Christian Health Co-Ops Cater to 'Obamacare' Opponents

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"There's still health care for people of faith after health care 'reform,' " proclaims a banner ad on the website of Samaritan Ministries , a member-based nonprofit that works like a Christian co-op for health care expenses. The ad is meant to appeal to conservative Christians who are wary about the coming implementation of the federal mandate to purchase individual health insurance. 

press release  from sister organization Christian Care Ministry argues its point more boldly: "11 million Americans Need Not Comply with ObamaCare." 

These aren't gestures of public defiance. The health care law does in fact contain language exempting faith-based groups from the requirement that all Americans be enrolled in a conventional health insurance plan by 2014 or face penalties. The number of Americans who rely on these organizations, called "health care sharing ministries," is currently small — only 100,000 households are members nationwide — but Christian Care Ministry hopes to find an eager market in the 11 million Americans that it estimates profess Christian faith and are not covered by an employer's insurance plan. 

"We are starting to see some growth," says Robert Baldwin, president of Christian Care Ministry. "Our efforts are focused on getting the word out to people that there is an alternative for Christians to Obamacare."

Samaritan Ministries, for its part, just purchased a new three-story headquarters building in Peoria, Illinois, to accommodate the administrative needs of serving a growing membership. Samaritan outpaced its growth projections for 2010 by 50 percent, with a 12 percent overall increase in members. The new headquarters will allow it to serve up to 50,000 households, compared with 17,500 at the moment.

Biblical command

The specifics vary among faith-based organizations, but the concept is the same: Christians can keep down their medical costs while fulfilling the Bible's command to care for fellow-believers. Members exchange more than $60 million annually to help one another cover health expenses, in return for which they must agree to  requirements such as limiting or prohibiting alcohol and tobacco consumption and abstaining from sex outside of marriage.

Under Samaritan's program, members contribute $135 to $320 monthly, depending on the size of their household, and are told whom to send their regular contribution to. A person who has just experienced a significant health expense can collect dozens of checks in a given month. Expenses incurred must exceed $300 to be eligible for reimbursement, so members cover their more modest costs in much the same way they would with a deductible under an insurance plan.

Kari Fox, a 27-year-old registered nurse and mother of two young children in North Carolina, has been a Samaritan member for 15 years and is a strong believer in both the spiritual and financial components of the program. Her mother was diagnosed with a cancerous brain tumor that ultimately took her life in 2007; Samaritan members covered $225,000 in medical expenses. Later, Fox and her family were able to rely on Samaritan members to help pay for the births of her two children and her husband's treatment for skin cancer. In return for their coverage, they pay $320 a month.

The problem, some state insurance commissioners say, is that these unlicensed programs are treated as nonprofits under state law even though they function like insurance companies. The difference is that they offer few consumer protections and little opportunity for legal recourse when members don't have as positive an experience as Kari Fox and her family. 

The National Association of Insurance Commissioners has warned consumers to investigate these organizations before joining. ''Our concern is that families will participate believing that they're purchasing health insurance when in fact what they're purchasing is little more than an aspiration," says Michael McRaith, director of the Illinois Department of Insurance.

Christian Care Ministries is currently prohibited from accepting new members in Illinois because of a cease-and-desist order issued by McRaith's department in response to a court battle over medical expenses not covered when a child was injured in a car accident. A similar situation in Montana has forced Christian Care to withdraw from the state completely, although Samaritan and other sharing ministries are still permitted to accept members there. 

The Kentucky Supreme Court ruled in the fall that Christian Care was pooling the risk of its members and should therefore be treated as regulated insurance under the law — although the implication of this case for Christian Care's ability to operate in the state remains in doubt. Christian Care believes that changes made to its business model and procedures since that case was originally filed will allow it to work out an agreement with insurance regulators in Kentucky. 

Insurance exemptions

Sharing ministries are explicitly exempt from insurance codes in 11 states. Most courts have been hesitant to rule against them in the rare cases where disputes have been brought by members whose health care needs have not been fully met. Faith-based groups and their lobbying arm, the Alliance of Christian Health Care Sharing Ministries, are aggressively pushing to receive exemptions in states where they are not yet in place. "It removes any potential ambiguity for the state directors of insurance," says James Lansberry, executive vice president of Samaritan Ministries and president of the Alliance of Christian Health Care Sharing Ministries.

The organizations are careful to state explicitly in their materials and agreements with members that they are not insurance companies and offer no guarantees to pay for medical expenses. Samaritan Ministries, for example, keeps no cash reserves and covers only a percentage of each need in months when total expenses exceed total demand. Members who lose out this way may receive additional tax-deductible contributions from other members who are informed of their plight and wish to help out by pitching in extra cash. In some cases reimbursement is rolled over to the following month.

Disputes tend to be settled internally among members. Christian Care Ministry allows those who believe they aren't being treated fairly under the membership guidelines to bring disputes before panels of fellow members for final approval or rejection of appeals. "It really is a Biblical principle, where you go to your brothers if you have a disagreement rather than to court," says Baldwin of Christian Care.

Legislation related to health care sharing ministries will be debated this year in at least seven states — Arizona, Georgia, Indiana, Maine, Montana, North Carolina and South Carolina. This is in large part thanks to the growing interest among conservative state legislators in finding workarounds to the federal health care reform law. 

"Rather than just saying no and criticizing," says Indiana state Representative Eric Koch, "I and other state legislators around the country have stepped up and offered other solutions." Koch, a Republican, is sponsoring bills aimed at helping health care sharing ministries become a viable "free-market alternative" to other health care options.

The bills would exempt the organizations from the state's insurance code and offer members tax deductions similar to those offered to employers who cover their employees' traditional health insurance costs. Koch says he's just trying to level the playing field, and modeled his provision after a Missouri law passed in 2007 — the only such law currently on the books in any state. "At the present time, the economic incentives may not exist to make it as attractive as an insurance plan or a public option," says Koch.

Montana state Representative Cary Smith, a Republican who is sponsoring a bill that aims to exempt ministries from the state's insurance code and bring Christian Care Ministry back into the state, says he isn't at all concerned about the absence of licensing and regulation for these organizations. 

"Most of us are big kids who can take care of ourselves," he says. "We don't need our government protecting us all the time. When I saw there was a way to opt out of the federal mandate, I was all for it. That's the way it ought to be done: People caring for other people, not government trying to take care of everybody."

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