Moving from a corporate role to independent consulting comes with a lot of challenges but the only one that seems to make people really pause is buying private health insurance. Along with the variety of options the cost itself often feels overwhelming. The cost of private health insurance has led to a rise in popularity in Medical Cost Sharing Programs, commonly known as Medishare, as a possible alternative to traditional health insurance. This guide explores how Medishare programs work, the potential risks of Medical Cost Sharing Programs, and how to find and utilize these programs effectively.

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How Medishare Programs Work:

Medishare programs operate on a principle of mutual aid, where members contribute monthly "shares" that are pooled together to cover medical expenses. Members submit eligible medical expenses for sharing, and the program facilitates the distribution of funds to cover these costs.

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Medical Cost Sharing Programs aren’t new but became more popular with the passage of the Affordable Care Act and, specifically, the shared responsibility provisions that required having health coverage to avoid an additional tax. 

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It’s vital to note, that while Medishare programs boomed since they provided qualifying coverage to avoid the shared responsibility fees they are not, in fact, insurance. The risk-pooling used by Medical Cost Sharing Programs mimics the most basic ideas of insurance policies (group contributions paid out over time to protect against losses for exceptional events) but they are not contractually or legally obligated to pay out any specific benefits. More information on what risks this might pose for your family below.

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Medishare as Christian Health Insurance:

Religious groups have made the largest move toward Medical Cost Sharing Programs. Sometimes called “Christian Health Insurance”, many Medishare programs require members to adhere to specific religious beliefs and lifestyle standards. These programs in particular often require no tobacco usage, limited alcohol use, active church memberships, and lifestyle guidelines around physical and sexual health. 

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These same restrictions in coverage and qualifications may actually serve as additional draw for using Medishare as a form of Christian Health Insurance as the organization may restrict the types of treatments, procedures or causal factors that it covers in order to align with religious beliefs (IE if you are injured because you drove while drunk they may reserve the right to deny your request to share costs)

Medishare Programs for Non-Christians:

It’s true that the most common offerings for Medical Cost Sharing Programs are marketed toward Christians but while some Medishare programs maintain a strong religious foundation, there are options available that do not require adherence to specific faith-based principles. Even among the faith-based programs the requirements to participate will vary from a verified church membership to a simple statement of faith.

Secular Health Sharing Programs / Non-Christian Medishare are functionally the same as their Christian counterparts but may have more inclusive eligibility criteria, making them accessible to individuals from diverse religious backgrounds or those who do not identify with any particular faith. Of note, Secular Medical Cost Sharing Programs generally maintain similar restrictions on lifestyle (i.e. limited or no tobacco usage) but the removal of the statement of faith will broaden the pool of membership.

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Medishare Programs for Business Owners:

The most common concern I hear from specialists considering leaving corporate roles is maintaining health insurance coverage. Business Owners considering Medical Cost Sharing Programs should carefully consider the following:

1. Medishare programs likely restrict cost sharing for any pre-existing conditions
2. Medishare programs are not insurance and are not required to pay any bills and cannot be legally compelled to pay any bills
3. While medical cost sharing programs satisfied the ACA requirements for obtaining coverage they are not insurance and therefore do not qualify for the Self-Employed Health Insurance Deduction. For self-employed individuals not eligible to be covered by a spouse’s coverage, health insurance premiums are a deductible expense. This effectively lowers the cost of health insurance for a business owner. While a cost-sharing program is likely cheaper on a dollar basis it’s possible that business owners will prefer the coverage and security of a traditional insurance and enjoy the associated tax deduction.

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The Dangers and Risks of Medishare Programs:

While Medishare programs offer potential benefits, it's essential to understand the risks involved. Since these programs are not regulated as insurance, they are not subject to the same consumer protections and oversight. Pre-existing conditions may not be covered, and there may be limitations or exclusions for certain medical treatments. Additionally, there's a risk of funds being insufficient to cover all medical expenses, especially in cases of high-cost treatments or catastrophic events.

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A careful review of any agreement with a Medical Cost Sharing Program will reveal language clearly stating these plans are not insurance and that the program and members can’t be legally compelled and aren’t required to pay any given bill. In essence, these programs rely on a good-faith promise to try. Cost Sharing Programs failing to pay members expenses is not without precedent.

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Additionally, since members are technically self-pay patients they are responsible for the full cost of their own medical bills. This can create cash flow challenges when a bill is created at the time of a medical visit (because no insurance is billed you likely receive your bill faster) for which the member is totally responsible but the health sharing program may take 6 months or more to offer a reimbursement for the expenses.

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How to Find and Use a Medishare Program:

While a Medishare Program will expose you to certain risks due to how they are constructed, if you consider a Medishare program, you should thoroughly research and compare different options to find the best fit for their needs. Factors to consider include monthly share amounts, eligibility criteria, coverage limitations, and the program's track record for reliability and financial stability. Once enrolled, members should familiarize themselves with the program's guidelines for submitting medical expenses and understanding the sharing process.

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The Medical Cost Sharing Market is not terribly big. Here are the main options available:

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Christian Medical Cost Sharing Plans AKA “Christian Health Insurance”

• Christian Health Ministries
• Samaritan Ministries
• Liberty HealthShares
• OneShare HealthShare
• Medi-Share
• Altrua HealthShare

Secular Medical Cost Sharing Plans

• Sedera
• Zion Health

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Generally, the process for using a medical cost sharing program will be:

1. Review the options for medical providers and their expenses
2. Engage medical provider as a self pay patient 
3. Attempt to negotiate maximum self pay / cash discount
4. Negotiate expenses, review bills, review financial aid options from medical providers
5. Pay any required payments to your medical provider (remember, you are personally responsible for all medical bills
6. Submit any required records of medical bills, payments, and negotiated discounts to your health sharing program
7. Wait 3-6 months for expense reimbursements. 

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Navigating health insurance options as a specialist transitioning to independent consulting can be daunting. By understanding how Medishare programs work, their suitability for different demographics, potential risks, and how to find and utilize them effectively, you will have the best chance to make the right decision for yourself and your family.

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