Health care sharing ministries promote reimbursement for members' medical expenses, but they are mostly unregulated and often have limitations on maternity coverage.
Andrew Sheffield and Rachel Kaplan with their son, Lucas, in their home in Arden, N.C., on Nov. 21.Dec. 22, 2024, 4:00 PM GMT+6
ARDEN, N.C. — Rachel Kaplan was uninsured when she became pregnant last year. Her doctor suggested an alternative: a nonprofit organization called Sedera, which positions itself as a medical cost-sharing service.
Sedera members pay monthly fees that are pooled together, and the organization uses the collected funds to reimburse members for medical bills. The model is similar to health insurance, but Sedera operates outside the regulations that govern traditional insurance.
“It sounded straightforward enough, so we thought, ‘OK, this makes sense,’ only to find out that when I tried to submit our hospital bill, it was denied,” Kaplan said.
She and her husband, Andrew Sheffield, contacted Sedera for reimbursement after their son, Lucas, was born in August 2023. The delivery involved an induction, 40 hours of labor, and a cesarean section—complications that can drive up hospital bills. But, to the couple’s surprise, Sedera informed them that they were ineligible for reimbursement due to a policy listed in the group’s member guidelines: medical bills for childbirth within the first year of membership “are not shareable.”
“We basically gave Sedera our money and got nothing in return,” Kaplan said. “It felt like the rug was pulled out from under us.”
Sedera did not respond to multiple requests for comment. The organization is classified as a “health care sharing ministry,” one of over 100 such groups in the U.S. Many are rooted in Christianity and emphasize faith-based values. The model has grown in popularity and revenue over the past decade as insurance premiums, claim denials, and healthcare costs have surged, leading some to lose trust in traditional insurance companies.
The Alliance of Health Care Sharing Ministries, which represents several large ministries, estimates that approximately 1 million people in the U.S. were members of these groups last year, with a 2019 analysis by the Colorado Division of Insurance suggesting the number may be closer to 1.5 million—up from fewer than 200,000 people before 2010.
“They are seeking a faith-based alternative to the flawed insurance system,” said Katy Talento, executive director of the Alliance. “They want freedom from being forced to use certain doctors or facilities.”
Health care sharing ministries differ from insurance plans in key ways. For instance, instead of negotiating directly with healthcare providers, they reimburse members for their medical expenses. Unlike insurance companies, these ministries are not legally required to cover essential services such as pregnancy, pre-existing conditions, or preventive care, allowing them to impose stricter coverage limitations.
These ministries operate with minimal oversight, benefitting from exemptions under the Affordable Care Act that prevent members from being penalized for lacking traditional insurance, as long as they belong to one of these groups. The ministries also gained prominence with the rise in healthcare costs and premiums.
However, many ministries impose waiting periods for maternity care, limiting eligibility for reimbursement if members join after becoming pregnant. A report from the Government Accountability Office shows that at least eight of the 10 largest ministries have such restrictions. This contrasts with the Affordable Care Act, which requires most insurance plans to cover pregnancy and childbirth care as essential services, even if the member becomes pregnant before their coverage begins.
NBC News interviewed four families who were either denied or struggled to receive reimbursement from their healthcare sharing ministry for pregnancy or childbirth-related expenses. All felt misled and warned other families to avoid these services, stating that they could be just as problematic as the insurance system they opted to leave behind.
Two major ministries said that their maternity restrictions are in place to prevent people from joining just to cover pregnancy costs and leaving shortly after birth.
“The members and leaders of most ministries have set limitations on how early in someone’s membership maternity bills are shareable,” Talento explained. “These restrictions help preserve the resources of the entire membership.”
A Flexible Model, but Few Safeguards
Most health care sharing ministries follow a similar approach: members pay a monthly fee, typically between $85 and $1,300, and are responsible for an “unshareable amount” (similar to a deductible) before the ministry will contribute toward medical costs.
Members inform doctors and hospitals that they are “cash pay” patients, which can result in discounted bills, and then submit copies of bills and proof of payment to the ministry for reimbursement.
The ministries offer lower monthly fees than traditional insurance, along with networks that emphasize shared religious values and a focus on caring for others in times of illness. However, many ministries exclude coverage for prescriptions, routine doctor’s visits, contraceptives, and mental health or substance use services. Pre-existing conditions are often not covered, and the ministries are not legally bound to maintain reserves to cover claims or limit out-of-pocket costs like insurance companies.
At least 30 states have laws that exempt health care sharing ministries from insurance regulations. As a result, ministries have broad discretion in determining whether to approve claims, sometimes depending on whether they have sufficient funds available.
“There’s no guarantee that they’ll be able to pay your claim,” said JoAnn Volk, co-director of Georgetown University’s Center on Health Insurance Reforms. “That’s something you won’t see with traditional insurance.”
While this lack of regulation can be beneficial in terms of flexibility—such as allowing members to choose their healthcare providers and enroll at any time—many experts and regulators warn that ministries often promise more than they can deliver, leaving members with the false impression that they are purchasing an insurance plan.
Volk noted that some ministries report spending that exceeds their revenue, raising concerns about their ability to cover members' medical expenses.
'They Had No Mercy'
For Kaplan, part of the appeal of Sedera was joining a supportive community, which was important to her. She and Sheffield live near Asheville, North Carolina, where Kaplan teaches yoga and is well-known in her local community. They own a small painting business but found it too costly to purchase insurance through their business or get an individual plan. Sedera’s $147 monthly fee seemed like the best option.
“I thought I had done all my homework,” Sheffield said.
Now, they blame themselves for not noticing the maternity policy in Sedera’s 49-page guidelines, which was located on page 44.
Kaplan tried for months to get reimbursement for their delivery costs, which had been discounted to around $7,000, but had no success.
“It was so stressful. I was crying. I was pleading with Sedera. I called them every day,” Kaplan said. “They had no mercy for us. No grace at all.”
The couple eventually paid the delivery bill, along with an additional $2,800 for Kaplan’s anesthesia, but still owe around $2,500 for a physician’s fee.
Brokers and Church Groups
Health care sharing ministry enrollment is not tracked federally, and only Colorado requires ministries to report such data. To attract new members, some ministries pay insurance brokers higher commissions than insurance companies, while others recruit through church communities.
In Longmont, Colorado, the Pelon family had a similar experience when they rejoined Christian Healthcare Ministries in 2020. Dana Pelon found out she was pregnant shortly after joining but was told she was ineligible for maternity coverage because she had not joined at least 300 days before her due date.
“There was no compassion,” Pelon said. “They simply said, ‘We’ll cover any due date after this day,’ and it was 27 days after my daughter’s birth.”
Avoiding the Model
Another ministry, Liberty HealthShare, has faced member complaints and lawsuits. Warren Walborn shared his experience with Liberty after enrolling in the plan and submitting invoices for his wife’s prenatal care and delivery in 2021. Despite following Liberty’s procedures, the ministry declined reimbursement because the requested documentation was not sufficient.
“If I had hair, I would pull it out,” Walborn said. “I asked myself, ‘Why am I sending them money every month if they’re never going to reimburse me?’”
Kallie Seiter, a mother of five, also had a frustrating experience with Liberty during her pregnancy in 2019. Despite an earlier written assurance that her delivery would be fully covered, Liberty declined to reimburse her for the full amount due to policy limits resetting shortly before the birth. After 18 months of disputes, Seiter eventually recovered her $5,000 but left the ministry for good.
“If someone were to ask me if I recommend Liberty for pregnancy, I would definitely tell them to stay far away,” Seiter said.
Liberty responded by acknowledging delays in processing members’ bills but emphasized that processing errors can happen despite their best efforts.
Warnings and Legal Challenges
Some state officials and regulators have raised concerns about the ministries, warning consumers that these groups may misrepresent their services. Efforts to increase regulation include bills that would require ministries to submit financial disclosures and hold them accountable for misleading practices.
As families like Kaplan’s reflect on their experiences, they urge others to be cautious about health care sharing ministries, questioning whether they offer a true alternative to traditional insurance.
“I don’t think we should be made to feel like it’s impossible to have a family,” Kaplan said. “The system makes it so difficult.”
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