Looking for a cheaper alternative to health insurance?

I have a personal finance fail confession to make. I’ve spent the last 10 months without health insurance.

It started with a misunderstanding of Obamacare on my part. I thought I had 3 months or 90 days to get insurance through the Exchange after leaving my last job that provided it. I’m not sure how this magic 90 days entered my mindset other than the fact that you’re not penalized for a 3 month insurance coverage gap while switching jobs – as long as the gap doesn’t exceed 3 months.

HOWEVER, to qualify for insurance outside of the open enrollment period for switching jobs, you have 60 days from your last day of coverage to enroll under the Affordable Care Act.

So… I was s.o.l. when I finally got around to taking care of it. And I pretty much just resigned myself to paying the tax penalty, which I thought was something like $95, but I was also wrong about that too, which is cool. The penalty goes up each year. So I’m looking at either $325 or 2% of my income, which if it winds up being around $20,000 for the year will be $400. You pay the higher fine.

This irritates me…. since being forced to buy anything seems severely unConstitutional to me. But I digress.

Also, upon running the numbers for what insurance would cost me, it was coming out to around $350 a month for a $10,000 deductible at the lowest level of acceptable health care plans. Oh, did you also see how I made about $20,000 this year in the paragraph above? And that was with the health insurance subsidy help.

So while I get not having health care coverage is absolutely like playing Russian Roulette, at least it worked out for the last few months (minus that insanely expensive physical I had to take for a job I did not get).

During the summer, I started looking into approved alternatives to the required health care coverage in an effort to skirt that tax penalty and came across healthcare sharing ministries.

I actually wrote a whole post about what they are over on Femme Frugality’s site, but to sum it up, it’s a Christian ministry where other Christians sign a covenant to live according to Christian principles and everyone pays into this ministry and that money covers all members’ eligible medical bills.

So clearly the Christian thing is a deal breaker for some – but not for me, so I continued to look further into it.

On the one hand, it feels completely insane to sort of throw your money into a pot and hope it all works out, on the other hand… there are quite a few Christians in America. The numbers could work out. I felt even better about it as I learned several people I knew actually got their health care coverage through medical sharing ministries and even a little more interested as I learned that they appeal a lot to the young generation of Christians (although there are still plenty of older ones involved in this as well) – which is about the healthiest subset of the population you’re going to find.

Here’s an important thing to remember though, as you research health care sharing ministries – the way they operate can differ wildly from one to the other. Some have you mail your premium directly to another person in the ministry so that they can pay their medical bills. This… bothered me and felt sketchy and inefficient (although it was also the ministry with the lowest premiums). I opted to go with the ministry that runs theirs like a health insurance company. I pay a premium into the company and the company distributes the money and pays the medical bills themselves. All medical bills are submitted through the ministry.

If you want to look into them for yourself, the two biggest health care sharing ministries right now are Samaritan Ministries and Medi-Share.

Here are a few important aspects to consider:

• You have to agree to live by a biblical lifestyle. No drugs, no sex outside marriage, no smoking and no abuse of alcohol. If you wind up with a medical condition due to any of these things, it will not be covered. You will probably also be asked to leave the ministry.
• This money is not insured or guaranteed in any way. The group is doing it’s best to cover all eligible medical bills. However, at least with Medi-Share (the ministry I chose), 100% of all eligible medical bills have been paid since the inception of the ministry.
• There is still a deductible that has to be paid and monthly payments to be met.
• Some stranger is going to know what’s wrong with you, because you get a notice each month with information about where your portion of your monthly payments went and that person’s medical details. It’s so you can pray for them.
• At least with Medi-Share, you will need to sign a limited Power of Attorney to allow them access to your medical records and the right to share that information with others in the ministry.
• Also with Medi-Share, I had to open an account at a Christian credit union that is part of how Medi-Share processes all their payments.
• With Medi-Share, and the majority of ministries I researched, I had to put down references from my church and/or write up my Christian testimony.

That being said, I’m still happy with how it’s turned out so far, although expect an update after the first time I actually have to use it. My current payments are $185/month with a $2,500 deductible. If I had wanted, I could’ve gone as high as a $10,000 deductible and paid less than $100 a month or as low as $1,000 and my monthly payments would’ve been somewhere around $250.

There was $120 one time, first time fee and a $50 application fee when I applied.

I also like that you can take a Healthy Lifestyle Assessment and if your BMI, cholesterol and blood pressure are within a preset healthy range, you qualify for a further discount… although I think I’m slightly too chubby to qualify right now. That being said, I could work at losing weight and then go do the Assessment; there is no set time of year or only once per year it can be done. I can also change my deductible and monthly payment amounts at any time – so if I wound up out of work, but healthy, I could up it to the $10,000 deductible, pay less monthly and still be covered in case of a catastrophe.

**Edited 11.5.15. So I’ve found there’s a little more to it when I explained how you can change your deductible (or Annual Household Portion) – you can raise your deductible at any time and lower your monthly payments, which takes effect the month following the request. However, if you lower your deductible, it takes 3 months to take effect and it resets the amount you’ve spend for the year towards it back to $0. So if you had a $10,000 deductible and had already spent $8,000 and thought, I’ll just switch to the $1,250 plan now, it will take 3 months to go into effect and at that point, you’d be back at $0 and still have to spend $1,250 before it kicks in. There is also an administrative fee of $75 to change your deductible in either direction with Medi-Share.** 

Health care sharing ministries also fulfill the insurance coverage requirement imposed through the Affordable Care Act as one of the approved exceptions, so you do not need to pay the tax penalty for not having insurance.

Have you found any loopholes that allow you to keep your health care costs down?

 

Clearly from all the personal notes in this post, this is actually my chosen health care method and I am not compensated in any way for this post, but the Medi-Share link above is a referral link, if you’re interested in looking into the Ministry and join, I’d get a small referral fee deducted from my monthly share.