Buyer beware on 'health care sharing ministries'

Opinion editor's note: Editorials represent the opinions of the Star Tribune Editorial Board, which operates independently from the newsroom.

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Open enrollment is the window of time at the year's end when consumers make a critical health care decision — which health insurance plan to buy for the coming year to cover themselves and their families.

Those with coverage through a job typically have a handful of plans to choose from. Those who buy on their own — such as early retirees, farm families or entrepreneurs — have a dizzying array of choices. It's that latter group, currently right in the middle of open enrollment, who should take heed of recent data from Colorado underscoring an old truth:

If something sounds too good to be true, it probably is.

The Colorado state regulators' information concerns a product known as "health care sharing ministries" that may be marketed to consumers shopping for a health plan. In a Health Care Sharing Ministry (HCSM), "members follow a common set of religious or ethical beliefs and make monthly payments to help pay the qualifying medical expenses of other members," according to the Commonwealth Fund, a nonpartisan health policy organization.

It sounds like health insurance. And to someone on a budget, it likely sounds like a good deal, with monthly payments often less, perhaps substantially so, than the monthly premiums for insurance sold through MNsure and other trusted marketplaces.

That can mean big problems. "HCSMs are under no obligations to pay members' claims," Commonwealth said in a new warning last week. Coverage for pre-existing conditions such as cancer, diabetes or asthma may be excluded. So might be other needs, such as preventive care or mental health treatment. In contrast, traditional medical plans "must cover essential health benefits and all pre-existing conditions."

The regulatory gray zone in which HCSMs operate has provided little visibility into their operations. But in 2022, Colorado legislators passed a measure requiring the state to collect data on them. State regulators have issued two yearly reports since then. Open enrollment is a smart time to highlight the findings:

A recent Commonwealth analysis of the Colorado data adds further troubling perspective. One HCSM recently surveyed members, and found that 42% of them had incomes below 200% of federal poverty guidelines. That means they probably could have qualified for medical assistance programs or Affordable Care Act financial subsidies. Either could provide low-cost or no-cost coverage without the gaping benefit loopholes.

There are HCSMs operating in Minnesota. On Monday, the state Department of Commerce advised "consumers seeking affordable insurance options to research legitimate plans available through MNsure." Officials also noted that the agency "does have the ability to take enforcement action should an unlicensed entity engage in the business of insurance."