In the US, the vast majority of health insurance coverage is provided by employers, or through the state marketplaces. Since the Affordable Care Act (ACA) passed in 2010, Marketplace plans and most employer plans must provide coverage for services like maternal health and mental health. These plans also cannot deny coverage if you have pre-existing conditions. While the ACA aimed to make healthcare more accessible and affordable, many Americans continue to choose alternatives such as health-sharing ministries and short-term health insurance plans based on shared religious beliefs and values or perceived cost savings.
Health-Sharing Ministry
The first alternative is called a Health-Sharing Ministry (HSM). HSM programs are most commonly offered through faith-based organizations. Members of HSMs pool their money in a community fund; when a member becomes ill they submit a request for the amount to cover the bill.
HSMs may seem attractive since monthly membership fees tend to be lower than full-price health insurance premiums, however, HSMs are not considered healthcare insurance. Therefore, members are not protected by insurance laws and regulations in most states. The plans, while mimicking health insurance policies, are not ACA-compliant. There is no guarantee that your healthcare costs will be covered. You may also need to prove that you are in good health to qualify for the plan, and some plans might require that you attest to the beliefs of the organization.
Short-Term Health Insurance
Short-term health insurance plans offer an alternative, temporary safety net for those who feel they cannot afford ACA-compliant plans or prefer broader network coverage than an ACA-compliant plan may offer. These policies can be purchased for 12 months and renewed for two additional 12-month periods. Short-term plans are not ACA-compliant, meaning they are not required to cover the ACA’s essential health benefits which include maternity care, preventative care, or prescription drugs. This also means they are allowed to deny coverage based on pre-existing conditions or those who have high health risks. The network coverage varies depending on the plan: some plans will let you see any doctor or go to any hospital whereas other plans have restricted networks where you pay less when you see a provider in their network.
Some short-term plans may not be renewable after the initial term without a review of your health conditions, and if you lose coverage under one of these plans, you are not qualified for a special enrollment period and will have to wait until open enrollment in the fall to enroll in an ACA plan.
Currently, 11 states do not permit short-term plans. These include California, Colorado, Connecticut, Hawaii, Maine, Massachusetts, New York, New Jersey, New Mexico, Rhode Island, and Vermont. If your state does permit short-term plans, you can check your state’s policies here.
You have the right to explore all your health coverage options, but it’s important to know what you’re getting into before you sign up. This blog is a good starting point to learn about health-sharing ministries and short-term health insurance plans, but you may need to do more extensive research if you’re considering one of these plans. We also recommend consulting with your financial advisor and conducting a HealthPlanning Analysis to see what type of health insurance coverage, “alternative” or not, aligns with your preferences and financial risk.
Learn More:
Understanding Short-Term Limited Duration Health Insurance | Kaiser Family Foundation
Overview of Healthcare Sharing Ministries | Verywell Health
Health Care Sharing Ministries: What Are the Risks to Consumers and Insurance Markets | Commonwealth Fund
Last Revised July 13th, 2023
