When Jase and Jennie Stefanski needed to pay a midwife her $5,000 fee for delivering their sixth child 10 months ago, the money came from an unlikely source: people who are members, like them, of a Christian nonprofit group called . In dribs and drabs, the checks arrived, most between $135 and $320, many with personal notes attached congratulating the family.
The Stefanskis don鈥檛 have health insurance. Instead, they belong to a 鈥渉ealth-care sharing ministry鈥 whose members follow biblical teachings that they share each other鈥檚 burdens聽鈥 in this case, their medical costs. Each member pays a monthly fee that varies with family size: Single members generally pay $135, couples $270, single-parent families $200 and two-parent families $320. Members pay the first $300 for any medical expense they incur; when they have bills聽鈥 or 鈥渘eeds,鈥 as they call them聽鈥 above that amount, they send them to the ministry鈥檚 Peoria, Ill., offices.
The ministry keeps track of the needs, informing other members where to send their monthly check, and letting those who have made requests know what checks to expect.
If there鈥檚 a shortfall one month聽鈥 the last one at Samaritan was a little over a year ago聽鈥 every household seeking help gets a prorated portion of its needs covered, and the ministry asks members for voluntary contributions to make up the difference. If the shortfall continues, members vote on raising the share amount.
More From This Series Insuring Your Health
With 56,000 members, Samaritan is the largest such ministry in the country. Two other major ministries operate slightly differently聽鈥 pooling members鈥 money and sending checks out from the ministry聽鈥 bringing the total number of people who are sharing their medical costs to roughly 120,000.
Health-care sharing ministries aren鈥檛 for everyone. In general, members must be practicing Christians聽鈥 attested to by their pastor in some cases聽鈥 and abstain from tobacco and illegal drug use. They must agree not to have sex outside marriage聽鈥 and typically cannot seek help for any medical expenses that arise from such sexual activity.
Rules vary about when or if the ministries cover preexisting medical conditions.
Although the ministries say that they鈥檙e not providing health insurance and are therefore exempt from state insurance regulations, states sometimes beg to differ. Concerned that members may believe such ministries guarantee coverage of their medical bills, regulators have at times tried to shut them down.
鈥淭hey鈥檝e made a commitment to what is effectively health insurance, that when you need to have your medical bills paid they鈥檒l help or will pay those costs for you,鈥 says Mike Kreidler, Washington state鈥檚 insurance commissioner.
Earlier this month, Kreidler鈥檚 department issued to Samaritan. Nonetheless, Kreidler says he believes Samaritan is an 鈥渦pfront group鈥 and notes that no complaints have been filed with his office against them.
But within days of Kreidler鈥檚 order, the legislature passed an to an existing bill exempting health-care sharing ministries from state insurance regulations. The bill is on the governor鈥檚 desk.
This month鈥檚 action was the first against Samaritan Ministries, which operates in all 50 states, as does , which reports having 25,000 to 30,000 members. Lawsuits over unpaid medical bills incurred by its members caused Melbourne, Fla.-based to from Montana and stop accepting new members in Illinois, according to the Pew Charitable Trust鈥檚 Center on the States. The group says it has 40,000 members.
Washington state鈥檚 Kreidler says he is concerned that the legislature鈥檚 action may encourage groups that aren鈥檛 legitimate to take consumers鈥 money and scam them. 鈥淲hat I鈥檓 afraid of is that you open the door to a Ponzi-type scheme and illegal activity from which we have no authority to step in and protect consumers,鈥 he says.
One of the most important responsibilities of an insurance regulator is to make sure insurers have enough money to pay claims, says Sandy Praeger, the Kansas state insurance commissioner. 鈥淲e monitor their solvency,鈥 she says. 鈥淎nd as a company builds
up its book of business, they have to build up their reserves.鈥
Such concerns don鈥檛 trouble Jase Stefanski, whose family lives near Vancouver, Wash. 鈥淚t鈥檚 not insurance, I know,鈥 he says. 鈥淚t鈥檚 on my risk.鈥
Stefanski says he likes the connection with other Christians that Samaritan offers. In addition, it鈥檚 a much more affordable option than the $1,050 a month he was paying for private insurance.
Eleven states have laws that specifically exempt health-care sharing ministries from state insurance regulation.
The federal health-care overhaul adopted by Congress last year also recognizes ministries that share health care expenses as part of their religious practice. The law exempts members of such ministries from the penalty that will be levied against individuals who don鈥檛 purchase health insurance starting in 2014, a fact which all three of the major ministries highlight to varying degrees on their Web sites.
James Lansberry, Samaritan executive vice president, says membership growth stalled while health care reform was being debated and people were uncertain how health care sharing ministries would be affected. 鈥淲e鈥檙e seeing a little higher growth now,鈥 he says, although he doesn鈥檛 expect a huge influx of new members.
Only long-standing ministries are affected by the new law鈥檚 exemption clause because it limits recognition to organizations that have 501(c)(3) tax-exempt status and have shared medical expenses continuously since at least Dec. 31, 1999. They must also be audited annually by an outside accounting firm.
But these criteria won鈥檛 necessarily stop scammers from creating fake ministries and soliciting members, says Praeger. 鈥淵ou have to look at the fine print to see whether it鈥檚 truly one of these [religious] programs or is it someone trying to take advantage of that,鈥 she says. 鈥淚 think we鈥檒l see more of that because of the exemption in the Affordable Care Act.鈥