Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor
a church

Life Health > Health Insurance

What Colorado Data Tells Us About the Wild West of Health Care Cost-Sharing Ministries

By Allison Bell

X
Your article was successfully shared with the contacts you provided.

What You Need to Know

  • Membership in cost-sharing ministries in Colorado amounts to about 30% of ACA individual exchange plan enrollment.
  • The ministries received requests for help with about $5,300 in bills per member.
  • The groups classified about $1,900 of the bills as eligible for sharing.

Health care cost-sharing ministries told the Colorado Division of Insurance that they paid about 74% of the Colorado member expenses that were eligible for sharing in 2021.

The ministries had about 68,000 members, and they paid an average of about $1,400 in costs per member, according to a new division report.

The federal Affordable Care Act of 2010 exempts faith-based health care cost-sharing ministries from federal health coverage rules. States are just starting to try to regulate the ministries.

What It Means

Because the health care sharing ministries operate with so little government oversight, their finances reflect how U.S. health coverage and other financial services arrangements, such as retirement plans, might work in a market with little or no regulation.

The Report

Colorado lawmakers imposed a data reporting requirement on the state’s health care cost-sharing ministries in a law passed in 2022.

Colorado calls the ministries “health care sharing plans and arrangements,” or HCSAs.

When Colorado regulators began enforcing the data reporting law, they found 21 ministries operating in the state.

Nine submitted data or asked for an exemption by the required deadline on their own; seven responded after regulators located them and asked for data; and five never sent in data, even when regulators asked them for data.

Officials checked the data for completeness and compliance with instructions, but they did not verify the claim payment numbers or other coverage performance statistics.

The Groups

Regulators say that none of the 16 groups that responded submitted complete data in the required format.

These groups reported having 67,800 members in Colorado and 1.7 million members in the United States. Seven of the ministries recruited 862 of their members through agents and brokers.

The Colorado Affordable Care Act exchange provided major medical insurance for 226,800 people in 2021.

Cost-sharing ministry amounts to about 30% of Colorado individual exchange plan enrollment, officials estimated.

The Sharing

The 14 groups that submitted sharing figures noted that they focus on paying for expensive medical care for new conditions and often reject efforts to share bills for mental health care, routine pregnancy costs, or costs related to preexisting conditions, such as asthma, cancer or diabetes.

The groups also ask members to negotiate with providers and to try to use any health coverage they have, such as Medicare or Medicaid, first.

The groups said they received requests for $362 million in expense sharing in 2021, or about $5,300 in requests per member, and classified $131 million of the expenses, or about $1,900 in expenses per member, as being eligible for sharing.

The Context

The ministries are similar in some ways to supplemental health insurance policies that consumers can use to pay out-of-network hospital bills.

Colorado regulators did not provide information about commercial health insurers’ or public plans’ typical reimbursement percentages for the kinds of medical expenses that health care cost-sharing ministries typically share.

William Johnson and colleagues reported in 2020, in a paper in the academic journal Health Affairs, that, in 2017, U.S. health insurers they analyzed paid an average of $17,768, or 56%, of the $31,567 average bill for a covered, out-of-network, inpatient hospital procedure.

In 2017, the annual out-of-pocket maximum for ACA-compliant individual major medical coverage was $7,150. That means that, if a patient with individual major medical coverage had a $7,150 deductible, and had an out-of-network procedure that cost $31,567, the insurer might pay $10,618 of the billed amount, or 34% of the total.

Regulators’ View

Colorado officials contend that many consumers who are used to ACA-compliant coverage may not understand the gaps in health care cost-sharing ministry coverage or the difference between the billed amounts and what the ministries might end up paying.

Michael Conway, the state’s insurance commissioner, said some consumers who call regulators about HCSAs have thousands of dollars in unpaid expenses.

“It shows me that people are clearly not getting the full story from the companies when they sign up for HCSAs,” Conway said.

The National Association of Insurance Commissioners put out a notice warning consumers about the limitations of the ministries and other ACA coverage alternatives, such as health care discount programs, in November 2022.

(Image: Adobe Stock)

Allison Bell

Think_Allison

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.