Health sharing companies tout themselves as a cost-saving solution to traditional health insurance with a more communal focus.
Though its true they often are less expensive than traditional insurance, are they really worth it?
To answer that question, we did the research and read the fine print.
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What Are Health Sharing Plans?
First, what even are health sharing plans?
Theyve been around for a while but have increased in popularity since the Affordable Care Act.
Once in the program, you pay a monthly amount.
Then you’re able to submit your medical bills to be shared by the group.
Its also important to recognize what health sharing is not it is not insurance.
You are the one legally responsible to pay for all medical expenses.
In theory, you might share these costs with your health sharing program.
But know the legal responsibility is ultimately yours.
How Do Health Sharing Plans Work?
These programs work similarly to traditional insurance in some ways (again, remember its not actually insurance).
When you have a medical expense, you submit a request for the program to cover it.
If its approved, the amount is covered by the monthly premiums of other participants.
These providers will often have less expensive, contracted rates.
And several have annual or lifetime limits on medical expenses per person.
Each company and plan will have different specifics, but here are the basic trends.
That allows them to have a pool of basically healthy people and thus fewer medical expenses.
The upside of this is price.
The downside is you might get turned away.
(Do note: some programs allow pre-existing conditions but may require you to pay additional costs.)
Health sharing companies also have some limits on what they choose to cover.
For some, this is a plus as you avoid paying for things you might be morally opposed to.
Others might find this coverage lacking.
Similarly, many healthshares dont cover preventive care like traditional health insurance.
You might end up paying for vaccines or well-child visits.
For example, most programs have limited prescription coverage.
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Risks Involved
With most health sharing plans, youll be responsible to submit your receipts for reimbursement.
This sometimes means paying for your medical expenses yourself and then waiting for a reimbursement check.
However, many companies are working on limiting their reimbursement window to 30 to 60 days.
Many people like that health sharing plans also come with a sense of community.
The main downside with health sharing plans is the risk of no guarantee of payment.
Its also certainly better than no medical coverage.
Who Can Consider a Health Sharing Plan and Who Should Avoid it?
Health sharing plans really arent for everyone.
In fact, theyre specifically designed for people in good health who are committed to living a healthy lifestyle.
This includes avoiding drugs and limiting alcohol consumption.
There is still risk, but the financial benefits may outweigh that.
You should avoid health shares if you have complicated chronic health needs or take prescription drugs often.
Health shares can also be stressful if you struggle with waiting.
Be warned that most of these can only be applied during the open enrollment period.
But its worth knowing so you could plan ahead.
1.High Deductible Plan from Employer
Employer-backed health insurance is often your cheapest bet for quality health insurance.
This is particularly true if they offer a high deductible plan.
A high deductible plan normally has a low monthly premium and high deductible (duh!)
Not all companies offer these programs, but its worth asking.
it’s possible for you to also get help from government insurance brokers.
They are also often very knowledgeable of any discounts you might be eligible for depending on your income.
Health Insurance Broker
Health insurance brokers act as a go-between for consumers and health insurance companies.
They are licensed and know their stuff when it comes to insurance.
Because of this, they can often help you find the best deal while helping you understand your coverage.
Medicare or Medicaid
This option is last because it only applies to certain groups of people.
If it does apply to your situation, its a life saver.
If it is, check out your states Medicaid agency to apply.
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Yes, health sharing companies are completely legal.
Health sharing companies are nonprofits that are regulated by the IRS and state attorney generals.
Yes, but cautiously.
Similarly, expenses from pre-existing conditions are often not deemed shareable expenses.
Contributor Whitney Hansen covers banking, credit cards and investing for The Penny Hoarder.
She also writes on other personal finance topics.
