Broke Urban Lawyer Talks Health Insurance

Ah, health insurance - who ever thought that something so mundane could be so controversial?

What's a broke person to do?

A few things before we start:
Health care - Medical or wellness services to treat or prevent injury or illness.
Health insurance - A program that will indemnify an individual for part of the cost of one's health care in exchange for payment of a monthly premium.

Note - Health insurance and health care are not the same thing. That's a huge pet peeve of mine when people say "health care" when they mean "health insurance". For example, I don't have health insurance. But I see the doctor multiple times per year and see the chiropractor weekly - I just pay for it myself. No health insurance, excellent health care.

Prior to the passage of the ACA, I had no health insurance because I decided that my limited money could be better used for other things, and nobody objected to my rational choice. After the passage of the ACA, I still had no health insurance because I decided that my limited money could be better used for other things (like doctor's visits - I could afford health insurance or health care but not both, so I skipped insurance, preferring to pay for care), and suddenly the government thinks my poverty is worthy of a fine. Only a massive bureaucracy could come up with something so perverse as a fine for being poor.

I saw three options:
1. Pay the fine - lining the pockets of the IRS.
2. Buy insurance - lining the pockets of the insurance companies.
3. Think like Captain Kirk and come up with a way to win the no-win scenario.



I almost bought insurance this year. I don't qualify for subsidies (which is fine; the government doesn't owe me a subsidy), so it was full price for me. The cheapest plan available to me was $250 per month with a $6500 deductible. My annual cost of care, paying out of pocket, is somewhere in the $2000 range, so I decided I would rather pay the fine.

• Cost w/o insurance: $2695 ($2000 in medical expenses, $695 fine)
• Cost w/ insurance: $5000 ($2000 in medical expenses, $3000 in premiums)

Kind of a no-brainer.

However, hope springs eternal, and my law practice is picking up. Since the fine is tied to annual income, I had to redo my calculations for 2017. I don't know how much I'm going to make next year, so I have to guess at what the fine would be.

Health insurance is getting even more expensive. The document review gig I work at provides insurance as long as I'm working 30 hours per week, but it's temp work, so there's no guarantee of my hours. Open enrollment was in September for a plan year that ends in June, and I chose not to enroll at the time, so even if I want to, I can't enroll until June. The cheapest plan was something like $175 per month (I don't have the paperwork anymore), and it was comparable to the marketplace plan discussed above. Open enrollment for marketplace plans started today, and for science, I decided to see what the costs were this time around. They skyrocketed - the same crappy plan I almost bought last year is now $450 per month. In some parts of town, that will get you an entire apartment!

I'm going to make a conservative assumption and guess that I'll make around $40,000 next year. Here's the cost comparison calculation:

• Cost w/o insurance: $3000 ($2000 in medical expenses, $1000 fine)
• Cost w/ insurance: $7400 ($2000 in medical expenses, $5400 in premiums)
• Cost w/ insurance on the work plan - for reference, since I can't actually get on this plan: $4100 ($2000 in medical expenses, $2100 in premiums)

A few weeks ago, I read an article about one of the ways to get an exemption from the requirement to purchase insurance - something called a "health care sharing ministry". Before reading the article, I thought it was some sort of religious exemption for people who don't do modern medicine. But it's not. A health care sharing ministry is a group of people with common beliefs who share medical expenses. It's sort of a medical payment co-op if you will. They're not regulated by state insurance boards, but they pretty much operate like high deductible insurance plans.

There are a few of them that are certified as complying with the requirements for an exemption from the individual mandate. I didn't think much of it until a friend posted on Facebook shortly after I saw the article that she was planning on joining one because it was cheaper than insurance.

I looked into a few. They all have different requirements and costs, but they're fairly similar. Some are overtly religious, and some are a little less so. The major players are Samaritan Ministries, Christian Healthcare Ministries, Christian Care Ministry, Liberty Health Share, and Altrua HealthShare. Despite what the names may sound like, they're not churches. Here's a good blog post that summarizes what they're all about. (The blog post is a few years old and expresses hesitation that Altrua may not be exempt. From Altrua's own website is a copy of the letter confirming their exemption from the ACA individual mandate.)

The plans for someone my age range from $100 on the low end to $450 on the high end. Obviously I eliminated the $450 plan right away.

Two organizations came in around the $100 mark - Christian Care Ministry and Altrua HealthShare. I ended up choosing Altrua HealthShare for two main reasons. The first is that the "member responsibility" (basically the deductible) is $4500 as opposed to the $10000 for Christian Care Ministry. The second reason is that Altrua is more theologically open. Christian Care Ministry requires a letter from one's pastor and the signing of a statement of faith. The statement of faith is 99% something I'm on board with, but there's one part of it that isn't quite nuanced enough for me, so I would feel dishonest signing it. Plus, I'm often very skeptical of organizations that tout their Christian character and use it for boundary maintenance because they inevitably end up changing "Christian" from meaning "believer in Jesus" to "person who believes exactly like I do", and I didn't want to risk my ACA exemption over theology or denominational affiliation. Plus, I don't really want to get a permission note from my ecclesiastical leader just to buy non-insurance.

Altrua's statement of faith is “The person must have a religious conviction of the importance of helping others and/or maintaining a healthy lifestyle as outlined in the Statement of Standards contained in the membership application.” I can get on board with that. No theology necessary.

Adding this into the calculations above:

• Cost with insurance alternative: $3200 ($2000 in medical expenses, $1200 in monthly not-premium costs)

This makes it comparable in cost to just paying the fine, assuming a $40,000 salary. If I end up having a good year and earning more than that, it's cheaper to do the health care sharing ministry. And if I end up falling and breaking my leg, I'll be able to get some help with that. Plus, I'll feel better knowing that my money is going toward helping actual people with their actual medical expenses instead of lining the coffers of the IRS.

Those are the pros.

Now for the caveats:

• Since it's not insurance, they can deny people for pre-existing conditions.
• They have lifestyle requirements such as no smoking, no illegal drugs, no sex outside marriage. (That last one is probably the biggest issue for many people who would otherwise benefit from something like this, but for people who are either married, or who aren't getting any anyway, may as well save some money.)
• Since it's not insurance, they have no legal obligation to pay any expenses. If the members' expenses exceed the amount brought in in a given month, there may not be enough to go around, and you might be stuck with the bill anyway.
• The preventative services required to be covered by ACA-compliant insurance plans are not required to be covered by these plans. Most plans don't cover routine care and are only for emergency expenses like major illness or injury.
• Monthly payments aren't tax deductible as health insurance premiums because it's not insurance. Also, even though the organizations are 501(c)3 organizations, monthly payments aren't tax deductible as charitable contributions because there is value given in exchange for the payment (namely the right to participate in the not-insurance).

 I'll be signing up for the plan sometime later in the month (after payday), and I'll write a follow-up post in a few months to give a review of how I like it.