For the first time (ever), I’m excited about our health plan for the year.
Health insurance is expensive, particularly when kids or spouses don’t receive the benefit of employer subsidies. I’ve tried all kinds of different ways to reduce our health insurance spend. We’ve put the kids on my wife’s insurance (when she was working) and I went alone on my employer’s plan. We’ve put the kids on my insurance and put my wife on a marketplace plan. We’ve put the kids and my wife on a marketplace plan and I went alone on my employer’s plan.
First, we should probably define what makes a plan “expensive.” For some people, “expensive” refers to the bi-weekly deductions from their paycheck, or their monthly payment to the marketplace or COBRA or something like that. For some people, “expensive” refers to the cost of meeting the deductible amount. In my experience, most people want to pay as little as possible in their paycheck and still have coverage for the big things that could happen. (There are exceptions, of course. I recently had a conversation with a friend who had gone with their “buy up” plan for years to lower the deductible “just in case,” but the extra premium cost was WAY more than they had been spending at the doctor. They dropped back down this year and will save thousands of dollars in premiums.)
For our family, the most recent “cheapest” “solution” has been two high deductible plans eligible for HSA: the kids coming with me and my employer subsidized insurance, and my wife going on a marketplace plan. It was cheaper than any other combination, but even that has been expensive. No matter how creative I’ve tried to get, it’s been the same story every year:
- We pay a lot for the premiums on the cheapest HSA plans we can find.
- We never get close to meeting the deductible (which is basically doubled, since our family is usually on two separate plans).
- We complete the year with 95% of our deductibles left to be met.
Over and over again. Every single year. Really the only benefit our insurance has been giving us is the discount on our hospital, urgent care, and ER bills. Which, admittedly, is no small thing, but we hardly ever use our insurance. (Also, another plus is that the triple-tax benefit for HSA contributions is really awesome. Did you know that you can invest your HSA contributions?)
Other than the nice HSA contribution benefits, though, our yearly health insurance premiums budget was basically just a giant inefficient black hole that sucked up a ton of our money. We try to live and eat as clean and healthy as we can. We spend a lot on supplements, vitamins, and a gym membership. It would be nice if there were some incentive or discount for spending a lot of money and time to keep ourselves as healthy as we can.
Then, just over a month ago, an offhand comment introduced me to the Medishare product. The first thing that grabbed my attention was the monthly “premium” savings between their program and what I was paying. Now, I put “premium” in quotations because, as Medishare is quick to point out, they aren’t insurance. They intentionally use different terminology to make that distinction. They are a private Christian organization founded with the purpose of helping Christians share each other’s health costs. The idea is, after signing up with Medishare, your medical visits are run through their PPO network pricing (subject to typical PPO shenanigans as with any insurance), and you pay your bills as normal, up until your Annual Household Portion is reached. After that, anything above and beyond is paid by the Monthly Share Amounts of everyone else participating in the Medishare program. Of course, there are a set of rules and restrictions that limit the number and nature of the claims that become eligible for sharing. This sounds scary, but it’s really not. Reading through their guide, the rules make sense and are necessary for Medishare to offer as low rates as they do.
I won’t go into all the details here–perhaps later in a formal review–so please do your own research and consult with someone knowledgeable before making a decision. I’ve had to take what I read online with a grain of salt (shocking!). In my research, I found reviews where people complained about things that Medishare makes very clear in their marketing material. For example, there are rules on how pre-existing conditions do or don’t have their costs shared, and there are rules on lifestyle living–no smoking, illegal drug use, or excessive drinking. Things like that. (The types of things that cause actuarial tables to drive monthly marketplace premiums up).
Here’s what I like about it personally for our family.
- Dramatic monthly savings for our “Monthly share” portion. We’ll save at least $4,500 this year on this part alone.
- A lower annual max out of pocket cost (they call it Annual Household Portion) compared to our current deductible.
- Further discounted monthly savings for people who meet BMI and blood pressure requirements.
- Free tele-medicine through MD Live. Perfect for those small things when you don’t want to spend $150 at Urgent Care and just need a prescription to take care of it. We’ve never used a service like this before, and I understand that it’s not a new technology, but getting this for free as an add-on is a great bonus.
- We’re already used to high-deductible health plans (HDCP), so the structure with Medishare is basically the same. No surprises there.
- The philosophical/community aspect. They reference the book of Acts (2:44-45, 4:32-35) in the idea of sharing to cover other believers’ health costs. Our monthly share payment isn’t funneling into some faceless corporate structure, it’s going to California, or Minnesota, or Colorado to pay for another family’s health care costs! And vice versa. All of a sudden, our monthly payment becomes a productive expense that is actively helping another family. Very cool! I don’t mind making a monthly payment toward that at all.
Here’s my concerns that I found an answer for:
- The network. The network is probably terrible, right? According to my research, it’s not. They are easily identified having a legitimate PPO network: “Multiplan: Private Health Care System“. All of our current doctors and local hospitals except one work with the plan. Many big name hospitals across the country also work with the plan to discount medical bills. I called my wife’s doctor and found that they hadn’t yet formally signed a contract with that PPO, but they would be “absolutely willing to work with the plan in the meantime.”
- The discounting applied through the PPO network. There’s no point in having a PPO network if the discounting is terrible. Again, I did not find this to be the case. I discovered that several acquaintances were actually on the Medishare plan already, and had had major surgeries or pregnancies with no troubles in getting costs discounted and shared. One friend made the comment that the total pregnancy and delivery bill with their Medishare plan was actually less than when they were with (the biggest) nationwide insurance provider available.
Numbers don’t lie:
I ran the numbers and it’s staggering how much more we have been paying than we needed to be:
Yes, since we had our first child 3 1/2 years ago, we’ve spent $28,900 on our health insurance premiums (and yes, that includes the pre-tax deduction savings) for a total out-of-pocket max of around $17,000 per year (remember, two individual HSA plans). Had we been with Medishare (and assuming the same rates as today), we would have spent $14,700 over that time period for an annual out-of-pocket cost of $8,000 per year. And if we qualified for the “healthy” reduction in monthly cost, it would have been $12,348 for those three and a half years. That’s a savings of $16,500 over 3 1/2 years, while cutting the max out-of-pocket in half.
So, clearly, I think it’s a great concept (I have since discovered that there are other alternatives too), and I wish I would have found out about it sooner. In the interest of full disclosure, I didn’t look into Medishare soon enough for it to make sense for our whole family to get on. This year I’ll be on my employer’s subsidized HSA plan to build up our HSA funds. Wife and kids will be on Medishare, a perfect pairing in this situation.
The customer service that I’ve received so far on the phone with Medishare has been a breath of fresh air after the experience we had with our Marketplace plan. Is it possible to be excited about a health plan? For the first time ever, I am.
How have you been creative to cover your family’s health expenses? Have you used a health-sharing service such as this?
Very nice article Greg, and I agree with you that both the PHCS network and discounting have been exceptional. Almost all local doctors/specialists have been in-network for us, and Medi-Share has negotiated significant discounts particularly off lab work. I also have a video up about my experience which I’ll post here if that’s OK: https://www.youtube.com/watch?v=aNSUTpk1bMA
Keep up the great work!