The ColoHealth Health & Wealth Newsletter
October 2023
Vol. 13, Issue 13
The Health Share Advantage—Who Should
Make the Switch
For years, health sharing has been a niche alternative to traditional health insurance approaches.
And for most readers who qualify for a significant subsidy under the Affordable Care Act, health insurance is still a great option.
However, some people reading this may be better off dropping health insurance and choosing a health sharing plan. This may apply to you if you have had a recent increase in your income, decrease in the size of your household, or both.
Either of these events can affect your eligibility for a subsidy under the Affordable Care Act – causing your subsidy to fall or even disappear entirely.
If this has happened to you, or you expect your taxable income in 2024 will be much greater than in 2023, a health sharing plan may be a more attractive option.
Background
Historically, health sharing has been associated with faith-based groups and historically not well understood outside these communities.
But today, health sharing is enjoying a renaissance in popularity – much of it fueled by the insane inflation in health insurance premiums since the passage of the not-so-aptly-named “Affordable Care Act.”
The ACA promised to make health insurance more affordable and accessible for Americans. But if you’re one of the millions of people who got left behind by the Affordable Care Act and its arcane subsidies, health insurance has become much less affordable over the last decade.
Currently, it costs more than $22,000 per year, on average, to insure a family of four under an unsubsidized ACA-qualified Marketplace plan, according to the Kaiser Family Foundation.
That’s unconscionable.
And the vast majority of these Obamacare-style health insurance plans are HMOs and PPOs that don’t even let you choose your own doctor!
The combination of sky-high, unaffordable premiums and deductibles and the lack of healthcare freedom in traditional health insurance is fueling a massive increase in the popularity of health sharing plans.
In fact, according to the Colorado Insurance Department, as many as 1 in 4 Colorado families who don’t get their insurance from an employer are opting for health sharing plans over traditional health insurance.
This article will explore the advantages of health sharing as well as the advantages of traditional health insurance – and tell you whether you would likely benefit by dropping health insurance altogether and switching to health sharing.
What is Health Sharing?
Health sharing, often referred to as medical cost-sharing or healthcare sharing, offers a more affordable and flexible alternative to the traditional health insurance model.
It is not health insurance and should not be confused with insurance. While health sharing serves a similar purpose in spreading the risk of high medical expenses among large numbers of people, it operates quite differently than health insurance.
In essence, health share organizations are voluntary associations of like-minded individuals who come together to share the financial burden of high medical costs.
Many healthshare organizations are faith-based communities. But many others are non-denominational or completely secular. However, all of them generally require that members pursue reasonably healthy lifestyles and refrain from alcohol abuse, illegal drugs, and other self-destructive behaviors.
This contributes to their lower cost structure and better affordability compared to health insurance without a subsidy.
Health sharing may be a good match for you if you are in generally good health, and you want to be part of a community of health-conscious people who help to shoulder the financial burden of your fellow members in need.
Do You Qualify for a Subsidy?
If you still qualify for a significant subsidy under the Affordable Care Act, then health insurance may still be a very good deal for you.
Especially if you don’t mind not being able to choose your doctor. More on that in a minute.
However, if you don’t qualify for a subsidy, and you’re in good health with no major pre-existing conditions, you should consider making the switch to health sharing.
Why? Because if you don’t get a big subsidy under the Affordable Care Act, the average monthly cost of a health sharing membership is up to 50% less than traditional health insurance premiums.
By switching to health sharing, you can realistically save hundreds of dollars per month, and as much as $11,000 per year and more for a family of four.
Freedom to Choose Your Healthcare Provider
Do you want the freedom to choose your own doctor, clinic, hospital, and other care providers?
Then you should consider switching to health sharing.
Most traditional insurance plans available over the health insurance exchanges are HMOs, PPOs, and EPOs. Each of these plan types restricts you to seeing providers in their narrow-authorized network.
In contrast, most health sharing plans give you much more freedom to seek out any provider you wish.
People who are willing to do a bit of research can often find vastly superior care providers than those in an HMO’s network of lowest bidders.
And you won’t have to worry about “surprise” bills and accidentally going “out of network.”
Health sharing lets you continue seeing the doctors you trust and have built relationships with over the years. This flexibility ensures you receive the care you need, where you want it, without the frustration of navigating complicated networks.
Pre-existing Conditions and Waiting Periods
This is one area where health insurance has a big advantage for many people.
By law, traditional health insurance must cover pre-existing conditions right away, from the first day of enrollment, without waiting periods.
In contrast, health sharing plans typically impose waiting periods before they start sharing costs related to surgeries and preexisting conditions.
However, many health sharing organizations have devised innovative solutions to address this concern.
For example, health sharing plans gradually phase in sharing benefits after each year of membership. These programs aim to bridge the gap between immediate needs and long-term coverage.
For people in good health, of course, these waiting periods for pre-existing conditions aren’t a factor.
If you have pre-existing conditions that may require continuing treatment, you qualify for a big ACA-subsidy, or both, you may be better off sticking with traditional health insurance, rather than health sharing.
Conclusion
If you’ve had enough of complex networks, grappling with high premiums, or concerned about preexisting conditions, health sharing presents an enticing alternative.
There are no one-size-fits-all solutions. Every individual and family is different.
The freedom to choose your doctor, potential monthly savings, and innovative approaches to preexisting conditions make health sharing a viable option for many.
But if you have significant pre-existing conditions, don’t risk going uncovered during a health sharing plan’s waiting period. You’re probably better off paying the extra money in premiums and sticking with a traditional health insurance plan.
As always, stay informed and make healthcare decisions that best suit your situation
If you have questions or need guidance about health sharing or other healthcare coverage options, don’t hesitate to reach out to your Personal Benefits Manager.
At ColoHealth our PBMs are some of the best and most experienced agents in the industry.
And they are among just a few health insurance professionals appointed to represent both traditional health insurance companies and health sharing organizations.
Together, we can navigate the path to better healthcare.
To Your Health and Wealth,
Wiley P. Long III
President- ColoHealth
The ColoHealth Health & Wealth Newsletter is published monthly and emailed to subscribers at no charge. Subscribe now to stay on top of the critical information you need to know about health insurance, healthshare plans and managing your finances to achieve financial security.
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