What to know about health share plans
What are health share plans?
Health share plans aren't health insurance. They're cooperatives – often faith-based – with members paying a monthly contribution to help cover each other’s medical costs. That sounds a lot like insurance, but there are important legal and practical differences.
Many states, including North Carolina, have passed laws that exempt health share plans from laws and regulations governing health insurance. Many of these laws are designed to protect consumers and govern the way premiums are collected and benefits are paid.
How health share plans differ from health insurance
An important benefit for consumers provided by health insurance plans is the negotiated discounts that place a ceiling on the cost of medical care.
Since health share plans have far fewer members and less bargaining power with doctors and hospitals than insurance plans, the cooperatives have less ability to lower costs through negotiated discounts.
There are many laws and regulations in place that say how health insurance companies have to operate. These protect members and the public.
But because health share plans are not subject to the same regulatory oversight as health insurance, they may not have to follow laws that govern policyholder treatment, financial solvency, or consumer protections when claims are denied or unpaid.
Federal and state laws require insurance companies to accept customers with pre-existing medical conditions and prevent insurers from charging those customers high monthly premiums. Health share plans aren’t subject to these requirements.
The costs for even common pre-existing conditions can be staggering. The Health Care Cost Institute estimates that annual health care costs for a person with diabetes are $15,000. Diabetics with health share plans are likely to pay 100% of those costs out of pocket for at least the first year in the plan. And that doesn’t include what they might have to pay for any other health problems.
Health share cooperatives make their own rules on what they will cover and what they won’t.
Members’ contributions to the health share are considered gifts, and the cooperative gets to decide whether to reimburse you for your expenses or not. And there are no set guidelines about what is or isn’t covered.
A health share plan may consider the circumstances that led to an illness or injury before deciding whether to cover medical bills. And while some insurance plans encourage healthy lifestyles, a health share plan can actually require members to take up regular exercise and a nutritious diet.
What to consider before enrolling in any kind of health plan
Every person’s health care needs and budget are different. If you’re comparing a health share plan with health insurance, look closely at more than the monthly contribution or premium.
Before enrolling, review the plan’s rules carefully, including what it does and doesn’t cover, how reimbursements work, and what legal protections are available if a bill isn’t paid. Understanding these details can help you avoid unexpected costs and make a more informed choice about your health coverage.
