Regulations that went into effect in 2020 made Massachusetts the first and only state to require health care sharing ministries (HCSMs) to regularly report data.
HCSMs are faith-based, nonprofit organizations that offer an alternative to health insurance by allowing individuals in a ministry to help pay for other member’s medical expenses. Some reports appear to indicate growing enrollment trends in HCSMs across the U.S., but this is difficult to verify because until recently there has been minimal, if any, standardized data collection. Several states, including Arkansas, explicitly exempt HCSMs from regulatory oversight.
The Massachusetts Health Connector released a report in September 2021 that offers an initial glimpse into HCSM membership, operations, and finances. All HCSMs reporting to the Health Connector in 2020 and 2021 operated in all or nearly all 50 states. Findings include:
- On average, members paid their HCSMs about 1.8 times the amount the HCSMs paid out for members’ health care bills in 2020 and 1.4 times in 2021.
- Healthcare costs paid for through HCSMs as a percentage of member contributions ranged from 16% to 79% in 2020 and 28% to 100% in 2021.
- Note: The Affordable Care Act requires insurers to pay at least 80% of premiums toward member medical bills.
Massachusetts law requires state residents to have health insurance that meets the state’s minimum creditable coverage (MCC) standards or potentially face a penalty. A resident who obtains coverage through an HCSM is deemed to meet the MCC standards only if the HCSM complies with the state’s reporting requirements.
Massachusetts’ reporting requirements were prompted by an uptick in HCSM participation and complaints against Aliera – a company marketing HCSM plans across the U.S. and in Arkansas – for operating an illegal insurance scheme and misappropriating member funds. To date, several lawsuits have been filed against Aliera for taking “advantage of state and federal health insurance laws by masquerading its insurance plans as faith-based” HCSM plans, including one filed earlier this year by the California Attorney General.
According to the Alliance of Health Care Sharing Ministries, 6,099 Arkansans were members of HCSMs in 2020.