More than 300,000 Americans bypass the Affordable Care Act's individual insurance mandate by buying limited healthcare coverage through faith-based collectives, the San Jose Mercury News reported.
The Affordable Care Act allows individuals to opt out of the insurance mandate and avoid penalties if they object on religious grounds, the newspaper noted. Instead, they turn to "healthcare sharing ministries," where participants pay a monthly fee like a premium for coverage that kicks in to cover major costs. Routine and preventive care is not covered.
The faith-based plans require participants to a "biblical lifestyle" by shunning drugs, tobacco and sex outside of marriage, among other restrictions. The monthly fees tend to be lower than insurance premiums, but the plans provide less coverage, the newspaper reported.
The plans also can reject applicants with pre-existing conditions and can impose lifetime benefits caps, unlike traditional insurance plans bound by Affordable Care Act rules and state insurance requirements.
"My general message when asked about healthcare sharing ministries is very much 'buyer beware,'" Sabrina Corlette, a project director at Georgetown University's Health Policy Institute, told the newspaper. "If the company does not pay your claim or denies coverage for service, or God forbid, they go belly-up, there is no protection for the consumer."
Advocates noted in the article that the federal government requires that an independent accounting firm annually audit the nonprofits and that members have opportunities to appeal rejections of claims. Consumers can also file complaints with states' attorneys general because of the ministries' nonprofit status.
The Mercury News noted that the healthcare ministries provide a second way to opt out of Obamacare on religious grounds. In June the U.S. Supreme Court ruled that many closely held private businesses like the craft-store giant Hobby Lobby do not have to offer employees certain types of contraceptives they consider immoral.
The justices ruled 5-4 that the Religious Freedom Restoration Act requires the government give family-owned companies the same protections afforded to nonprofit organizations.
The Supreme Court ruling and the individual mandate exemptions on religious grounds aren't related, but both poke potential holes in the Affordable Care Act's intended healthcare safety net.
Shortly after the ruling, insurers told FierceHealthPayer they were looking to the Department of Health and Human Services to issue new guidance reflecting the court's decision.
For more information:
- here's the Mercury News article
How sharing ministries steer members away from actual health insurance
Has the demise of employer-based insurance begun?
How does contraception ruling impact insurers?
Contraception case could affect other coverage decisions
ACA: Stepping stone to single-payer healthcare?
Supreme Court delays contraceptive mandate enforcement for Catholic nuns