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Kentucky Fried Health Plan

 |  By Cora Nucci  
   September 01, 2010

The Kentucky Supreme Court ruled last week that Medi-Share, a self-described "non-insurance healthcare program based on biblical principles" is indeed a health plan.

Medi-Share, founded in 1993 and based in Melbourne, FL is operated by the non-profit Christian Care Ministry. Medi-Share describes itself as "a program where Christians share each other's medical expenses. Christian Care Ministry and the Medi-Share program are not registered or licensed by any insurance entity, nor are they required to be. CCM does not collect premiums, make promise of payment, or guarantee that your medical bills will be paid. Sharing of medical bills is completely voluntary." 

Kentucky sees it differently.  "The Medi-Share program "fits comfortably within the statutory definition of an insurance contract because it shifts the risk of payments for medical expenses from the individual to a pool of people paying into the program. Thus, regardless of how Medi-Share defines itself or what disclaimers it includes in its literature, in the final analysis, there is a shifting of risk," Justice Daniel J. Venters wrote for the court.  The 5-2 decision is here.

I expect we'll be seeing more of these faith-based alternatives to health insurance as the 2014 deadline for near-universal health coverage nears. The Patient Protection and Affordable Care Act specifically exempts healthcare sharing ministries from the requirement.  And that's where things get fuzzy, because it's hard to tell them apart from licensed health plans.

Two other alternatives to health insurance stand a better chance at maintaining their designations as non-insurers.

One of them is Samaritan Ministries of Peoria, IL, which describes itself as "a healthcare needs-sharing organization." SM issued a statement after the Kentucky decision in which its general counsel, Brian Heller,  said, “What the court did not explain is how a pooling arrangement can 'shift risk' when all par­ticipation in the pool is voluntary and thus no member of the pool has any legal responsibility for any other member’s medical expense."

The Kentucky decision, which likely will be appealed, has no direct effect on Samaritan Ministries members since they do not “pool” their money, but mail it directly to member families in need, the statement explained. That step goes a long way in distinguishing SM as something other than a health plan.

Medi-Share, on the other hand, operates closer to the traditional health payer model.  While Medi-Share may not pay providers directly, Christian Care Ministry facilitates the processing of payments.  That distinction, of course, was not enough to sway the Kentucky Supreme Court.

Perhaps the court would look more favorably upon the actions of a third player in this space, Christian Healthcare Ministries, "a Bible-based, voluntary medical cost-sharing ministry" out of Barberton, OH.  CHM draws a clearer line between itself and insurers.  It advises providers that "members are self-pay patients who should receive consideration for assistance programs and bill reductions." 

Here's the twist:  Some who oppose health reform—and health care coverage—on ideological grounds, and who have sought out these alternative programs precisely because they are NOT health plans, may find themselves members of a program now determined by a court to be... a health plan. It's a real conundrum.  These folks are covered by a health plan, but against their will, while many others who desperately want and need coverage can't get it.

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