The Colorado Division of Insurance (“DOI”) has alerted consumers in the state to what it characterized as “the risks of health care sharing programs or ministries.”
According to the DOI, these programs may look and sound like insurance, which can entice people to join, thinking that they are getting the full coverage and benefits of health insurance when they're not. The DOI added that these programs even may “mimic the look and feel” of Affordable Care Act (“ACA”) health insurance – “yet they do not offer the benefits of health insurance and certainly do not meet the standards of the ACA.”
The DOI urged consumers to be aware of the following regarding health care sharing programs or ministries.
- They do not comply with the ACA, even if their materials say they do.
- Many sharing ministries specifically state that they do not guarantee payment for any health care and the member ultimately is responsible for anything the ministry does not pay. This language might be buried in the fine print.
- They typically have restrictions or exclusions on pre-existing conditions, leaving the member responsible for the health care costs for those conditions.
- Often such programs do not provide mental health coverage or substance use disorder treatment.
- Members also may be subject to religious or moral restrictions from the sharing ministry, which may leave members responsible for the full costs of health care that results from an activity the ministry does not agree with.
- Health care providers (doctors, hospitals) are under no obligation to accept or honor discounts from these programs if there is no contract or agreement to do so.
“The costs for these health sharing arrangements are low because, when you look closely, they don't cover much,” Colorado's insurance commissioner, Michael Conway, said in a statement. “I'm concerned that people will only discover this when they're at the hospital or when they get a bill for thousands of dollars. Ultimately, health care sharing programs may very well become the subprime mortgages of health care – they look good up front, but there can be serious downsides to these products. I want to caution people so they understand what they are and are not buying.”
The DOI said that these programs are set up to avoid insurance regulation and do not offer people the consumer protections built into insurance. It added that because they “skirt insurance requirements,” they leave people “limited recourse for their complaints or for appealing denials of services or treatments received.”
In recent months Texas, Georgia, New Hampshire, Washington, and Nebraska have issued similar advisories to consumers, and in some cases, have taken action against particular programs.
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Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].