Health Care Sharing Ministries, or HCSMs, are HealthShares with specific religious affiliations that often have stringent religious requirements for membership. While all HCSMs are HealthShares, not all HealthShares are HCSMs. Sedera and Zion HealthShare, for instance, are HealthShares with no religious affiliation nor religious requirements for membership. That being said, some sources still refer to all HealthShares as HCSMs. One example is the Alliance of Health Care Sharing Ministries, which advocates for the legitimacy of HCSMs but also stands to benefit the HealthShare industry as a whole.
The HealthShare industry is relatively new, and is not as closely regulated as the insurance industry. Because of rapid growth, fewer regulations, and the public’s unfamiliarity with the industry, HealthShares pose certain risks that are important to consider.
Read below to learn more about the risks HealthShares may pose.
HealthShares may cause health insurance companies to raise their premiums
According to a report by the Commonwealth Fund, HealthShares’ low up-front costs and affordable monthly contributions may pose a risk to health insurance companies.
Since HealthShares are a better deal for many (especially younger, healthier individuals), there is a risk that as HealthShares’ communities grow, insurance companies’ population pools will get progressively older and sicker on average, leading to higher premiums and overall costs for their policy holders.
Many HealthShares’ guidelines are designed to keep monthly contributions low. Insurance companies are subject to additional regulations that prevent them from choosing what they cover the way HealthShares choose what they share, causing many of them to raise premiums each year to keep up with increasing expenses.
HealthShares aren’t just an attractive option for younger, healthier individuals, there are membership options that share in a variety of services and treatments. While some membership options are designed to only share in major medical expenses—great for younger, healthier individuals—there are also membership options with more extensive sharing that could benefit a greater variety of individuals and families. There are even some memberships that cater specifically to seniors with Medicare Parts A and B.
HealthShares limit sharing for pre-existing conditions
The Commonwealth Fund report also points out what it considers some risks that HealthShares pose, one of them being that HealthShares’ sharing for pre-existing conditions “may be limited or excluded.” This is only partly true: most HealthShares institute waiting periods before many pre-existing conditions may be fully or partially shared by the community. However, some HealthShares do exclude certain pre-existing conditions from ever being shared. They do this in part to keep monthly contributions lower for their members and because HealthShares, unlike insurance companies, are monthly, rather than annual, commitments.
HealthShares may be confused for health insurance
The report also says that while HealthShares provide value for some, they “also have the potential to create confusion for others, as they closely mimic traditional insurance products, but do not provide the same consumer protections.”
All legitimate HealthShares will be quick to remind members that they are not health insurance and should not be treated as such. It is important to know that HealthShare membership is not insurance, and there are differences between what insurance can be expected to cover and HealthShares can be expected to share. To learn what makes HealthShares different than health insurance, check out our blog on the topic. If a HealthShare deceives members into joining by pretending to offer health insurance, then they are bad actors and should be avoided.
This discussion of risks applies mostly to the HealthShare and health insurance industries rather than the consumer. The benefits HealthShares provide to their consumers, including reduced monthly costs, sharing for major medical incidents, and the flexibility of an open network, are also well worth considering. It is important to know what HealthShares do best, and where they are more limited in order to get the most out of a HealthShare membership.
Check out our blog on the pros and cons of being a HealthShare member to learn more about the member experience.