Exempt from regulation, taxation, and the individual mandate, Christian collectives called health care sharing ministries are paying for the care of their neediest members -- if they approve of the morality of their needs.
In 2006, Ray Carman's health insurance jumped from $600 to $1,000 a month. The reason? His first daughter was born five weeks premature. Though there were no complications during her birth, his daughter was dubbed "high risk" by his insurance company.
Carman, who is a real estate agent and auctioneer in Lafayette, TN, said the costs were simply too high. He began looking for alternatives.
A friend recommended he join a Christian health care sharing plan, a nonprofit in which members pay for each other's medical costs by agreeing to contribute a donation every month. After some research, he joined an organization called Medi-Share.
Since then, $50,000 of his family's medical costs have been taken care of. The care has ranged from an appendectomy, to health coverage for gall bladder complications and maternity costs associated with his wife's subsequent pregnancies and one miscarriage.
But to Carman and 140,000 others who have signed up for these ministries across the country, managing health costs is only part of the benefit. Patients receive notes in the mail or online from other members they have never met, but who share their beliefs, offering encouragement and prayer.
"A single mom diagnosed with breast cancer will not only be concerned about her medical bills, but also about her children and being confronted with mortality," said Tony Meggs, President and CEO of Medi-Share.
The ministries have been around for more than two decades as a creative approach to handling the growing costs of medical care. The largest players include Medi-Share, Samaritan Ministries International and Christian Healthcare Ministries. They market themselves as alternatives to health insurance, though they themselves are not insurance but nonprofits.
Medical costs are "shared," not pooled the way they are with insurance companies. Also, people can choose to leave the plan whenever they want. Members themselves vote on what medical procedures should be shared.
Medi-Share has the funds sent to a bank account, then distributed. Everything is done digitally, so members log on to see where their money is going. In the case of Samaritan Ministries, members receive a letter in the mail telling them to send a check to a specific member in need each month.
Exemptions from state and federal law
As nonprofits, health care sharing ministries aren't required to follow the same state and federal regulations as health insurance companies.
The Affordable Care Act has a section that exempts members of health care sharing ministries from purchasing insurance. The Amish, Mennonite, and Indian tribe communities also are exempt from the penalty that will be incurred on Americans who fail to purchase health insurance by 2014. Since the law was passed in 2010, membership for Medi-Share and Samaritan Ministries has risen by about 40 percent.
Christian health sharing ministries are largely unregulated, except by themselves. This means members cannot go to an insurance commissioner with a complaint, rates aren't reviewed by an independent regulator, and there is no way to ensure they are following anti-discrimination laws.
"They need to know what they're getting and what they're not getting," Roesler said. "One thing they are not getting is the same consumer protections as others."
In Kentucky, a 10-year legal battle has persisted with Medi-Share. The commonwealth's Supreme Court ruled in 2010 that the organization was considered insurance because it shifted risks from one person to another and used an intermediary to distribute the funds. This year the department of insurance has requested Medi-Share be held in contempt for the unauthorized sale of insurance.