A Christian Approach to Covering Healthcare

When it comes to health insurance, thousands of people are counting on the Lord—or at least his faithful—to provide. Through Christian nonprofits like Samaritan Ministries of Peoria, Ill., they contribute modest monthly "shares" to pay each other's medical bills. The programs "function like an insurance company, except it's a lot cheaper and a lot less red tape," says Rocco Dapice, a pastor in Tarrytown, N.Y., who three years ago signed on as one of Samaritan's 12,800 households. The Dapice family is responsible for any medical bill under $300, but anything over that amount—like the $16,000 tab for the birth of a third child last year—is 100 percent covered. The Dapices' monthly share of $285 is in line with the $273 premium a typical family pays every month for employer-sponsored healthcare, according to Kaiser Family Foundation figures.

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The programs can be more of a bargain for self-employed people, who make up a good proportion of Samaritan members, since finding individual insurance at any price can be tough. But they aren't for everyone. In order to join Samaritan and similar programs—the two other big players are Christian Care Medi-Share and Christian Healthcare Ministries—members must be Christians who belong to a church (and have a letter from their minister to prove it). They sign a pledge committing to squeaky-clean living: no tobacco, no excessive drinking, no illegal drugs. Sex outside marriage is verboten. Should they fail to steer clear of such behaviors, they'll typically be on their own for medical expenses that result. A woman who gets pregnant outside marriage, for example, will have to cover her own costs, except perhaps if she's been raped. Ditto someone with a sexually transmitted disease. The coverage restrictions don't worry Dapice. "They're trying to provide a service to people who believe in God and who have some biblical ethics," he says. The well-publicized weaknesses of certain high-profile preachers notwithstanding, "Those kinds of incidents wouldn't come up," he says.

Every month Dapice receives a letter from Samaritan that tells him where to send his monthly share and why, explaining, for example, that Sally Smith in Nebraska broke her collarbone. He sends the check to Smith along with a card wishing her well and tells her he'll pray for her. When the Dapice family has a claim, he submits it to Samaritan. A month or so later, the ministry sends him a list of member names and the amounts he can expect to receive from them. As the checks arrive in the mail, he crosses off the names and eventually sends the list back to Samaritan to follow up with the occasional member who hasn't come through. The group shares about $2.5 million every month this way, says James Lansberry, vice president at Samaritan.

Clearinghouses. Medical sharing ministries first appeared in the early '80s, inspired by biblical teachings encouraging Christians to carry each other's burdens. Their websites and materials state explicitly that they're not providing health insurance, which they're not authorized to do. Instead, they say they're acting as clearinghouses for member-to-member sharing, which is permitted by law in a number of states. However, when these organizations take the step of collecting members' money and pooling it, then using it to cover claims, that starts to look like they're assuming risk on their members' behalf, a hallmark of insurance. State regulators take notice, and there have been numerous clashes over the years.

Christian Care Medi-Share has come in for its share of scrutiny. The Melbourne, Fla.-based ministry, with some 45,000 members, charges monthly shares ranging from $53 to $570 depending on family size and whether members choose to pay the first $250, $1,000, or $10,000 in medical costs out of pocket for each eligible "need." Members get access to a network of more than a half-million doctors and hospitals, giving them discounted rates for services of about 35 percent, according to Medi-Share President Robert Baldwin. Members submit their claims to the ministry, which processes and pays them. Before being accepted, applicants must go through a medical underwriting process that evaluates their health. Those with pre-existing medical conditions can join, but the ministry won't share any medical expenses related to their condition. Every month, Medi-Share shares about $3.8 million in medical bills.

If that sounds an awful lot like health insurance, many state insurance regulators think so, too. Several states have challenged Medi-Share for operating as an unauthorized insurer, with mixed results. The company is currently forbidden from doing business in Montana, Illinois, and Oklahoma, but it has won recent legal victories in Nevada and South Dakota, says Baldwin. "I believe the tide has turned and smoother waters are ahead," he says. (The other two major sharing organizations aren't barred from any states.)

State regulators say they face particular challenges when it comes to faith-based groups. "Candidly, it's very difficult when an organization plays the Christian card," says Kim Holland, Oklahoma's commissioner of insurance. "Nobody in elected office wants to interfere in people's ability to express their faith." Last year, an Oklahoma court issued a cease-and-desist order barring Medi-Share from writing any new business in that state.

Officials say these ministries often come to their attention when a consumer complains about lack of payment. Michael Rowden, a former pastor in Big Fork, Mont., filed suit in 2006 when Medi-Share refused to pay approximately $154,000 for heart valve surgery he had following an infection. According to court documents, the group claimed a pre-existing medical condition because Rowden had an undisclosed heart murmur. A jury awarded Rowden $835,000. The parties later reached a confidential settlement.

Although Medi-Share eventually paid his bills, Rowden says the experience has been very traumatic for his family. In Rowden's complaint, he describes a letter Medi-Share sent to Montana members outlining the lawsuit and claiming he had lied on his application. As a result, he received "belligerent and threatening contact," according to the complaint, and was ostracized from his religious community. This February, Rowden and his wife left Montana to start over in another state (he prefers not to say where). "We felt we could be going on for years trying to tell our side," he says. Medi-Share's Baldwin says that he "obviously" wishes the outcome of the lawsuit had been different. However, "as a result, we've made some changes that will prevent that from occurring again," he says, noting that a member whose request for sharing is denied can now appeal that decision to a group of seven other members who can overturn the denial by majority vote.

Protections. The conflict might have been avoided if Rowden had had regular health insurance, say experts, since group plans can't deny claims at will based on pre-existing conditions. "People in these plans aren't getting any protections of state law, including knowing that if their claim gets denied, they can appeal it to an external group," says Mila Kofman, Maine's superintendent of insurance, who studied these organizations while an associate research professor at Georgetown University's Health Policy Institute. State-licensed insurers ensure that plans cover mandated benefits and also contribute to a guarantee fund that pays claims in case of insolvency. In a licensed insurance plan, "basically, you know that at the end of the day if you have a claim, it will get paid. That's what regulators do," says Kofman.

Medical sharing programs operate much more loosely than insurance, typically using previous months' shares to pay the current month's claims. At Samaritan, if there's a big spike in needs one month that depletes the amount available for sharing, the group reduces the amount that it shares, says Lansberry. The groups also encourage members to send in extra money for needs that may not be eligible for regular sharing.

Sheila Hutcheson says she's had no difficulty getting her Medi-Share claims paid. She and her husband run a small advertising products business out of their Mount Dora, Fla., home. Although her husband receives health coverage through the U.S. Department of Veterans Affairs, Sheila had been uninsured for several years when they discovered Medi-Share in 2002. Her $414 monthly share covers her bills over $250. A few years ago when she needed an emergency appendectomy, the program covered the entire $26,000 bill, no questions asked.

But it's not just having her medical needs taken care of that gives her peace of mind. "From a Christian perspective, this is neat," she says. "When you grow up in the church, when you get older, you try to use Christian businesses." Never mind the regulators' consumer-protection concerns. Members are happy to take it on faith.