Medi-Share is a creation of God, rather than a creation of law. The concept of Medi-Share is the brainchild of Dr. E John Reinhold, who founded the first Medi-Share offering. It has its origins in Galatians 6:2, an admonition, telling the faithful to carry each other’s burdens if they wish to fulfill Christ’s law. In its simplest form, Medi-Share is the sharing of medical expenses by the community. This community approach to healthcare is governed by member-voted guidelines, detailing how the sharing of medical expenses is facilitated, along with the requirements for membership. There are several Medi-Share programs available to the consumer; for this report, the original Medi-Share, the inspiration for the subsequent offerings, Christian Care has been considered representative of all similar programs. The first part of this report outlines the community governance, model of operation, and requirements of Medi-Share membership, while the second part of the report considers the position of Medi-Share from a legal standpoint, incorporating information regarding the impact of legal and political change on Medi-Share.
COMMUNITY GOVERNANCE AND PROGRAM REQUIREMENT
- Medi-Shareis not health insurance. It is a health sharing ministry, which is administered by a non-profit organization, such as the Christian Care Ministry.
- As indicated, Christian Care has been considered representative of Medi-Share for this report.
- Medi-Share is governed by the guidelines in place when the member received their medical treatment. The guidelines are considered the authority regarding the manner in which Medi-Share operates. However, the guidelines are not set in stone, and each member has the opportunity to vote on them at least once a year, with significant changes requiring a 67% majority.
- The Medi-Share Steering Committee can modify the guidelines on behalf of the members as long as the changes do not entail major restrictions or relaxations.
- The Medi-Share Board of Directors has the principle role of strengthening the Medi-Share an ensuring the members are protected. They can make proposals for amendments, which are then voted on by the members. The change will be enacted temporarily until members have the chance to vote on whether it becomes a permanent amendment to the guidelines.
- Medi-Share is a group of like-minded individuals who have committed to living in accordance with Christian principles, as set out in the bible. This is the cornerstone of Medi-Share, providing members with the assurance their money is being used in a manner aligned with their beliefs.
- It is a requirement of membership individuals have a personal relationship with the Lord Jesus Christ. Each member must profess to this relationship by way of the Statement of Faith, which is set out in full in the guidelines.
- All members must maintain a healthy lifestyle to minimize medical costs. This includes:
- Those members that carry a higher risk for certain conditions may be required to become health partners. Health Partners are given access to online content and health coaching to reduce the likelihood of major disease. A personalized plan is developed for each health partner. Health partners are required to pay a monthly fee in addition to their monthly-share payment.
- To be eligible for Medi-Share, a person must be a legal resident of the US.
- The amount of the share is determined by the age of the oldest member of the member household.
Medi-Share Is Not Insurance
- The guidelines are very clear that Medi-Share is not a substitute for insurance mandated by law. However, it can be used as an exemption or substitute for mandated insurance coverage in two circumstances. The circumstances are as follows:
- There are no other exceptions.
Annual Household Portion
- Each family’s medical care is determined by the annual household portion (AHP). The AHP is defined as the dollar amount that a member household agrees to pay towards other member’s medical expenses before they become eligible for their household medical expenses to be shared.
- The AHP determines the medical expenses eligible for sharing.
- Health incentives, by way of a decreased AHP, reward members for making healthy decisions. Should a member develop a lifestyle-related condition, the health incentive will be reversed. The same applies to significant weight gain.
- Members must contribute $35 for each doctor visit and $200 for each emergency room visit over and above their AHP.
Preferred Provider Organization
- Members are encouraged to use preferred provider organizations (PPO) for their healthcare needs wherever possible, as discounts have been negotiated with these providers. Specialty medications or treatments need to be organized through Medi-Share.
- There are various rules applied to non-PPOs and multiple ways of calculating the portion of the billed amount eligible for Medi-Share. Generally, the member is responsible for the difference between the billed amount and the PPO discounted amount.
- Each Medi-Share has a list of approved treatments, medications, facilities, and providers that have been pre-approved. These expenses are considered for sharing, once submitted on the required form. As long as pre-notification is not required, its eligibility is determined once the account is rendered. Medical and lifestyle information is then submitted, along with up to 36 months medical records. If access to medical records is not provided, the account is ineligible for sharing.
- For those over 65, Medi-Share is secondary to Medicare, with the difference considered for sharing.
- There are a range of rules relating to pre-existing conditions, and their eligibility for sharing.
- In line with the Christian principles that underlie Medi-Share, conditions that are ineligible for care stem from non-adherence to these principles, including:
- Other ineligibilites include:
Motor Vehicle Accidents
- In accounts incurred as a result of motor vehicle accidents, the ineligibilities are similar to traditional health insurance.
Death of a Member
- A portion of the expenses relating to the death are eligible for sharing.
- The similarities between Medi-Share and traditional health insurance are plain to see. Given, health insurance is regulated by the government, the obvious question must be, what is the legal status of Medi-Share.
- To understand the legal status of Medi-Share, it is necessary to go back to its origins as a church mission, and because Medi-Share is a church mission, it is essentially beyond the reach of the law. For many, this has become increasingly difficult to understand, especially when the numbers are considered. Over 19,000 American households are members of a Medi-Share community. By 2006, the ministry had paid over $240 million in medical expenses since it started; $57 million moved through its books in the 2005 fiscal year.
- As the popularity of the concept grew in the early 1990s, several states passed legislation exempting religious organizations sharing expenses from state insurance laws. The First Amendment provided the foundation for the exemption, with any restrictions considered a breach of the right to freedom of religion.
Kentucky Cases and Beyond
- As religious organizations started expanding their portfolios beyond their traditional core activities, questions began to be asked regarding the special status being given to activities such as Medi-Share, which for all intent and purpose seemed to be acting as an unregulated insurer. Other non-profit organizations were not afforded the same freedoms as those of religious organizations.
- The IRS, for example, has several special rules that apply to non-profit religious organizations. One of these rules says that religious organizations are not required to file public financial statements with the IRS. This applies to all activities of the religious organization, including Medi-Share. Within these protections are limitations on the ability of the IRS to audit the activities of religious institutions.
- To many government officials, the limitations they faced when dealing with Medi-Share were causing increasing disquiet. Challenges to the protected status of Meid-Share were filed in various state courts, among them Kentucky.
- The argument in response from Medi-Share agreements is it is not a substitute for health insurance, and any payment of medical bills is entirely voluntarily.. It was a telling fact that the way members money was accounted for was changed in the lead up to the period of increased scrutiny. The changes meant that members’ money was no longer treated as a liability in the accounts.
- Part of the Medi-Care offered by Vhristian Care saw the organization purchase stop-loss insurance through an affiliated trust in the British Virgin Islands. The same trust was also responsible for receiving member funds. This drew the attention of Kentucky Office of Insurance, the insurance policy seemingly moving the Medi-Share agreement outside of the protective veil afforded religious organizations.
- The Kentucky State Insurance Office filed suit claiming Christian Care was acting outside of the religious exemption. The agency had “concerns that some Christians might mistakenly believe they were paying into an insurance plan that guarantees coverage if they’re hospitalized when Medi-Share offered no such guarantee.”
- Several years after the case was filed, a Judge in Kentucky ordered Christian Care “to cease all operations in Kentucky unless and until it received a certificate of authority or other applicable license from the Department of Insurance.” One of the factors contributing to this finding was Christian Cares requirement, members pay the money into a centralized account rather than to the recipients directly. Something Christian Care changed, in an attempt to avoid regulation.
- This ruling came a year after the Supreme Court of Kentucky had ruled “MediShare is an insurance company and is not allowed religious exemptions to state law.” Medi-Share had continued to operate following the ruling, which promoted the subsequent order.
- A similar lawsuit in Montana saw Christian Care locked out of the state for nearly ten years until a new insurance commissioner allowed them back. Other states took a similar stance. Medi-Share was forced to make changes to its operations. As a result, they can operate in all 50 states as a medical expense sharing operation, not an insurance company. The organization and others like it, the number of which has continued to proliferate, continue to face increased scrutiny of their activities, with many continuing to view them as unregulated insurance companies.
- In total, 43 states investigated Medi-Share programs. Medi-Share continues to be afforded the privileges attached to a religious organization in all 50 states, sometimes to the ire of officials who maintain the company is in reality an insurance company.
Affordable Healthcare Act
- Political changes go hand in hand with legislative changes, as was the case with the Affordable Healthcare Act when President Obama came into office. Medical expense sharing organizations are exempt from the individual mandate of the Affordable Healthcare Act, requiring the purchase of healthcare. This saw an increased uptake of Medi-Share, at the expense of traditional insurance.
- Medi-Share ministries certainly looked to take advantage of the exemption they were afforded under Obamacare, with advertising and marketing increasing considerable in the lead up to the introduction of the new legislation.
- The marketing pushes the message, “It isn’t insurance; it’s a nationwide network of Christians who save money by sharing each other’s medical bills. We get to pick our own doctors, and our share is almost 40 percent less than our old premium.”
The Trump Era
- The popularity of Medi-Share has continued to grow throughout the Trump administration, as the cost of medical care has continued to rise. Many Medi-Share providers are marketing themselves as a more affordable alternative to health insurance, casting a shadow over claims they are not offering insurance.
- The loosening of regulations associated with affordable healthcare have allowed alternative solutions to healthcare to flourish. The reality is the coverage is a lot narrower than that offered by insurance providers.
- This has seen the number of complaints relating to Medi-Share increase substantially, and has no doubt alerted officials to ongoing issues with the program.
The Coming Presidential Elections
- A Trump win is unlikely to have a significant impact on Medi-Share with the focus on moving away from regulation.
- Biden has campaigned on providing healthcare at a lower cost to those on low incomes. This has potential to entice people back to traditional insurance, whether it does will depend on the extent of savings to be made. The increasing number of complaints against various Medi-Share operators could force some regulation, although nothing has been suggested to date.
- Clearly political changes have the potential to impact on Medi-Share. Medi-Share is immune to legislative changes to a large degree, as long as its exempt status is maintained.