In late-2017, I shared estimated 2018 healthcare expenses for our family.
The projected costs at that time were $24,000 of premiums and a family deductible of about $15,000. Think about that for just a moment, even after paying $24,000 of premiums our family still would have been on the hook for thousands of dollars of medical expenses! Well, that wasn’t going to work at all so I researched and shared an alternative solution with you.
Instead of traditional insurance, we opted to participate in a health sharing arrangement. It sounded great on paper, but you never really know until you experience it for yourself. Turns out, it worked out very well and saved us thousands of dollars. So let me briefly share some pros and cons as this could be a great, far cheaper solution for you as well.
First, what is a health sharing arrangement? It’s similar to insurance in that a bunch of people pool their resources together to spread the risk of unexpected medical costs across many people. One difference is that because the health sharing arrangement is affiliated with a protected class (i.e. religious affiliation), it is not subject to all the Obamacare provisions and coverage mandates. The health sharing pool can exclude pre-existing conditions from coverage making the overall risk pool far healthier, and it doesn’t have to cover everything “traditional” insurance is now mandated to cover (e.g. contraceptives, abortions). This greatly reduces the cost of insuring the pool, which is why the health sharing arrangement is so cheap compared to traditional insurance.
Having said that, if you have a serious pre-existing medical condition, particularly if you’ve been treated for it within the last 36 months, the health sharing arrangement is not likely to be a great option for you as that illness would at least be excluded from coverage for the first year and then covered at a reduced rate for the next two years.
Please note that there is no “guarantee” of coverage in the health sharing arrangement much like there is with traditional insurance, which I understand has a legally binding contract and “guarantee of compensation” for specified loss, damage, illness, death, etc…
Our monthly “premium” for 2018 was just $449 for the entire family (all 5 of us) with a $500 individual “deductible” (or “unshared amount”) and $1,500 family deductible. We saved $18,000 in premiums alone PLUS we had over $13,000 LESS of exposure because of the much lower deductible. The big question for me was, “Would everything be covered that we needed covered or were we going to be surprised to find holes leaving us exposed?”
Unfortunately, Mia (our oldest daughter) did have a couple unexpected issues in 2018 for which we needed testing performed in Madison, WI. The costs for these tests and consults totaled over $20,000. It did require some back and forth with Liberty HealthShare, but it appears at this point that these expenses are going to be covered by Liberty HealthShare. My wife will tell you that back and forth was very frustrating and took a lot of time so be prepared for that if any significant medical expenses arise.
Additionally, we don’t have to worry about which provider is in-network or not. With traditional insurance, I assume the Madison trips would have required lots of “hoop-jumping” because the provider would not have been in-network (there was no in-network option nearby).
The downsides we experienced with Liberty HealthShare are that bill processing takes a long time and then, once processed, payments take a long time. Therefore, while we were/are waiting for various medical bills to be processed we continued/continue to receive bills directly from the providers, which is frustrating. I’d like to see Liberty shorten those processing times as we’re technically on the hook for those bills, and it’s not fun receiving multiple bills for the same expense for someone like me who tends to pay everything immediately as it comes in. I hate having any bill outstanding for any period of time. Liberty HealthShare has announced that they’re making changes to improve processing times. We’ll see how they do in 2019.
Another issue is that some providers have not yet worked with these health sharing ministries so they don’t have a great process in place, which likely further stalls the process. There is often some confusion from the providers on how to proceed. However, I do have an insurance ID card from Liberty much like I’d have from an insurance company that provides contact info and instructions, which helps.
The bottom line is that the health sharing arrangement likely saved us around $30,000 in 2018 between premiums and out of pocket expenses in 2018!
If you’re relatively healthy and don’t otherwise have access to great insurance coverage for cheap, it’s certainly worth at least taking a look to see if a health sharing arrangement makes sense for you. There are several options. The one we used, and will continue to use, is Liberty HealthShare.
Make sure to do your own research to determine if it’s appropriate for you! Search for reviews as there are some folks who have had bad experiences. Then make your own judgement once you feel you have a good grasp of all the pros and cons as there are certainly some risks as well.