body-mass index and waist circumference to pay a lower “healthy monthly share.”

Due to the many price options and possibilities, it is easier to report Medi-Share prices in graphic form. The first screen shot are prices for our family of three.

The second screen shot shows pricing for a married couple, with the oldest partner being 62 years of age.

Samaritan Ministries

Eligibility

Similar to Medi-Share, Samaritan Ministries has a lengthy and theologically specific statement of beliefs (found here) that must be agreed to prior to applying for membership.

Notable requirements include requiring members:

  • “Attend a Christian church regularly (at least three out of four weeks per month that weather or your health permits).”
  • “Agree that when you have a dispute with a fellow Christian, and your fellow Christian is willing to submit that dispute to fellow believers for resolution, you are not to sue each other in the civil courts or other government agencies, (Section XII). A person initiating a legal proceeding against SMI to become a member would disqualify himself from membership.”
  • “Have your pastor or Christian church leader sign a statement confirming that you meet the above requirements.”

Samaritan Ministries has a lengthy and variable policy on pre-existing conditions. Limitations in sharing are based on the nature and type of condition. Their full pre-existing condition policy can be found here.

Included/Excluded Services and Providers

Samaritan Ministries has one of the more robust lists of sharable expenses. This includes some prescription medications, alternative treatments such as chiropractic, some dental expenses and even medical tourism “when there are substantial savings.” Members are not restricted by a provider network.

However, their policy is also the least straightforward of the four HSM, with many specific conditions for sharing based on diagnoses and treatments. If Samaritan Ministries seems like a good fit, you can review their Guidelines for specifics as they relate to your needs.

Samaritan Ministries has two benefit levels, Samaritan Classic and Samaritan Basic.

Samaritan Classic has an initial unsharable amount (analogous to a deductible) of $300 per need (injury or illness). Following this, Samaritan Ministries pay 100% of medical bills related to the need.

Samaritan Basic has an initial unsharable amount of $1,500 per need. Following this Samaritan Ministries pays 90% of expenses and the member is responsible for 10%.

Samaritan applies any discount obtained on care to reduce the member’s initial unsharable amount.

Maximum Benefits

Maximum benefits are limited per need (injury or illness). For the Classic plan, the maximal benefit is $250,000 per need. For the Basic plan, the maximal benefit is $236,500 per need.

Members of either plan can participate in the Samaritan Ministries Save to Share Program. This program covers expenses that exceed a members $250,000 maximal benefit. This benefit costs $133/individual, $266/couple or $399/family annually.

Details of the program are outlined in Samaritan Ministries Guidelines and should be read carefully. There is no benefit limit for Save to Share participants. However, it is made clear that there is no guarantee of fund availability.

Cost

The cost of Samaritan Ministries is based on membership level and the number and age of participants.

Membership for our family of three is $495/month, or $5,940/year for Classic. Adding Save to Share coverage would add $399 annually, bringing total cost to $6,339.

It would cost $300/month, or $3,600/year for Basic. Adding Save to Share would bring total cost to $3,999.

For a couple in their 60’s, the cost for membership at the Classic level is $440/month or $5,280/year. Adding Save to Share would give a total cost of $5,546.

It would cost this same couple $320/month for Basic, or $3,840/year. Adding Save to Share would give a total cost of $4,106.

Conclusion

I’ve read a number of bloggers’ positive reviews of different health sharing ministries. I also have several entrepreneur friends who chose health sharing ministries because traditional health insurance was unaffordable. They share overwhelmingly positive experiences with HCSM.

Prior to digging into the details, I assumed an HCSM would be a viable long-term solution for our health insurance needs. After doing research, we’ve concluded none of the HCSM will work for our family.

Unacceptable Risks

About five years ago, my wife began having an assortment of odd symptoms. She has never been diagnosed with any specific disease, but is suspected to be in the early stages of an autoimmune disorder.

She has refused medication, electing to manage her symptoms with a combination of improving diet, decreasing exercise and improving stress management and sleep. To this point, her efforts have been successful. To a casual observer, she is extremely healthy.

Despite this, her symptoms would qualify her as having a pre-existing condition per each HCSM’s definition. She also does have a diagnosed pre-existing condition of migraine headaches.

She went to the ER when one particularly scary flare up of symptoms, possibly a severe migraine or a presentation of her autoimmune symptoms, mimicked symptoms of a stroke.

Using a HSM would mean having to decide between the unacceptable risk of waiting too long in a true emergency vs. the unacceptable risk of receiving an excessive emergency room bill for another “false alarm” with symptoms that could be attributed to a pre-existing condition.

Incentivizing Behavior

One of the many flaws in our healthcare system is the tremendous cost to treat chronic medical conditions. Many of these conditions are partially or completely preventable.

Smoking has become so stigmatized in our society that smokers are discriminated against with higher insurance rates. By comparison, there is no such penalty for any other high risk behavior.

HCSM have a definite price advantage compared to traditional insurance. They have the ability to incentivize healthy behavior to control their costs.

This was one of the appeals of our family using a HCSM. We’re health conscious. We assumed we would benefit with lower costs compared to health insurance.

Matching Incentives to Lifestyle

I learned that some of what we consider healthy activities are deemed “hazardous” by HCSM. Thus, they put us at increased financial risk if using certain HCSM.

I highlighted this above with Liberty Healthshare. This was not to single them out as particularly bad or different. It was just the most specific application to our situation.

Liberty’s guidelines explicitly define rock climbing as a “hazardous hobby.” As such, injuries that occur as a result are not eligible for cost sharing.

We try to be extremely cautious when climbing. Still my wife suffered a finger tendon injury when climbing last year doing a “sit start”. Her butt was literally on the cushioned floor of an indoor climbing gym when the injury occurred. She was performing an activity safer than crossing a street or riding in a car when her injury occurred.

The injury was first treated with cortisone injections. This was unsuccessful. Next, she needed an MRI. Surgery and physical therapy were eventually required to regain function in her hand. This would have cost us tens of thousands of dollars in unshared costs due to the injury occurring as a result of a “hazardous hobby.”

I realize most readers of a retirement blog are not rock climbers. However, other more common activities including riding motorcycles and ATVs are excluded or limited by some ministries due to their risk. Each HCSM has a different policy regarding the use of alcohol and alcohol related injuries.

Other specific conditions that vary greatly in coverage between plans are pregnancy and issues with childbirth, coverage of prescription medications and alternative medicine treatments.

If someone is going to use a HCSM in lieu of traditional medical insurance, it’s vital to understand the specific guidelines of the particular HCSM to assure it does not expose you to unacceptable financial risks.

Weigh In

What are your thoughts about health care sharing ministries? Have you had positive or negative experiences with a particular HCSM? Who is a good candidate to use an HCSM? Who should avoid them?

Last week, I was overwhelmed by the quantity and quality of comments related to purchasing insurance on the open marketplace. I look forward to reading your feedback on HCSM as well.

Any discussion of health insurance in America has a political component to it. When we discuss health care sharing ministries, it also adds a religious component to the discussion.

Remember the mission of this blog is to assist others planning to retire sooner. Please continue to refrain from political or religious rants or name calling. Comments should add value to others’ planning efforts. Thank you.

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Comments

  1. I’ll give a thumbs up to Liberty Health Share if your preexisting conditions don’t make it impractical. My wife was on it for two years before she qualified for Medicare last year. She had a minor preexisting condition that required her to have a counselor and meet some health goals. She did and got off the program in about six months. They reimbursed quickly and none of her health care providers complained. One even said how great they are to work with.

    When we evaluated health sharing, I was very skeptical. Some of the providers have strange requirements. One I remember is that you had to have your minister verify that you needed financial sharing of your medical costs (yeah, right).

    • Chris Mamula says:

      Thanks for sharing your experience Ken B.

      Liberty is the HCSM I was most familiar with prior to doing my own research and I have several first hand reports of members who are very happy with Liberty. It is pretty intuitive, seems the most similar to traditional insurance and is the most inclusive with regards to statement of beliefs.

      I was surprised when looking into the details that it would be such a poor fit for our family. That’s why I encourage everyone to really dive into the details before making the important decision to choose a HCSM in general and a specific HCSM that matches your needs. Agree that they can be a good alternative for some. Unfortunately, they’re far from a one size fits all solution though.

  2. A very thorough and complete assessment of this alternative to traditional health insurance providers.
    As the leader of a self-insured small business (~125 covered souls) I became very familiar with the details and costs of providing health coverage for a wide range of people.
    We did not have or exercise the HCSM ability to exclude pre-existing illnesses or “risky” behaviors or life styles as we needed to provide benefit to the people we employed and their dependants. Sady, but not surprisingly, too many of our employees and dependants participated in risky activities, used alcohol, smoked and were overweight or obese as that is a typical American situation. We were legally or functionally unable to discriminate against these employees or influence their behavior beyond small incentives which were essentially ineffective. BTW- There was no monthly health benefit premium and deductible
    /out of pocket maximums were $1.2-3k, single-family.
    As you can imagine with a small population of people the risk is highly variable and, we were told by insurers, impossible to accurately assess. Thus traditional insurance products are very expensive as they essentially assume nearly worst case situations will regularly occur.
    We decided to self insure many years ago and joined an employers cooperative to bargain for discounts from health care providers. In addition we purchased stop loss insurance to cover unlikely but potentially ruinous catastrophic health care incidents; i.e. multiple employees undergoing cancer, or cardiac event treatment in the same period.
    This approach was and remains successful. In 10 of 14 years the total costs of providing employees this generous health benefit was significantly less as self insured then a fully insured plan, quoted for comparison nearly every year. Tragically in 4 years several employees suffered with serious conditions costing over $1M and activating our stop loss coverage.
    I am convinced from this experience that a self insured cooperative of reasonably healthy and responsible people can provide health coverage for people without onerous restrictions. These HSCMs are an honest attempt to do this within an ideology that reasonably includes many Americans.

    • Chris Mamula says:

      Thanks for the kind words Luda.

      Consistent with your experience, I was surprised to see the difference between the full unsubsidized costs of plans available through my wife’s employer and plans available to individuals on the open marketplace. The cost of a marketplace plan for our household of 3 is over $4,000/ year more than the group plan.

      Agree that HCSM are doing their best to help as many people as possible and this may be a good solution for some. Unfortunately, they are not a good solution for others such as us.

  3. George Bretz says:

    When I found myself unemployed at 57, (eight months before qualifying for retiree health benefits through my employer) I needed to pursue healthcare options.
    For us, (spouse also 57 and myself), Christian Health Minisries made sense.
    We have been Church members for all of our thirty year marriage, have no underlying health challenges and work hard to maintain a healthy lifestyle.
    Our primary concern was catastrophic coverage with reasonable premiums. At our level of income, we do not qualify for ACA subsidies. Our ACA premiums were in the range of $12,000 per year with only catastrophic coverage.
    With Samaritan we are both covered for less than $6,000 per year. I had one need during the year, an ER visit for stitches. It was fully covered.
    Healthcare Ministies are not a perfect solution to our dysfunctional health care system. Also, I do feel some degree of insecurity that they are not legally bound to coverage. However, life is full of unforeseen events and eventually we all pass out of this world. No quality/quantity of insurance changes the inevitable. I honestly believe our Faith is more important than our insurance.
    We are very pleased with Samaratin and expect to be on CHM until qualifying for Medicaid in six years.
    George

    • Chris Mamula says:

      George,

      I agree that the concern with lack of legal protection is a minor risk. These are large organizations, with solid track records and good intentions. However, it is a unique risk on top of the bigger concerns I outlined for our family.

      Best,
      Chris

  4. Dave @ Accidental FIRE says:

    AWESOME rundown on health sharing ministries Chris. As I plan for full retirement and ponder my healthcare options, these definitely qualify as one of the choices. Even if I only use them as a holdover to getting real insurance, its nice to know they’re there and the variations between them. Great consolidated info!

    • Chris Mamula says:

      Thanks for the positive feedback Dave. I learned a lot in doing my research and glad to see I was able to pass at least some of that along for readers.

  5. My wife and I used Solidarity Healthcare this past year and they covered her mammogram and they paid what the
    traditional insurance paid last year. I started a defined benefit plan which allows me to defer income and I’m considering
    kaiser HMO for next year since I believe that I will qualify for the subsidy with 98% certainty. Its amazing that 1 dollar can be the difference between paying nothing or 17400 for the year !!! Cost of care is very opaque which makes it difficult to price insurance; what would be illuminating to see is the acutual distribution of cost for every individual each year on a
    bar chart so one can see what the probability of incurring a cost of say greater than 500K for the year actually is.
    Oh , I noticed that solidarity healthcare posted what they paid each month of this year up to October.

    • Chris Mamula says:

      Mike,

      Good to hear your experience with Solidarity. I’m not as familiar with them, but my understanding is that their statement of beliefs is more in alignment with a Catholic theology, which would make them attractive to a fairly large segment of the population.

      Thanks for sharing,
      Chris

  6. Chris, I really appreciate your review. I’m facing the same decisions soon, and I’m glad you shared the climbing “hazard” definition regarding Liberty.

    For what it’s worth though, don’t bother with doctors on the pulley injuries! 😉

    • Chris Mamula says:

      Mr.CC,

      This is actually her second pulley injury. Don’t know how effective it will be, but she’s definitely taping her fingers before climbing going forward.

      The first injury (to her left hand) healed with conservative care, but it took a long time. This one (to right hand) was not getting better after 6 months with considerable swelling, pain and loss of function. Possibly because on her dominant hand and so more difficult to allow to rest adequately? The surgery was effective for her.

      Chris

  7. What a great and detailed comparison piece! I pay over $16k for health insurance for my wife and I in our early retirement with a deductible so high we will likely never get a penny back in a claim. And that’s fine! I don’t have insurance to make money but to protect our assets against a catastrophic illness. Medical sharing companies do not promise that protection, only insurance can. Sure they are inexpensive, because they do not offer the same kind of protection. This is a case of you don’t get what you don’t pay for.

    • Chris Mamula says:

      Steveark,

      Thanks for the positive feedback. I think these organizations have good intentions and they’re certainly a more affordable solution that is better than nothing for those who can’t afford unsubsidized insurance. That said, I agree with your assessment and they don’t control risk for our family as well as traditional health insurance and we’re not willing to accept the increased risk to save money.

      Chris

  8. While I can’t speak to health care sharing options with regard to early retirement, I do have experience with Liberty Health Share. I signed my wife and three kids up for their premium plan a couple years ago. We currently pay $450 per month. The yearly “unshared” amount (“deductible”) is in the $1500 range. I have traditional coverage through my job, but my employer doesn’t offer assistance for the family. If I had added my family to my traditional plan, it would have cost nearly $1,600 per month in premiums with an annual deductible in the $6500 range. No thanks.

    We only have one insurance company in my particular state (Anthem BCBS), so there is no opportunity to “shop” around, as they say. Our HHI is a little too high for ACA credits and thus health insurance simply isn’t an option for us. Despite being frugal to a fault, we simply can’t afford it.

    My nearly two year experience with Liberty has been positive, although we luckily haven’t had any major health issues. They do pay for preventative services. For example, my wife’s yearly mammogram is covered. You do have to educate the doctors, hospitals, and clinics about “health sharing”. You have to advocate for yourself and attempt to get the best rate on services. That can be stressful. Liberty helps in that regard and provides us with an online account to track the claims that have been processed.

    As you know, hospitals and clinics have a low negotiated service rate for people with insurance and a ridiculously high rate for people who don’t have insurance. It’s unfair and feels like something out of bizarro world. It’s like a grocery store charging someone $10 more for a gallon of milk because they can’t afford to be part of the insurance clique. Anyway, this is the part you have to navigate around when you’re part of a health sharing network.

    Today I’m working on negotiating down the ER “room costs” from a weekend visit my college age son made to a local hospital. Long story short, he thought he broke his nose and went for a late night X-ray. Thankfully it wasn’t and he required no additional services. Nevertheless, they charged him $1100 for being in the ER room/bed for one hour and $350 for the X-ray. This doesn’t include the physician’s fees. I will likely be able to get this reduced with a few phone calls, but I think it’s unfair that anyone would have to in the first place. Even if I don’t, I’ll recoup the cost within one month of saving with Liberty premiums versus Anthem premiums. Hope my anecdote is helpful to someone.

    • Chris Mamula says:

      Brian,

      Your anecdote and insights are very helpful. They bring up interesting arguments on both sides of the HCSM issue.

      On the pro-HCSM side, your case demonstrates that these organizations give options in cases where there are no other acceptable, affordable options for health insurance.

      On the anti-HCSM side, your case brings up another unique risk of HCSM. For people with teenagers or young adults on your plan, their is an additional set of unique risks. HCSM generally don’t cover care for things like conditions related to alcohol and illegal drugs, STDs and pregnancy outside of wedlock, or other high risk behaviors such as my rock climbing hobby. Even if you are comfortable accepting these conditions for yourself and your spouse, how comfortable should you be accepting risks for a teenager who’s behavior is out of your control? How much financial risk do their behaviors expose you to?

      Assessing risk is complicated and every situation is unique.

      Thanks for sharing your situation and adding to the conversation.

      Chris

  9. I agree with Steveark that for some of us FIRE/FATFIRE folks, we really just need asset protection against catastrophic illness. When we retire, we don’t mind paying out-of-pocket for medical expenses up to say, $25k/yr. if it meaningfully reduces premiums. I don’t mind giving up mulitple nice vacations per year if it means taking care of an illness (beside, you can’t play if you’re injured or sick). So like auto insurance, I will want to go with the highest deductable plan available and pay out of pocket for smaller expenses but get good coverage for catatropies only. We only need protection against very expensive incidents and caps of $1M can be risky if you have cancer, alzheimers, etc. and need many years of expensive care.

    • Chris Mamula says:

      Agree that in many ways this is one of the big problems with traditional health insurance. Employers pay a large percentage of premiums. Insurance pays a large percentage of even routine care. Consumers have no idea what anything costs, because they aren’t paying for it. Thus they seek expensive and unnecessary care they would never accept if paying out of pocket. HCSM are similar to insurance in pooling resources to cover these expenses.

      The purpose of any insurance in my mind should be to pay a relatively small amount to insure you against an event you CAN’T pay for yourself. As much as I don’t like our health insurance system, if used properly it should serve this purpose of protecting us in a worst case scenario (unfortunately, at insanely high costs because also required to pay for all the routine stuff for a very unhealthy population). I’m not sure a HCSM would provide that downside protection, and I’m not willing to bet our financial future on it.

  10. When we retire, we and I suspect other FIRE/FATFIRE households also only need asset protection against catastrophic situations. We can tolerate something like $25k/yr. in out-of-pocket medical expenses since if you’re ill, you can’t take multiple vacations per year anyways. So like we do with auto insurance, we want a plan with a very high deductible (to save money on premiums), but good protection from catastropies (umbrella). A $1M cap, dubious coverage when care gets expensive can be risky if you get cancer, alzheimers, etc. where many years of expensive care is needed. So we will probably stick with traditional coverage.

  11. Joshua Sheets of “radical Personal Finance” has a podcast on HCSM and “asset protection.” Generally, he favors HCSM. For a catastrophic illness, the HCSM will pay some, next you negotiate the bill down as far as possible, then default and rely on asset protection.

    https://player.fm/series/radical-personal-finance/ep-603-friday-qa-healthcare-sharing-ministries-and-their-maximum-limits-health-savings-accounts-and-what-to-do-with-an-inheritance-when-youre-in-debt

    • Chris Mamula says:

      Thanks for the recommendation ReFinDoc. I listened to a podcast he did a few years ago that went in depth on the history and philosophy of HCSM. I’ll check that one out as well.

      • Awhile back, I talked with an insurance broker that proposed a package of a HCSM along with other limited-coverage options. This required being cash-pay with providers and actually having bankruptcy be part of the “plan”. No thank you.

  12. Wow, awesome analysis, Chris! We’re planning on using Liberty HealthShare after I leave my job at the end of this year (yay, FIRE!). But we’re only anticipating using it until we move to Panama in the summer. If we move back to the U.S. though at some point, I think we’d still go the route of an HCSM unless things have changed here… you never know! They’re definitely not perfect, but hell, neither is regular insurance.

    — Jim

    • Chris Mamula says:

      Thanks for the kind words Jim. That is the struggle. Not only are none of the options perfect, none of them are even good IMHO. Curious what you will do while in Panama. I thought the idea of medical tourism was interesting but far fetched for a while, but it is something that I plan to explore more due to how bad our system is.

  13. Great info. I’ve been wondering about HCSM plans and how they work for a while. Thanks Chris!

  14. We’ve been members of Christian Healthcare Ministries for a year. Our Blue Shield Bronze plan was going to be over $30k per year for a family of four with a $6k deductible per person ($12k maximum). We pay less than $6,000 for CHM per year which is now going to go to less than $4k since both our kids now have their own insurance. Yes, we have paid a bunch out of pocket this year but no where near $40k which would have been our premiums plus deductible – not to mention our co-pay. One reason we switched to CHM is that in 2017, my husband had a procedure done and we paid $3k out of pocket and that whole amount went to a co-pay. Nothing to to the deductible. We are pretty much self-insuring and using CHM for catastrophic coverage which is fine with me.

    • Chris Mamula says:

      Sarah,

      Agree that with a lot of the ACA plans you are paying ridiculous premiums to essentially have only catastrophic insurance. HCSM look much better in that light. My concern with using a HCHM as catastrophic coverage is not knowing how financially strong they are and not having a legal guarantee of payment in those downside scenarios. Samaritan ministries very clearly lays out the limits to their “unlimited” sharing plan, based on not paying out greater than a certain % of their reserves in a given year to keep the fund solvent.

      It is hard to quantify this risk, and we would most likely do what you are doing if not for my wife’s pre-existing condition. With her condition, it is not a risk we are willing to take.

      Best wishes and thanks for sharing,
      Chris

  15. Anyone have any idea of how long from application to coverage with Liberty HS?

    • I applied on Nov 30 at 4:19 p.m. and was approved by 7:50 that same day. I gave them the date I wanted enrollment to start. This was in the welcome email:

      First 60 Days of Participation: For sixty (60) days after Enrollment Date as a Sharing Member, medical expenses for any reason, other than accidents, acute illness or injury, are not eligible for sharing among members.

      Hope that helps.

  16. Great analysis. I retired in late 2014 at 53 and went on COBRA for 18 months and then went to an ACA Aetna bronze plan in 2016. I don’t qualify for subsidies and if I did I wouldn’t take them because I don’t think they were intended for people with high net worth. For 2017, the premiums and deductibles went up considerably and the number of companies offering went down to 3 – I live in Texas and Aetna and others pulled out. For 2018 premiums went up again so I moved to Liberty. I’ve not made a claim with them yet so I can’t comment on that. Here was some of my reasoning:

    1. I’m single with no dependents and healthy with no pre existing conditions. All risk is my own.
    2. Finding a provider that would take my ACA policy was getting next to impossible and I live in Houston – a very large city known for its medical center.
    3. The ACA, health insurance and healthcare cost are a mess and I’m not sure where it will go. I do think it will take time so all I need to do is “survive” until I’m Medicare eligible. I take it year by year.
    4. I looked at catastrophic policies and they were actually higher than ACA bronze. The same with the private market.
    5. I can move to another more favorable health insurance state in the future if I need.
    6. My philosophy about personal responsibility and helping others aligned with Liberty.
    7. If I got an illness that went past the $1 million max that Liberty provides, I would just jump back onto ACA at annual enrollment and get my pre existing condition covered.
    8. I travel both domestic and internationally for extended periods of time. Most ACA policies got much more expensive out of network. Liberty would “cover” me regardless of where I was – it was more portable.

    Your point about hazardous activities is one I’ll need to monitor as I have been known to participate occasionally. I don’t think it will stop me – see #1 above.

    I enjoy your writing – Donna

    P.S. Sorry to hear about your wife’s issues. I also had migraines, auras, skin rashes and other weird stuff when I was a younger. Once at the ER I was tested/monitored for stroke because my vision turned upside down – I was 43. I’m fine now. Some unsolicited advice: Stress and/or perimenopause (which can start in your 30’s and last into your 50’s) can present worrying symptoms and make you ill. Hormones are a b____. I’ve helped a handful of younger gals lately who were seeing teams of doctors. It’s hard to admit you have too much stress and that you’re getting older but it can be a relief to know you are “normal” not sick. Management is key.

    • Chris Mamula says:

      Donna,

      I’ll start at the end and work backwards. Thanks for the kind words and encouragement. I shared with my wife and she appreciates them as well.

      It is frustrating b/c nearly every MD she saw wants to start her on different meds to treat symptoms, without addressing root causes and without having a diagnosis. Our insurance system will pay for these unproven and possibly harmful meds. This kind of stuff happens every day with many different medical conditions, leading to out of control costs while creating more conditions with side effects of treatments.

      To your point about not taking subsidies for health insurance, I think this is why I disagree with you. We do everything in our power including diet, exercise, trying to manage stress and improve sleep to avoid the medical system as much as possible. Even when we do use the system, we will invest time and money to avoid medications if at all possible. Yet there is no incentive to do this. I simply don’t want to pay tens of thousands of dollars into a broken system that I fundamentally disagree with. It is so expensive b/c most people over-utilize the system and too many medical professionals are all too happy to provide treatment (even when it is unlikely to be effective and may even be more likely to be harmful). Medical professionals are incentivized to provide more care rather than being incentivized to provide better care. I know because I saw it every single day and my dislike of the system is one of the biggest reasons I wanted to retire early to move on to something else.

      All that said, as planners, we can’t just completely opt out of the system when medical costs are the leading cause of bankruptcy in our country. There are times when you do need to use the system, such as if having a true emergency, need insulin as a type I diabetic, or antibiotic to treat bacterial infections. Thus, we will continue to look for the best coverage at the best value to our family. If that means having insurance subsidized, then so be it.

      Like you, I like HCSM in theory. In practice they’re just not a good fit for our family.

      Thanks again for the thoughtful comment,
      Chris

  17. Great article. Great analysis. However, please consider:

    Cancer diagnosis cost 300k in 2017…350k (ytd) in 2018. I am 53. I can assure you I NEVER thought this would happen to me. Zero health issues prior to cancer diagnosis. I can not imagine having this illness with one of these plans. Use of these “insurance” plans as a substitute for actual health insurance is personal financial planning malpractice. Plain and simple. Early retirees…Do. Not. Even. Consider. No further analysis is necessary.

    • Chris Mamula says:

      Totally agree Kevin. I’ve seen similar situations hit too close to home. My mom received a CA diagnosis in her late 40’s and continues to have high medical costs 20 years later due to complications of the initial treatment. My cousin passed away a few years ago in her mid 40’s after a several year battle with cancer. These types of medical conditions can destroy someone financially if they are not adequately protected. That is why in my analysis I wouldn’t even consider any plan with <$1 million cap. It is also why our family is ultimately not willing to take that risk. I've heard from many relatively healthy people who are happy with the savings of a HCSM, but very few who have had to go through something like you're dealing with. I personally wouldn't want to worry about negotiating bills and wondering if I'm nearing a cap to my benefits on top of everything else you have to deal with when going through a major medical issue. Prayers and best wishes for an optimal recovery as you continue your battle. Best, Chris

    • Here is a related article. The author had a very positive experience with a sharing plan. I’ve corresponded with him privately about this in the past, so I have no reason to doubt his story. HCSM’s still do not meet my standard for “no surprises” medical coverage, however.

      https://seekingalpha.com/article/4222396-health-care-coverage-options-early-retirement

  18. As someone not living in the US, I would say that a person needs insurance for some event that could happen to them and that they can’t cover with their own assets.

    For health, expensive issues like cancer, chronic heart disease, a bad car accident, or a chronic (autoimmune) disorder come to mind.

    This is exactly where these health care sharing ministries fail: they’re okay to help you with the costs or a bit of care here or there, but a richer (FI) person could cover those on her own. And then these programs don’t cover you if you get one of the big health problems. You’ll be on your own with those after just a short period of time/treatment.

    It just doesn’t solve the big problem.

    • Chris Mamula says:

      Agree completely Petra. The problem with our system is that ACA compliant plans are by law required to cover almost everything, so for those paying full cost they can cost upwards of $25k/year for a couple in their 50’s or 60’s and prices keep increasing even faster than inflation. It will be interesting to see how the law and the marketplace evolves over time. It seems the current system is unsustainable, but the changes to this point are to double down on the system without addressing the actual problems that drive costs.

  19. Chris, I’m from Samaritan Ministries International. While it’s unfortunate that your situation isn’t good for a health care sharing ministry, we appreciate the accuracy of your research and the fairness of your presentation. Good job!

    • Chris Mamula says:

      Thanks for reading and providing your feedback Mike. I honestly was hoping we would be a better match. I think HCSM have great intentions and are filling a void for a great number of people, though it’s important to understand what they are and are not. Unfortunately, as our situation shows, they don’t work for everyone.