That’s a big problem for public policymakers, and for the health insurance industry: A large proportion of total healthcare costs are directly or indirectly attributable to poor lifestyle decisions and failure to manage chronic healthcare conditions.
Health Sharing Plans
These combine to create massive costs for the healthcare industry as a whole. And they inevitably wind up reflected in health insurance premiums.
If you’re health-conscious and generally taking reasonably good care of yourself, you don’t want to be stuck in their risk pool. Not if you can help it.
Because traditional health insurance plans are required by law to take on all comers, regardless of pre-existing conditions and regardless of their lifestyle choices, health insurance requires health-conscious, responsible people to subsidize the irresponsible.
And that’s why many thousands of healthy, responsible, health-conscious people are choosing to opt-out of the unfair health insurance system, and choosing health sharing instead.
The Financial Impact of Lifestyle Choices
Bad decision-making costs billions.
Let’s look at the most obvious example: Smoking.
By now, there is no excuse for not being aware of the long-term risks of smoking tobacco – or anything else, for that matter.
But millions of people continue to smoke… and they continue to join health insurance risk pools and force more responsible fellow policyholders to shoulder the burden.
The Centers for Disease Control reports that smoking-related illness in the United States costs more than $300 billion each year. That includes nearly $170 billion each year in direct medical care for adults.
Similarly, the estimated healthcare costs of obesity-related illness are a staggering $173 billion each year.
Heart disease and strokes are highly correlated with poor lifestyle choices. These two causes cost some $217 billion per year in direct healthcare costs. That’s on top of about $147 billion per year in lost workplace productivity.
About 37 million Americans are diagnosed with diabetes. Left unmanaged, diabetes causes blindness, kidney failure, and limb amputation.
Diabetes accounts for about 1 out of every 4 dollars in healthcare spending nationwide – including about $237 billion in direct care costs.
On average, individuals diagnosed with diabetes cost about $16,750 per year in medical treatment – $9,600 of which is directly attributable to the disease. That’s 2.3 times more than the general population.
Substance abuse disorders, including both alcohol and drug addiction, account for another $35.3 billion in direct medical costs alone.
It’s easy to see how lifestyle choices can be significant contributors to chronic diseases, and impact the rising costs of healthcare.
It’s also easy to see how responsible people who make good lifestyle choices are forced to subsidize the poor choices of others.
These costs get factored into the premiums of traditional health insurance, leading to higher rates for everyone, regardless of their individual health and lifestyle choices.
The High Costs of Traditional Health Insurance
Traditional health insurance policies are designed to take all comers.
By law, health insurance companies must provide coverage for everyone who joins during the open or special enrollment periods. They can’t exclude smokers, drug addicts, people who don’t exercise or eat well, or those with any number of pre-existing medical conditions.
Insurance policies are also required to offer benefits such as smoking cessation and drug addiction and rehab programs.
These benefits increase premium costs for everyone. But they provide no value for people who don’t smoke or use alcohol or drugs.
For those who are in good health, and who are willing to commit to a healthy lifestyle, health sharing offers a way to opt out of the expensive traditional health insurance system.
Click Here to Learn More About Health Sharing Plans in Colorado
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The Appeal of Health Sharing Plans
Health sharing plans are an attractive, affordable non-insurance alternative for millions.
Unlike traditional health insurance plans, health sharing plans aren’t required to take on obvious poor risks. While most health sharing plans are willing to consider people with pre-existing conditions, they will typically exclude costs directly related to these pre-existing conditions from their sharing benefits for a number of years.
And most will exclude smokers altogether. The few that don’t require smokers to pay an additional monthly surcharge, limit cost sharing benefits, or both – all to keep monthly costs reasonable for other non-smoking plan members.
Furthermore, most health sharing plans do not share costs related to drug and alcohol addiction, except possibly for minor dependents of plan members. Generally, health sharing plans require their members to affirm upon joining that they do not and will not consume illegal drugs or engage in alcohol abuse.
As a result, the people who join health sharing plans tend to be much healthier and more health conscious than the broader population, and more health conscious than the typical member of a traditional health insurance risk pool.
This creates a powerful cost structure advantage for health sharing plans. Typically, most individuals or families can join a health sharing plan for 40% to 50% less than the cost of a traditional health insurance policy before accounting for the Affordable Care Act subsidy.
Key Benefits of Health Sharing Plans
- Lower Costs. Since health sharing plans are not obligated to cover high-risk lifestyles or a broad spectrum of medical issues, you can join one for a much lower monthly cost compared to an unsubsidized traditional health insurance premium.
- Choose your own doctor. Unlike most traditional “Obamacare” health insurance products, health sharing plans generally do not restrict you to using a narrow network of physicians. Instead, most health sharing plans allow you to use their plan with any provider you choose – anywhere in the country.
- Community Focus. Health sharing plans often emphasize preventive care and healthy living for everyone in the group.
- Flexibility. Members can often negotiate medical costs directly with providers as cash-pay patients, potentially leading to further savings. Health share organizations usually have a “concierge desk,” which can help members shop around and negotiate prices. This reduces costs for both the individual member and the plan alike.
Learn More: Which Health Sharing Plans in Colorado Allow You to See Any Doctor?
Health Sharing Plan Considerations:
- Waiting Periods: Health sharing plans generally have waiting periods for pre-existing conditions and surgeries.
- Surgical exclusions. Most health sharing plans will not share costs related to surgeries for a set period of time after the plan becomes effective. 90 days is a common surgical exclusion period, though most plans will make exceptions for costs related to accidents that could not reasonably have been foreseen as of the plan effective date.
- Maternity benefits. Some health share plans – particularly faith-based health sharing ministries – will restrict sharing for maternity or childbirth costs to married couples where both people in the couple are plan members. They also typically only share costs for pregnancies that begin after the plan’s effective date. They don’t share maternity or childbirth costs for those who join the plan already pregnant.
- Prescription drug benefits. Most health sharing plans do not provide direct coverage for prescription drugs. However, they typically use their significant purchasing power to negotiate steep discounts with pharmacies and drug manufacturers. This benefit is particularly significant with generic drugs. However, it’s less powerful for drugs that are still under patent (“brand name” drugs).
In each case, specifics vary by plan. It’s important to check your plan’s published guidelines for specifics on how the plan shares medical costs, and what exclusions they may have.
Learn More: Health Share Maternity Benefits (From Our Newsletter)
Comparing Available Health Sharing Plans
The enrollment requirements for each health sharing plan vary, so it’s important to carefully research your options.
Here’s a closer look at some of the differences you may find between popular plans. You can click on the link for more information. And if you like what you see, you can even get a free quote and enroll directly online in minutes at the link.
- HSA SECURE
- Available to business owners, independent contractors, and self-employed individuals only
- Tobacco users have additional costs, and there may be limits on what can be covered
- Altrua Health Share
- Doesn’t require a physical health screening, but does require an online application with a personal medical history
- Members must adhere to certain standards that include a commitment to good nutrition, and promise not to use tobacco and illicit drugs
- Offers coverage for maternity costs after a waiting period
- Medi-Share
- Requires members to complete a non-denominational Statement of Faith
- Members must make healthy lifestyle commitments
- Costs depend on age, location, and the number of people enrolled
- netWell
- Imposes a two-year restriction on sharing for pre-existing conditions
- Accepts smokers with an additional monthly cost
- Offers excellent maternity and childbirth benefits
- Is not available in several states including Massachusetts, Maryland, and Washington
- OneShare Health
- Offers immediate eligibility for accidents, injuries, or acute illnesses, with a 90-day waiting period for other medical expenses
- Two-year waiting period for pre-existing conditions
- Not available in several states including Maryland, Massachusetts, and Pennsylvania
Each health sharing plan comes with its own set of requirements and limitations. But in general, the more committed the members are to living a healthy lifestyle, the better the benefits, and the lower the overall costs.
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Making an Informed Decision
It’s important to weigh the pros and cons of each health sharing plan against your personal needs and values.
While they may not be suitable for everyone, these plans can be an excellent option for those already committed to leading a healthy lifestyle.
Connect with an expert ColoHealth Personal Benefits Manager to learn more, and find the best health sharing plan for you!
For Further Reading: The Best Colorado Health Plans for Families | The ColoHealth Guide to the Best Health Share Plans in Colorado |Comparing Christian Health Share Ministries in Colorado |Myths and Misconceptions about Health Sharing: What the Mainstream Media Gets Wrong
Wiley Long is the president of ColoHealth, and has been in the health insurance industry since 1987. He received his master’s degree in nutrition and exercise science at Colorado State University, and is passionate about individual healthcare freedom. Read more about Wiley on his Bio page.
