The Texas Medical Association (TMA) recently issued a warning to consumers about health care sharing ministries (HCSMs), noting that this form of coverage could leave them with “unpaid medical bills or without coverage when they really need it.” The warning was prompted by an increased number of calls to TMA with concerns about these coverage arrangements.
The increased number of calls is not surprising. As CHIR followers know, we recently issued a report documenting observations from insurance brokers about the state of the individual market. Most brokers, including several in Texas, have observed that the HCSMs are ramping up their marketing efforts and their enrollment has been growing accordingly. Our report found:
- Many HCSMs are paying brokers commissions that are higher than what they receive for traditional medical insurance.
- Many HCSMs are offering brokers training sessions to educate them about the coverage and to encourage them to offer HCSM memberships to consumers.
- HCSMs are investing in direct-to-consumer marketing, including radio, TV, and billboard advertising.
For more on what brokers are observing in the individual market, read our full report here.
What’s an HCSM, and why might it pose a risk to consumers, you say? CHIR is so glad you asked, because we recently released a report documenting our review of 50 state laws governing HCSMs and the results of interviews with state insurance officials about how they’re regulated. We found:
- HCSMs are a form of coverage in which members, usually of the same religion, make monthly payments to cover the health care expenses of other members.
- HCSMs are exempt from Affordable Care Act (ACA) and most state insurance rules, and enrollees are exempt from the ACA’s individual mandate.
- HCSMs are generally not regulated by state insurance departments, raising risks for consumers if they have a problem getting a bill paid or services covered.
- Although state insurance regulators have numerous concerns about the risks associated with HCSMs, they have little data about enrollment in these arrangements or the types of coverage offered.
To learn more about HCSMs, you can download our full report here.