Health Care Sharing Programs, Explained

In this Cancer Care Business Breakthroughs video, John Hennessy, MBA, Valuate Health Consultancy, describes health care sharing programs and why 1.7 million Americans are choosing this option over traditional health insurance.

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Transcript:

John Hennessy: Hi, I'm John Hennessy. I'm a principal at Valuate Health Consultancy, and what we do here is make sure that patients can access the medicines they need.

Health care sharing is an interesting alternative to traditional health insurance. And it kind of sounds new, but it really isn't. I mean, if we can go back into ancient times, when someone had a need, the community met that need or help that person meet that need. And you could go back to, you know, a thing we see in the movies like barn raisings, where the community gets together and help someone build a barn.

Health care sharing ministries or accounts or programs are very much the same thing, where an organization puts together a group of people who've essentially decided to pool their money and use that money to help their neighbors, their friends, pay for their medical expenses.

When you think of health care sharing from a beneficiary standpoint or a participant standpoint, a lot of the language is going to be similar to, or the arrangements are similar to, what we'd see in traditional health insurance. What you might see, language that’s different is this concept called monthly share. And monthly share is what we might think of as a premium or co-premium, where it's what the insured or the member contributes to the bucket of money that is used to pay out for health care expenses. And that monthly share is largely set by the plan or the organization that's put this together, understanding that this organization has the opportunity, because it's not highly regulated, to do medical underwriting and to look at your specific case and, based on what you bring, establish a premium that makes sense to them for the purposes we're using there. I think the other language you hear is something called unshared amount, and we might otherwise think of that as a copayment or a coinsurance.

Often in these plans, because they don't use provider networks a lot of the time, you might find that the unshared amount is less about what we really know, but more about what we do know. In other words, rather than saying your coinsurance is 10%, it may be more of a defined benefit type of option. And they use products like reference-based pricing, which will say for a doctor’s visit, we pay 200% of Medicare. Anything beyond that is what's called an unshared amount.

And while these organizations will help you find providers who are interested in receiving that type of reimbursement and may help you with providers who otherwise don't receive that type of reimbursement, there's a little bit more uncertainty in some of these cases, because you really maybe don't know what that unshared amount is. Where at least in a traditional insurance plan, you have a pretty good sense of what your deductible is, what your coinsurance is, and what your out-of-pocket maximums are.

So, there's a tradeoff here that you're going into a different type of coverage for your health care, which comes with lower premiums, but maybe a little bit more uncertainty as well.

If you're considering health care sharing, you're probably somewhat savvy in health care, because it's not necessarily easy to find these folks. A lot of brokers for small businesses or for individual policies may know about these plans, but you're not going to hear about these things or be offered these plans by the big carriers like Marsh McLennan, Aon, and Towers Perrin.

So, if you found your way to these things, the things you're looking at are, I want a certain level of benefit. But I'm really concerned about the money I put in every month, and I have great faith, and they are largely faith-based groups, that when I need the money it will be available for me. So, I think you have to have a little bit more of a nontraditional, less risk-averse approach to things. But I think you also have to be, you know, conscious of the dollars you spend and where you spend them. So, I think those are the most important things that are involved here.

I think you have to be somewhat active in how you manage your health care to really take advantage of this. The folks I know, who are really smart people, who are participating in these plans are, generally speaking, younger families. They don't have a lot of big health care expenses; they don't anticipate big health care expenses. So, they're very comfortable in an arrangement like this that largely involves spending time with primary care. And what you often see with these plans is something called direct primary care or advanced primary care, which is really heightening access to primary care at potentially an expense to a little bit more uncertainty with specialty care and hospital care. For many of us who have traditional health insurance, we struggle to get access to primary care. So, one thing you may see people focusing on here is really what's important to them is that high level of access to primary care, and to the extent these programs can deliver that, that may make them more attractive to those types of folks.

When you think of health care sharing ministries or health care sharing plans, they're nontraditional. There's no other way to describe it. It can be used to meet ACA coverage requirements. I think, for small employers or mom-and-pop shops where you really just worry about insuring the owner and the owner's family, I think those sorts of things make lots of sense, but I think you have to understand what the limitations are. The plans are not highly regulated, and there are good players and bad players in every business. I think that the downside here is that if you do get stuck with a bad player, there's not a lot of things you can do to sort of, to repair that.

And we know that a lot of folks in even traditional health plans get saddled with a lot of medical debt and a lot of challenges there. There's an element of risk here—and it's not zero, it's not a hundred. But there's an element of risk here that I think is really important. I think if you come into these plans with preexisting conditions, you should expect that there'll be limitations in coverage here, and I can't tell you that that's always as transparent as it should be. But I know that when we hear of people who struggle with these plans, that's one of the things they talk about. And I think when they talk about coverage, it's not necessarily the type of coverage you're used to.

A lot of times what happens is you have to pay the bill and then the other members of the sharing ministry, the sharing plan, write you checks. And you're sort of sitting at your desk when a bunch of checks show up in the mail, and you’ve got to endorse all the checks and send them in. So, transactionally it can be much more challenging. But if this is something that’s really important to you, I get it. I get why folks who are looking to save money on their premiums and don't access a whole lot of things in their health care might look at this as it's very attractive. I think when it starts getting into more special needs or deeper needs or chronic care needs, the plans can be a little bit more challenging for the folks who are members. I think that when you start looking at specially medications particularly, which can be very costly, the transactions around that sort of writing a check for a $10,000 a month medication and waiting for the sharing funds to come back to you from your partners in the ministry, I can imagine that can be very difficult for some folks.

So, it's not for everybody but for about 1.7 million Americans, they've made this their plan of choice. And while I guess you can say from a regulatory standpoint, they're uninsured, it's not like they don't have access to health care. They just have it very differently than most of us are used to.

I think that health care sharing ministries, health care sharing plans, aren't going anywhere. I think they're growing, in fact, because I think it does appeal to a subset of the population that either doesn't feel comfortable with traditional insurance plan or doesn't feel comfortable with the premium levels that are involved there but doesn't want to be uninsured in the traditional sense.

So, I think we're going to continue to see people join these plans. I think, from an access to care standpoint, there are going to be challenges when they don't have a network, when they're trying to access very expensive medications and don't have a health plan intermediary who's negotiating price or negotiating payment terms for them. But if I'm a manufacturer, if I'm a provider, I need to recognize that this is a segment of the population that I need to serve. I serve my entire community. And just because someone has made a choice like that doesn't mean I say, well, I don't include you. We ought to be inclusive in the delivery of health care. So, understanding what these programs are, understanding the limitations and making sure that as providers and manufacturers, we are providing the sort of assistance that makes sense for these folks.

And I understand that sometimes it may not feel like it, but at the end of the day we've got folks out here who have needs for the types of therapies, the types of procedures that we can offer that can change their lives. Figuring out how to do that within the varying mechanisms of financing health care, I think, is one of the great challenges we'll face in the next few years.