In today’s world, healthcare costs continue to rise, leaving many individuals and families searching for affordable alternatives to traditional health insurance. One such alternative that has gained popularity in recent years are medical sharing plans. Unlike traditional health insurance, these plans operate on a unique model that emphasizes community and shared responsibility in order to help minimize healthcare costs. Kansas City podiatrist, Dr. Joel Foster, explains why these types of plans might be the solution you've been looking for.
What is a Healthcare Sharing Plan?
Healthcare sharing plans are not health insurance plans. Instead, these are typically non-profit organizations where members voluntarily share their medical expenses with one another. Unlike insurance plans, healthcare sharing plans are not regulated by insurance laws and don’t provide traditional insurance coverage. Instead, they operate as a community of individuals who voluntarily contribute a monthly share into a pool, which is then used to help cover the medical expenses of fellow members.
How Does the Cost of a Healthcare Sharing Plan Compare to Insurance?
Monthly Premiums
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Healthcare Sharing Groups:
These typically offer significantly lower monthly contribution amounts than traditional insurance premiums, ranging from $100 for an individual to $800 for an entire family, depending on coverage and plan. For multiple reasons, healthcare sharing plans have fewer overhead costs, making them much more affordable than traditional health insurance. -
Traditional Insurance Companies:
Traditional insurance monthly premiums are much higher, ranging $450 to over $1200 for individuals and over $2,000 for families. These premiums reflect the profit-driven nature of insurance companies and the added administrative costs.
Deductibles and Out-of-Pocket Costs
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Healthcare Sharing Groups:
These types of plans generally have significantly lower monthly commitments than traditional insurance monthly premiums as well as more flexible out-of-pocket costs. While members may still pay for some services, the structure is often simpler and more affordable compared to traditional insurance. -
Traditional Insurance Companies:
Traditional insurance plans tend to have higher deductibles, from $1,000 to $10,000 for individuals and higher for families. Yearly out-of-pocket maximums can reach $6,000 to well over $20,000, depending on the plan. This does not even account for doctor visits or ER visit copays which typically are additional out of pocket costs.
Co-pays and Co-insurance:
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Healthcare Sharing Groups:
Members typically cover their own minor healthcare expenses (With huge savings through direct care providers.) They then pay a pre-agreed on amount for any major needs. After that amount is paid, all other costs are typically covered by the cost-sharing contributions of the other members. Costs are generally more predictable than traditional insurance. Members also agree on cash price with a provider before the treatment is rendered. -
Traditional Insurance Companies:
Traditional insurance plans require co-pays as well as co-insurance. Typical co-pay amounts range on average from $20 to $100 for doctor visits. On top of this, each member is responsible for any additional billed amount until they have met their deductible. Once they have met their deductible, they are, oftentimes, then responsible for, on average, an additional 20% of billed expenses until their maximum out of pocket amount has been met. These costs can add up quickly. Also, the fees are very vague and oftentimes unattainable until after the services are provided. This means you have no idea what you are getting charged until after you have received treatment.
Out-of-Pocket Maximums
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Healthcare Sharing Groups:
These plans generally have lower out-of-pocket costs, with per incident caps on payments that are typically lower than traditional insurance. -
Traditional Insurance Companies:
Traditional insurance often has higher out-of-pocket maximums, ranging from $6,000 to $20,000 or more, depending on the plan.
Disadvantages to Healthcare Sharing Groups
- These are designed for people that are relatively healthy and do not anticipate multiple trips to the doctor yearly
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These, oftentimes, do not cover pre-existing conditions or require a waiting period for pre-existing conditions.
Benefits of Healthcare Sharing Groups
1. Lower Monthly Costs
One of the biggest benefits is the potential for significantly lower monthly costs compared to traditional insurance. Because it’s not an insurance product, there are little to no overhead costs related to profit-making or marketing. This allows for more affordable monthly contributions that can be significantly lower than a regular insurance premium.
2. Financial Support for Major Medical Expenses
Members can rely on the shared resources of the group when unexpected medical events occur. Whether it’s a hospital stay, surgery, or emergency care, Group sharing helps cover the financial burden of large medical expenses that can otherwise be financially devastating.
3. Access to 24/7 Telehealth
Many health sharing groups include 24/7 telehealth services as part of their benefits. This means that members can consult with doctors at any time, without the need for an in-person visit. It’s a convenient and cost-effective way to address minor health concerns, get prescriptions, and receive professional medical advice from the comfort of home.
4. Nationwide Provider Access
Because you are not isolated to a network list, you can find the best and most cost effective provider you wish to use. This makes it easier for members to find trusted doctors, specialists, and hospitals, no matter where they live. Since there are no network restrictions like traditional insurance plans, members have greater flexibility in choosing their healthcare providers.
5. Maximum Out of Pocket Amounts are Per Incident, Not Per Year
With health sharing plans, once an “event” begins, the maximum expenditures are covered under the plan no matter what time of the year. With traditional insurance, for example, if you get injured in December, have a surgery and then need a follow up procedure in January or February of the next year, you now would have to reach your out of pocket maximum twice for only one major event. Or, if you are pregnant in one calendar year and have the baby in the beginning of the next year, you again would have to start over and pay your out of pocket expenses twice for the same event.
6. Flexibility in Rules and Participation
Many healthcare sharing groups give members a voice in how the program operates. Members vote on how the program should be managed, and they collectively set the rules for medical expense sharing. This democratic approach allows members to have input into the structure of their healthcare, ensuring it aligns with their values and needs.
7. Community and Support
Many of the religious based sharing groups are not just about sharing medical expenses—it’s about creating a community. Members are encouraged to pray for each other, send personal notes of encouragement, and offer emotional support during tough times. This sense of community and shared faith helps strengthen the bonds among members, making it more than just a financial arrangement.
8. No Prior Authorizations or Denials
No prior authorization is required. This means that you can get care when you need it without waiting for insurance approval. It also means that procedures or treatments that are many times denied by traditional insurance are usually covered with health sharing plans.
9. Price Transparency
Because you are dealing with the doctor or facility directly and not through a 3rd party, you can negotiate a price for your service before you have been treated. This is much better than having the treatment and then waiting to get a bill in the mail to figure out how much it will cost, which is the case with traditional insurance.
Healthcare sharing groups offer an innovative and cost-effective way to address healthcare needs. By pooling resources, sharing medical expenses, and fostering a supportive community, these groups provide members with financial assistance during times of need while providing an alternative to costly traditional healthcare plans. If you're seeking an affordable alternative to traditional health insurance, joining a healthcare sharing group might just be the solution you're looking for.
Here is a list of some of the more well know healthshare groups:
These are additional resources that may be helpful in researching healthcare sharing plans to see if they would be a good fit for you.