When health insurance premiums look steep, health sharing plans can look like a bargain. They advertise lower monthly amounts and a community feel. But they work very differently from insurance, and people are sometimes surprised by what that means. This guide explains the differences so you can compare with eyes open.
How health sharing works
In a health sharing arrangement, members pay a monthly contribution into a pool. When a member has an eligible medical expense, other members' contributions are directed to help pay it, according to the program's guidelines. Many are organized as faith-based nonprofits and ask members to follow certain lifestyle or belief statements.
The key words are "guidelines" and "sharing." The program describes what it will consider for sharing. It is not a contract promising payment in the way an insurance policy is.
Why it is not insurance
Differences usually include:
- No guarantee of payment. Most programs state that sharing is voluntary and that they do not promise to pay bills.
- Limited regulation. Insurance companies are regulated by state insurance departments, with rules on solvency, claims handling, and consumer protections. Health sharing programs are generally not regulated as insurance, though some states have specific laws about them.
- No ACA consumer protections. Rules requiring coverage of essential health benefits, limits on out-of-pocket costs, and protection for pre-existing conditions generally do not apply.
- No premium tax credits. Subsidies are for Marketplace plans, not sharing arrangements.
What sharing plans often exclude or limit
Always read the guidelines, but common limits include:
- Pre-existing conditions, sometimes for a waiting period or permanently.
- Certain services such as some mental health care, maternity, or preventive care.
- Care related to behaviors the program does not support.
- Charges above what the program deems reasonable.
- Annual or lifetime sharing limits.
Requirements such as negotiating bills or submitting through the program's process can also affect how much is shared.
What it can cost compared with insurance
Monthly amounts can be lower than comparable ACA premiums, particularly for people who do not qualify for subsidies. But the comparison is not apples to apples. Lower monthly cost can come with more financial risk after a major illness or accident. If you qualify for premium tax credits, an ACA plan may cost less than you think. See what health insurance costs without a job.
Compare before you decide
We'll show you real ACA prices with subsidies for your household so you can compare against a sharing plan fairly.
Get my free comparisonWho sometimes considers sharing plans
- Healthy people who do not qualify for subsidies and want lower monthly costs.
- Individuals who value a faith-based community model.
- People willing to accept the financial risk of non-guaranteed payment.
Who should be cautious
- Anyone with ongoing health needs or pre-existing conditions.
- Families expecting a baby or planning major care.
- People who cannot afford a large unpaid medical bill.
- Anyone who would be unable to enroll in an ACA plan outside open enrollment if the sharing plan fails them.
Other lower-cost alternatives to compare
- ACA Bronze plan with a high deductible. See Bronze, Silver, and Gold plans.
- Catastrophic plan, for those who qualify.
- Medicaid or CHIP, if you meet income rules.
- ICHRA, if your employer offers it.
- Short-term plans, which have their own limits. See short-term health insurance.
Questions to ask any sharing program
- Is there any guarantee of payment?
- How do you treat pre-existing conditions?
- What are the annual and lifetime limits?
- What happens if I have a large claim?
- How do I appeal a denied request?
- How is the program regulated in my state?
A fair way to compare costs
When you compare a sharing plan with insurance, put the same scenarios side by side: a routine year, a broken bone, and a hospital stay. For each, estimate what you would pay under the sharing guidelines and under an ACA plan with its deductible and out-of-pocket maximum. Include the chance that a request is declined. The cheapest plan in a routine year is often not the cheapest in a bad year, and a bad year is what insurance is for.
Check your state's rules
Some states have laws that define and regulate health care sharing ministries, including required disclosures that they are not insurance. Look for that disclosure and read it carefully before you sign up.
Keep a safety net
If you do join a sharing program, set aside savings for a large unpaid bill and keep a plan for what you would do if you needed regulated insurance, such as knowing your next Open Enrollment dates.
How we help
Honorbrook is an independent insurance agency. We sell regulated insurance, not sharing plans, and we are happy to show you how ACA coverage compares at your income and address. Our help is free because carriers pay us.
Availability and rules vary by state
Health plans, premiums, enrollment rules and state programs differ by state and sometimes by county, and a given plan may not be available in every state. Honorbrook is licensed in the 11 states below; what we can offer you depends on what carriers sell where you live. Each state’s insurance regulator can verify an agent’s license and answer consumer questions.
- Virginia: Virginia Bureau of Insurance
- Maryland: Maryland Insurance Administration
- North Carolina: North Carolina Department of Insurance
- South Carolina: South Carolina Department of Insurance
- Georgia: Georgia Office of Insurance and Safety Fire Commissioner
- Alabama: Alabama Department of Insurance
- Louisiana: Louisiana Department of Insurance
- Texas: Texas Department of Insurance
- Michigan: Michigan Department of Insurance and Financial Services
- Indiana: Indiana Department of Insurance
- West Virginia: West Virginia Offices of the Insurance Commissioner