Alternatives to Required Insurance
A couple of weeks ago I wrote on the topic of the individual responsibility requirement of the ACA. Of course, that leads to the tax consequences of your choice to either get insurance or not to. But there are a couple of additional alternatives that you may want to consider. One of them is a Health Care Sharing Ministry and the other is a Direct Primary Care arrangement. Under current law, both of these qualify for exemption from the tax penalty for the uninsured, but only if tied to a high deductible health policy. Let’s look at these two in a bit more detail
2014 was the first year for the ACA’s personal responsibility requirement. Several provisions were watered down to allow for a transition. But even so, I had several clients who were stung for either not getting the insurance at all, or for overestimating their income so that the premium tax credit they received had to be repaid.
If you simply failed to get coverage last year, you and your family paid less than $100 per person in penalties. This charge increases for 2015 $325 per adult and half that per child, up to $925 for the family. And that goes up more in 2017. Those who received the premium tax credit and then have to pay it back may be tapped for the entire amount of the credit should their income increase.
But both of these are possibly less than the actual cost of health insurance under the marketplace. So what should someone do to comply with the law, minimize costs and still protect themselves and their family from the costs of health care? Under certain circumstances, the health care ministry or the direct primary care schemes make a good deal of sense.
A health care sharing ministry is a not-for-profit organization in which members pay each other’s health care costs. The details vary, but in general each member is assessed for their share of the total costs of the group. Notice the word “assessed.” This is not a premium payment systems, but more a subscription system similar to Lloyd’s of London. Periodically payments must be made into the funds to replenish those payments made on members’ behalf. There are four such groups (that I found), three require the members to be Christians, and the third requires members to adhere to a belief in religious freedom. Provided the members have a high deductible health care policy, this program satisfies the insurance requirement of the ACA. For more details and sign up information, go to Samaritan Ministries, Christian Healthcare Ministries, Christian Care Ministry, or Liberty Healthshare.
Another method growing in popularity as an alternative to primary health insurance is direct primary care. This is also often called concierge medicine. The patient pays a monthly fee to the organization–often a single physician or physician’s group–and has all their primary medical care done by that practice. This will include simple blood tests and other less technologically involved medical procedures. Membership often costs as little as $100 a month, and may be a good idea for someone with little or no regular primary care needs. The potential gotcha is that any complex testing like MRIs and any specialists are at the patient’s expense. Also, the doctors involved with these practices cannot accept insurance or Medicare payments from any patient in their practice. And, the payments to the practice are not eligible for deduction since the law says they do not constitute medical care. However, if coupled with a high deductible health care policy, they do qualify for exemption from ACA penalties. These kinds of practices are all local, so you will have to check the web for those near you. But, be sure to talk to some folks locally who have used this method to get a feel for their experiences.
Like all financial decisions, the choice of one of these alternative plans must be made carefully. Each has limitations and “gotchas” that you really need to be aware of. And, your health care needs must be paramount for your own–and your family’s–well being. Those who promote these plans will, naturally, emphasize the benefits of their program. But don’t forget to check out the equally important limitations which they should tell you about in their material.
But the costs of even mid-level plans, based on the marketplace premiums in your area, are likely to be surprisingly high. So checking out alternatives makes sense. There is a little less than a month before the open enrollment closes (12/15/15 is the deadline). Take some time to check it out, unless, of course, your employer already provides a plan, or you are on Medicare. Even if these suggestions don’t make sense for you, at least you will be informed about your choices.
I am not promoting or trying to debunk either of these methods, or any of the providers. This, like always, is for educational and informational purposes only. Just be careful and consider ALL alternatives to providing for your health care needs.
Take a minute to comment if you have had experience with a health care sharing ministry or a direct care physician. I’m sure many other readers would like to have that information.