In statistics reported in 2021, nearly 68,000 Coloradans were enrolled in programs designed to pay for healthcare costs that functioned somewhat like insurance, but which also clearly were not health insurance as legally defined and monitored by public policy. These programs are commonly called “Health Care Sharing Arrangements” (HCSAs) or “Health Care Sharing Ministries.” They are typically targeted to and participated in by individuals who share a common faith tradition. In that 2021-time frame, Colorado reportedly had 16 HCSAs operating in the state. Their membership equaled almost 4% of the estimated 1.7 million Americans enrolled in such programs. Since Colorado’s 2020 census population represented under 2% of the national population, HCSAs are apparently more popular here than in many other areas of the country.

Partly due to those numbers and partly due to a number of questions and criticisms raised about HCSAs, the Colorado Department of Regulatory Agencies Division of Insurance (DOI) prepared a report on such programs in the spring of 2023. The DOI cited the fact that “consumer assistance organizations and lawmakers have received numerous questions and complaints about Health Care Sharing Ministries, Plans, or Arrangements operating in Colorado.” The year prior, the 73rd Colorado General Assembly had passed House Bill 22-1269, requiring HCSAs to report data annually to the DIO to better understand and collect information about the HCSAs operating in Colorado.

Some Particulars about Colorado’s HCSAs

Colorado statute defines an HCSA as an entity or person not authorized to sell insurance in Colorado but that offers or intends to offer “a plan or arrangement in this state to facilitate payment or reimbursement of Colorado residents’ healthcare costs or services.” It is in the data reporting requirements and in the details of these “arrangements” to pay for healthcare costs that HCSAs have come under particular scrutiny. Following are some of the reasons why, based on DIO information.

  • HCSAs don’t offer the same protections to consumers as Affordable Care Act (ACA) plans. There is no guarantee that HCSA members will have their healthcare costs paid for (commonly referred to as “sharing” by HCSAs). Some HCSAs include notices to consumers that payments are not guaranteed for health costs, and members are always personally liable for payment of their medical bills. But the DIO says it is unclear if consumers have full understanding of these provisions when they enroll, “and many Division complaints suggest that they may not.”
  • Regarding reporting, HCSAs are now required to provide the DIO data on annual enrollment. The goal of such reporting is to increase transparency for Colorado consumers. At the end of the first reporting year, nine HCSAs had submitted data or requested an extension. Months later a total of 16 HCSAs had submitted their data. The DOI reported that all 16 submissions were initially deemed incomplete.
  • Of the 16 HCSAs that submitted data, only a subset submitted their financial information correctly. A few HCSAs did not report all of the required information for differing reasons. Fourteen HCSAs reported that the dollar amount of healthcare costs or services that were submitted for sharing totaled nearly $362 million. Of that total, the HCSAs reported that $132 million — roughly a third — were determined to qualify for sharing payments. On the revenue side, a little over $97 million in total fees, dues, shares, contributions, and other payments were collected from Colorado HCSA members, which would equal about 27% of members’ submitted healthcare costs and roughly 73% of qualifying costs. The apparent shortfall may be explained in part by the fact that the percentages of member fees or shares retained for administrative expenses or program expenses were categorized differently across HCSAs. Also, some HCSAs require members to first request charity care and financial support from local governments and consumer support organizations in paying a member’s healthcare bills. For Medicare eligible members, some HCSAs require that their participants are enrolled in Medicare parts A, B, and sometimes D and that the HCSA is used only after healthcare costs are submitted to Medicare.
  • The DIO guidelines also address how accurately marketing materials describe HCSA program details. Seven HCSAs reported working with producers to enroll about 35% of the members in these seven HCSAs. Five of the HCSAs reported that they do not work with producers licensed in the state of Colorado to enroll members. The DOI notes that HCSAs are not required to report the names, business, or license numbers of individual producers. Social media was also used by HCSAs to communicate to members and to market their products. While two HCSAs reported using social media in their marketing efforts, internet searches by the DIO staff indicated that all 16 HCSAs use social media channels to market their organizations and products. In addition, five HCSAs reported Colorado employer groups participating in sharing arrangements, and at least three additional HCSAs have marketing and communication materials to encourage employers to offer their HCSA products to employees and/or to pay a portion of the employees’ monthly required membership dues or share amounts.

Excluded Coverages a Key Focus of Concern for HCSA Members

As noted above, there is no guarantee that HCSA members will have their healthcare costs paid for. The practical effects of healthcare sharing programs for participants obviously depend on what is or is not covered. Many HCSAs reported excluding benefits such as contraception coverage, mental health services, alcohol use disorder treatments, ADHD treatments, prescription drugs for chronic conditions, abortion (with no exceptions for rape or health risk to the pregnant person), and some pre-existing conditions. (Many HCSAs also exclude maternity care. Though this is not a major concern for senior Coloradans, it might impact their caregivers.)

Some of the HCSAs require, in their guidelines, that members first request providers and hospitals to reduce or write off eligible healthcare bills. As noted earlier, some HCSAs also require members to initially request other charity care or government support, including billing Medicare for those who are eligible for that coverage. If one or more of these sources do not provide the needed coverage, it’s possible the HCSA also will not.

Some in Congress Are Seeking Corrective Measures for HCSAs

Members of Congress led by Jared Huffman of California expressed concerns about HCSAs more than two years ago in a letter to the acting chairman of the Federal Trade Commission (FTC) Bureau of Consumer Protection. In it they alleged that the proliferation of HCSAs is “jeopardizing the health and well-being of a reported 1.5 million Americans through deceptive marketing practices and their systemic failure to provide necessary products and services for the consumers to whom they offer ‘coverage.’”

Noting that HCSAs are not legally required to provide the same benefits as certified insurance products, the congressmen said the discrepancies between HCSAs and regulated insurance are “varied and consequential,” pointing to common coverage exclusions such as that for prescription drugs, mental and behavioral health, preventive and wellness services, vaccinations, and pre-existing health conditions. The letter to the FTC also observed that plans can charge higher premiums based on members’ health status, place lifetime caps on benefits, and do not guarantee the payment of medical claims. The congressmen further charged that HCSAs “deceptively market their coverage as comprehensive and equivalent to ACA-compliant products sold on federal and state health care exchanges.” And lastly, that HCSAs in their advertising often say belonging to a healthcare sharing plan is “affordable,” “biblical,” and “faithful” without mentioning that such a plan is not, in fact, insurance. The congressmen suggested that some of this advertising may fit the FTC’s definition of a “deceptive act” that is likely to mislead a consumer.

They credited Colorado as one state that is taking prudent action regarding HCSAs and issuing cautions about them whereas a majority of states exempt HCSAs from all insurance regulation. They similarly commended Maryland and Massachusetts. It’s been reported that Minnesota, Arizona, and South Dakota are considering their own measures regarding HCSAs.

New Federal Legislative Effort in the Works – The Health Share Transparency Act

In November 2023 Huffman, along with a few cosponsors, re-introduced the Health Share Transparency Act, designed to protect people from deceptive practices by HCSAs and expand consumer access to accurate information about health coverage options. The bill’s sponsors say it would ensure that HCSAs provide clear information to consumers before they enroll in coverage. They also say data shows that HCSAs typically deem only half of members’ health expenses eligible for reimbursement. Because of this, “roughly 1.7 million Americans have now enrolled and are at serious risk of being denied necessary treatments and services . . . leaving folks to hold the bag and risk bankruptcy when they need help the most.”

The sponsors say the proposed Transparency Act would:

  • Empower consumers with the knowledge to distinguish between comprehensive, regulated health insurance products and HCSAs by requiring full disclosures during the enrollment process.
  • Provide new data for regulators to assess the threat HCSAs pose to public health, including rates of service denials, enrollment figures, service areas, average out-of-pocket expenses, and the contents of complaints about HCSAs received by the FTC.
  • Ensure health insurance brokers selling HCSAs inform consumers if they are eligible for better, more comprehensive forms of health coverage, including the ACA, Medicaid, or Medicare.

Dr. Gwen Nicholas, Chief Medical Officer of the Leukemia & Lymphoma Society, commended Huffman for advocating for the Health Share Transparency Act. She noted in particular that too often cancer patients cannot receive coverage for the care they need through HCSAs. Randall Rutta, Chief Executive Officer of the National Health Council, said the Transparency Act “will help educate people on the risk of accidentally purchasing inadequate health plans that could lead to both poor health outcomes and financial burden.”

The Health Share Transparency bill is endorsed by, among others, the National Health Council, Leukemia and Lymphoma Society, the Epilepsy Foundation, the American Lung Association, the Interfaith Alliance, the American Humanists Association, Susan G Komen, the National Alliance on Mental Illness (NAMI), and the National Organization for Rare Disorders (NORD).