A legislative effort to require reporting by health care sharing ministries in Colorado passed its first hurdle Friday, receiving approval from the House Health and Insurance Committee.
Health care sharing ministries have surged in popularity in recent years, with supporters describing them as cheaper alternatives to insurance and opponents calling them scams. If enacted, House Bill 1269 would require health care sharing ministries and other non-insurance entities that cover medical costs to submit annual reports to the state, including how much money members pay versus how much in medical bills the entities cover.
“Currently, very little information is known about these arrangements,” said bill sponsor Rep. Susan Lontine, D-Denver, adding that many people don’t recognize the “financial risk” of joining such entities. “People need to know why they are priced lower and how they may impact them long-term.”
Health care sharing ministries, also called faith-based health care, are nonprofit organizations that share health care costs among a group of people. The members — who are usually part of the same church or religion — often pay monthly dues to the ministry, and, when one of the members receives a medical bill, the ministry can use the collected money to cover the costs. They are not insurance and do not guarantee payment for medical claims.
The ministries say they can reject bills for any number of reasons, including moral objections to medical issues resulting from premarital sex, smoking, alcohol use or obesity. They are also not required to cover essential care and can deny coverage based on pre-existing conditions or religious beliefs.
The ministries say they’re a less expensive, belief-driven and community-orientated way to address medical expenses, comparing themselves to credit unions.
Joe Anderson, who opposes the bill, said his health care sharing ministry of 10 years has allowed him to pay his family’s medical bills while working part-time jobs that do not provide insurance — including as a local pastor and an Englewood City Council member.
“I think it’s in the state’s best interest and the government’s best interest to find ways to support people who are making community work,” Anderson said, saying the proposed bill would “put a bureaucratic and administrative weight on it that could ultimately drive the costs up or make it more difficult.”
Health care sharing ministries have seen a boom in membership thanks, in part, to rising unemployment during the COVID-19 pandemic resulting in people losing employer-provided insurance. In 2010, less than 200,000 people were part of health care sharing ministries. Today, around 1.5 million people are members, according to the Alliance of Health Care Sharing Ministries.
In Colorado, between 50,000 and 60,000 people use health care sharing ministries, the Colorado Consumer Health Initiative estimates. However, the state doesn’t actually know how many health care sharing ministries are in Colorado or how they operate, including how much of their members’ money actually goes towards paying medical expenses.
Supporters of the bill say it would help collect information about bad actors using health care sharing ministries to scam people who are unaware that they don’t have to cover their medical bills.
Sara Froelich, executive director of Chronic Care Collaborative, said her sister-in-law entered a health care sharing ministry in Aurora and was assured her medical expenses would be covered. After becoming pregnant, Froelich said her sister-in-law got $7,000 worth of routine prenatal tests, which the ministry refused to pay for because the pregnancy wasn’t “pre-approved.”
“After countless calls, hours, days, years now on the phone, they paid 6% of that $7,000. They sent her to collections. My nephew is now 4 and she still is unsure if this issue is resolved,” Froelich said. “Most consumers don’t know that cost sharing arrangements are playing by different rules, and they can be stuck with enormous bills.”
Salena Prinzmetal with Colorado Consumer Health Initiative said her organization has received dozens of complaints from members of health care sharing ministries that refused to pay their medical expenses, ranging from $250,000 in emergency surgeries to cancer treatments to routine doctor’s visits.
Under the proposed bill, health care sharing ministries would have to report to the Division of Insurance the number of its members, how much money is collected from members and how much money is used to cover medical expenses, among other requirements. This information would be made public to inform prospective members and to lay the groundwork for further state action if necessary, Lontine said.
The House Health and Insurance Committee advanced the bill in a 7-4 vote Friday, sending it to the Appropriations Committee for consideration. Committee members were split along party lines, with all Democrats in support and all Republicans in opposition.
Rep. Mark Baisley, R-Roxborough Park, said he doesn’t want health care sharing ministries to report to the Division of Insurance, calling the agency “hostile” to the ministries because it regards them as competition to insurance companies.
“I fear for what may come,” Baisley said. “This would inappropriately bring the industry under the authority of the Division of Insurance when this is very deliberately not insurance. It’s not an appropriate place within the state government for regulation.”
Baisley sponsored House Bill 1198 to compete with HB-1269. Baisley’s bill sought to require health care sharing ministries to make it clear they’re not insurance by providing a public notice that they might not cover some medical expenses and that members are responsible for their own bills. The ministries would also have to get written acknowledgement from members.
HB-1198 — backed by the Alliance of Health Care Sharing Ministries — was rejected by the House Health and Insurance Committee Friday in a 1-10 vote, with only Baisley voting in support.
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