What Is a Medical Cost-Sharing Program

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With medical cost-sharing programs - also called healthcare sharing plans, healthcare sharing ministries, or simply health sharing plans - members make monthly payments into a pool of money that's used to cover everyone's approved healthcare costs.

Medical cost-sharing programs generally have lower upfront costs than health insurance plans, which is a major incentive for people who join these programs. An estimated 1.7 million people in the U.S. are members of healthcare sharing plans, according to KFF Health News.

What are medical cost-sharing programs?

Medical cost-sharing monthly payments are not premiums and the programs work differently from health insurance plans. They're typically run by nonprofit organizations and members often share religious or ethical beliefs. Sometimes, applicants are even required to sign a statement of faith.

Members of medical cost-sharing programs pay a set monthly amount into a group fund as part of their annual household portion. When a member receives a large medical bill, they can put in a share request to use the collective funds to cover some or all of their charges.

Many medical cost-sharing programs urge members to seek low-cost healthcare or charity care before requesting a payout. Some encourage members to see healthcare professionals that offer discounted rates. Others limit payouts to what they consider to be a "fair and reasonable amount," which is typically less than the cost of services. When this happens, members are responsible for paying any remaining expenses on their own.

It's important to note that medical cost-sharing programs are not legally obligated to cover the healthcare costs of members.

Pros and cons of a medical cost-sharing program

It's important to weigh the pros and cons of medical cost-sharing programs before joining one.

Here are some of the benefits:

• Reduced monthly payments: Medical cost-sharing programs typically have lower monthly costs than health insurance plans. For example, a medical cost-sharing member might pay around $133 a month. The average price for a bronze-level plan - the lowest-cost tier of insurance available on the Affordable Care Act (ACA) marketplace - in 2024 was $364 a month. Though, in some cases, premium tax credits, also known as premium subsidies, may be able to reduce ACA plan monthly payments significantly.

• Coverage flexibility: Some medical cost-sharing programs cover items - such as overseas medical treatments, adoption expenses, or funeral costs - that health insurance plans don't.

• Sense of community: Since members are typically like-minded or have religious cohesion, individuals may feel good about contributing to the well-being of others. For some, this social aspect is as attractive as the potential financial benefits.

• No open enrollment period: Members can join medical cost-sharing programs at any time, provided they meet the requirements. This means no waiting for open enrollment periods.

Here are some of the disadvantages:

• Limited protections: In general, medical cost-sharing programs don't offer the same protections as health insurance plans. They're also not covered under the No Surprises Act, which helps people avoid surprise medical bills.

• No coverage guarantee: Medical cost-sharing programs aren't legally required to pay healthcare costs for members. A member could contribute funds for months or even years without receiving a payout. A 2024 Seattle TV station probe found that nearly 200 complaints have been filed against healthcare sharing ministries in the last 3 years for not paying the bills of members. A ProPublica investigation of Liberty HealthShare published in 2023 revealed that the organization's members faced millions of dollars in medical debt after not receiving payouts.

• Unregulated products: State insurance regulators don't supervise or regulate medical cost-sharing programs or how much members pay for them.

• Limited eligibility: Members may need to agree to strict spiritual or lifestyle guidelines to qualify for a medical cost-sharing program. If your submitted bill is deemed to fall outside of those guidelines, your request for payment could be rejected.

• Confusing terms and limitations: Not all medical cost-sharing programs are transparent about their coverage rules and restrictions, though some limit how many medical visits they'll cover annually and/or have a waiting period before coverage begins. Many programs also have an annual unshared amount that, like an insurance deductible, has to be paid before members are eligible for payouts. Unlike health insurance plans that fall under ACA regulations, medical cost-sharing programs are not required to cover essential health benefits. But some use misleading marketing that may cause consumers to think they work like health insurance plans.

What questions should I ask a representative before joining a medical cost-sharing program?

If you're considering signing up for a medical cost-sharing program, it's important to understand what you'd be buying into and how the program is different from health insurance. Here are some questions to ask:

• What are the program's guidelines, including lifestyle or religious rules?

• What services will it cover and are there any guarantees for coverage?

• What are the program's limitations?

• Does the organization have a reputation of helping its members with their medical bills?

• What are my out-of-pocket costs going to look like?

• Will I end up paying more or less than if I joined a health insurance plan?

• Will I be required to see certain healthcare professionals?

• Does the program partner with any healthcare professionals and facilities where I can access care at discounted rates?

• Can I appeal sharing decisions and, if so, how?

• What protections or guarantees does the program offer its members?

• What happens if the program doesn't pay my bills?

It's important for you to thoroughly read and understand an agreement with a medical cost-sharing program before signing it. You should also be aware that members have filed lawsuits against medical cost-sharing programs in recent years for unpaid medical bills.

Do medical cost-sharing programs cover all healthcare costs?

The Alliance of Health Care Sharing Ministries, a trade organization that represents seven large health sharing programs, reported that its member organizations covered $1.1 billion in medical expenses in 2023. The alliance didn't report how many bills (or how much in total) went unpaid for members, however.

Examples of healthcare services that medical cost-sharing plans typically don't cover include:

• Alcohol use disorder treatments

• Mental health services

• Reproductive healthcare services, including contraception, fertility treatments, and abortions

Medical cost-sharing programs run by Christian organizations generally don't cover healthcare services that clash with the group's outlined lifestyle and religious beliefs. Some programs also have a long waiting period during which members receive limited or zero assistance with medical bills.

Can you lose your membership with a medical cost-sharing program?

Yes, it's possible to lose your membership with a medical cost-sharing plan. Here are some situations in which your membership might be be revoked:

• You've enrolled in a religious cost-sharing program, but your lifestyle or beliefs are no longer aligned.

• You've reached a certain age - such as 65 - and no longer qualify for membership.

• You can't keep up with the monthly payments.

• You use illegal drugs or break other plan rules.

Review a program's guidelines carefully before signing up to make sure they agree with your lifestyle and needs.

Example of healthcare sharing plans

According to the Georgetown University Center on Health Insurance Reforms, here are the largest healthcare sharing plans operating in the U.S.:

• Altrua HealthShare

• Christian Healthcare Ministries

• Medi-Share

• Samaritan Ministries

• Sedera Medical Cost Sharing Community

• Solidarity HealthShare

• Liberty HealthShare

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