An obscure health insurance alternative is seeing tremendous growth. But there’s a catch.

Fed up by unaffordable costs and insurance denials, more and more Americans are fleeing the conventional health care system. Many are seeking to cut out the government and insurers entirely by pooling their money together to cover their own bills, turning to what are called health cost-sharing ministries. Originally a faith-based alternative for those with religious objections to traditional insurance, this uniquely American way to pay for medical care has been secularizing and surging in popularity over the last decade, alongside growing distrust in our health system.

These plans superficially resemble health insurance and often sell themselves as a more affordable way to cover medical costs. Members pledge to cover each other’s health care expenses, typically making monthly payments to the organization and then submitting their bills to the group when they receive care. They also commit to a set of ethical or moral principles defined by each group, usually reflecting their origins in Christian churches.

These groups have been around for decades; Christian Healthcare Ministries claims to be the first in the nation, founded in 1981, and traces the arrangement’s structure to biblical roots. But for years, health care sharing ministries remained a niche product. By the mid-2000s, membership was a mere 200,000 people, according to the best estimates. (Because they are largely unregulated, data on these plans is limited and may undercount actual enrollment.)

Then the Affordable Care Act (ACA), also known as Obamacare, passed in 2010, generating a fierce conservative backlash. Devout Republicans wanted to opt out. Health cost-sharing ministries offered them a path: In deference to cost-sharing ministries’ traditional role in serving small religious groups, people enrolled in a ministry were exempt from the law’s new individual mandate that required Americans to enroll in an ACA-compliant health insurance plan.

Enrollment in health cost-sharing ministries skyrocketed, up to an estimated 1 million people in 2018. Formerly explicitly Christian ministries began to rebrand with more secular language, loosening their membership requirements to remove requirements for members to adhere to a specific religious faith, instead stipulating that they follow more generic ethical principles such as supporting other people and sharing a belief in personal accountability. Aggressive marketing and rising costs for conventional insurance contributed to the boom: By 2023, an estimated 1.7 million Americans had become members of one of these health cost-sharing programs. Slowly, then quickly, an alternative health care system without conventional health insurance was being built. 

But these arrangements are unlikely to be a viable long-term solution to the health care affordability crisis. They may claim to avoid the high costs and administrative headaches of regular health insurance, but they also lose the all-important scale that makes those plans financially sound. News reports of people who joined a health sharing ministry only to face astronomical medical bills or denials when they had a serious health situation have become plentiful. State regulators are increasingly expressing concern about the consequences for consumers, but most states also have laws protecting these plans from oversight because of their ostensibly religious nature.

This is the state of US health care: The traditional system has become so busted that people are willing to bet on themselves and a small group of peers and hope for the best. But that salvation is a mirage, one that leaves them vulnerable to the same overriding problem that Americans with traditional insurance rightfully complain about: Their health care is still too damn expensive.

Why health cost-sharing plans are growing

The story of Tony and Felicity Dale and their company Sedera charts the evolution of health cost-sharing ministries from a niche carveout for the deeply religious to an increasingly competitive alternative to the Aetnas and Anthems of the health care system.

Tony Dale, a British-born doctor who had moved to the US, had major knee surgery in the mid-1990s and, having grown up under the UK’s single-payer system, was shocked by the size of his medical bill and significantly negotiated it down with the hospital. 

While navigating that costly bill, Tony came into contact with a Christian cost-sharing ministry, which shared some sensibilities with the couple’s missionary work. The Dales started a consulting business, the Karis Group, using Tony’s medical knowledge and their experience negotiating his medical bill to help the small cottage industry of cost-sharing ministries. (“Karis” means “grace” in ancient Greek and is a common branding in Christian circles.) They worked with health cost-sharing ministries to help them negotiate with providers on prices, just as larger insurers do. 

By 2014, the Dales founded Sedera, a new health cost-sharing program, stripped of the direct Christian references. You’d have to look closely to notice the religious influence: “Do unto others as you would have them do to you,” stated in the company’s ethical principles, is as explicit as it ever gets. 

“Why would these sharing organizations only take care of Christians? Why, if we’ve got a godly principle that works well, wouldn’t we as Christians willingly give it to a world that desperately needs answers on how to handle medical costs?” Tony Dale said in a 2020 podcast interview. “That became the genesis out of which Sedera was formed.” Sedera was named the fastest-growing small business in Austin, Texas, in 2019.

Billed as “an affordable way for managing health care costs,” Sedera is partnering with direct primary care clinics — groups of doctors who, much like the people joining health cost-sharing ministries, try to escape the conventional medical system by not accepting traditional insurance. Instead, patients can pay yearly or monthly membership fees to become members of the primary care clinic while signing up for a Sedera plan. In exchange, they can see a primary care doctor whenever they like, get referrals for specialists, take advantage of wellness programs and other lifestyle perks, and, at least on paper, enjoy protection for catastrophic medical costs if the need arises.

One such partnership is with Big Tree, a direct primary clinic in Columbia, Missouri, that opened in 2017. Patients who join the clinic can also sign up for Sedera’s cost-sharing program at a discount to cover their expenses for physicians and hospitals who are outside of the Big Tree group. You pick an “unshareable” amount between $500 to $5,000 annually (kind of like a deductible or out-of-pocket max in normal health insurance plans) and pay the monthly fee (sounds like a premium). There is no provider network, so the plan says you can see any doctor or go to any hospital you like.

It is in effect a full-service medical system in which patients are not protected by insurance regulations — and more health cost-sharing ministries are expanding their reach in similar ways. In 2019, Kingdom HealthShare Ministries re-branded as OneShare, secularizing in the same way that Sedera did a few years before. Other cost-sharing groups have forged relationships with direct primary care clinics, promising to remove all the frustrations of the traditional system. 

These products increasingly look less like niche arrangements for the deeply religious and more like a conventional health program. Analysts from the Commonwealth Fund wrote in 2018 that state regulators were concerned some health share ministries “appeared to be functioning in ways that differed from their original intent” after their market share increased with the ACA’s passage. Many are now functioning effectively as health insurance rather than as a special carveout reserved for small religious groups — but are not regulated as such. 

The fear among regulators and consumer advocates is that patients will be confused: These plans have monthly contributions (even if it’s not called a premium), and patients can often choose an amount of money they will pay out of pocket before making a claim (but don’t call it deductible). Members may think that they enjoy the same financial protections as people enrolled in employer-sponsored or ACA-compliant plans — but they don’t. 

These plans can, for example, refuse to cover services for preexisting conditions. Patients, including some who have joined Sedera, too frequently don’t realize that until it’s too late.

The risks of health cost-sharing ministries

Legally, health cost-sharing ministries are not health insurance, they do not guarantee compensation for medical claims, and they are therefore not subject to the same rules and regulations that apply to comprehensive health insurance. In addition to exclusions for preexisting conditions, they can omit coverage for certain services that are mandated for regulated insurance, like pregnancy care, prescription drugs, and emergency services, and they have broad discretion to limit payments for services they do cover.

The ministries are already unregulated under federal and state insurance laws, and more than 30 states have explicitly exempted them from those rules in case an ambitious regulator were to try to go after them. Three states — Tennessee, West Virginia, and Utah — put so-called safe harbor laws on the books in the past year, and Ohio’s legislature is advancing its own bill to do the same. This has been a quiet crusade among influential conservative groups. 

So despite often being sold by insurance brokers, having features that resemble premiums and deductibles, and advertising coverage of medical bills, health cost-sharing ministries don’t have the same consumer protections as employer-sponsored insurance or individual coverage under the ACA. A recent Colorado state regulator’s report indicated that these groups cover a lower share of eligible medical costs than a traditional insurer does. And patients rarely have much recourse.

NBC News reported last month on one couple, Rachel Kaplan and Andrew Sheffield, who had signed up for a Sedera cost-sharing plan at the suggestion of their doctor after Rachel became pregnant. They paid about $150 per month to become members, but when they tried to submit hospital bills after their baby was born via C-section, their requests were denied. 

The company pointed to the fine print of the couple’s plan: Childbirth bills were not eligible for cost-sharing during the first year of a membership. Eight of the 10 largest health care sharing ministries in the US have similar restrictions, according to NBC, the kind of limitation on benefits that is expressly prohibited for conventional health insurance.

“We basically gave Sedera our money and received nothing in return,” Kaplan told the network. They were stuck with $7,000 in bills, which they were still trying to pay off a year after the birth.

In 2022, NPR covered the story of a Christian pastor who had enrolled in a Sedera plan — $534 per month, plus $118 per month to join a direct primary care clinic — only to be denied when he submitted $160,000 in bills for a heart procedure. The plan excluded coverage for preexisting conditions for the first two years of membership, and the pastor required surgery 16 months in. The company eventually contributed $15,000 toward his cost but, even after negotiating down his balance, the pastor was faced with nearly $38,000 in bills that he would have to pay himself.

Sedera, which responded to the NPR report by saying it is important for customers to read their membership agreement, is hardly the only ministry to face these complaints. A 2023 ProPublica investigation documented how the family that owned Liberty HealthShare was taking the $300 million they collected annually from members and spending almost half of it on other businesses owned by the family and their friends — all while leaving terminally ill cancer patients with thousands of dollars in unpaid bills. 

DIY solutions can’t fix US health care

Health cost-sharing ministries have started to attract more scrutiny from regulators, but their hands are often tied. Media coverage of the consequences that patients face without consumer protections doesn’t seem to be discouraging enrollment either, as, if recent growth trends continue, the number of ministry members will be on pace to double in less than a decade.

They are likely to find a friendly partner in the coming Trump administration, which could further goose enrollment. Within a few weeks of Trump’s election, the leaders of a Catholic health care sharing ministry wrote him a letter with a policy wish list.

Trump’s return to power could also facilitate the expansion of other non-comprehensive health insurance-like products, as we saw in his first term, when he sought to expand the reach of “short-term” health insurance plans that do not have to comply with the ACA’s rules on preexisting conditions. Trump proposed making these renewable for up to three years, a massive increase over their existing three-month limit.

The risks of those products are much the same as they are for health cost-sharing ministries: Patients may think they are signing up for a plan that will cover all of their medical costs, for a cheaper price than a normal health insurance plan, but the fine print can lead to their claims being denied when the bills come due. These plans particularly advertise themselves to healthy people who may be willing to bet on their good health in exchange for a lower monthly payment. But the more healthy people drop out of the ACA-compliant marketplaces or employer-sponsored insurance, the more expensive those plans get for other people.

There is a morbid circularity at work here. The ACA had sought to eliminate skimpy insurance plans by requiring insurers to cover everyone and cover a broad suite of services, making the plans more expensive but more valuable. But the ACA’s subsidies, which were supposed to offset the expected higher costs, were not generous enough for many people to make the ACA plans affordable.

So a lot of Americans, motivated by either financial necessity or ideological opposition to Obamacare, flocked to insurance-like alternatives that include health cost-sharing ministries. In that market, they could find a cheaper monthly payment. But their coverage could once again be denied for preexisting conditions and their benefits could be withheld for a waiting period that lasts for years, as was the case with conventional insurance before the 2010 health care law.

These companies sell themselves as offering an escape from a broken health system — and they are half right. When four in 10 Americans say they are skipping necessary medical care because of the cost, our medical system is broken. Americans are increasingly dissatisfied with the health care system overall, and most think the quality of medical care is getting worse. It is easy to see the appeal of a health share ministry, especially if you don’t expect you’ll need a lot of medical care: If health care is too expensive, let me at least sign up for something that still looks like an insurance plan — but comes at a cheaper price.

The problem is that insurance doesn’t exist for when everything is fine. It’s for when things go wrong. Even the youngest and healthiest of us have unexpected medical emergencies. And the ministry plans might not even cover regular, planned medical care, like a pregnancy.

Taken to the extreme, such DIY solutions are really no different from putting up a GoFundMe for hospital bills: They rely on convincing a bunch of strangers to pool their money and hoping you gather enough to pay the balance. But much of the time, you don’t raise enough.

The problem goes back to the foundation of the US health care system, under which medical services are treated more as a commercial product than a social good. As eminent health care economist Uwe Reinhardt once wrote, every other developed Asian and European country has chosen to treat health care as a social good — except the United States. 

All of those nations have managed to guarantee health care to every citizen, through a wide range of different health insurance schemes. Their single shared feature is that, rather than trying to pool health care costs among a group of church members or even employees at a large company, they spread the costs across all of society, and they aim to control costs holistically. The US instead continues to tinker with a patchwork system in which medical costs are not as tightly managed, the risk is not so widely spread, and therefore care is unaffordable for many people.

Health cost-sharing ministries have expanded to attract more and more of the nation’s disaffected patients, by appealing to our consumer instincts with the promise of a lower monthly payment. But they can’t replace genuine health insurance when it’s most needed. 

Some of these groups may be sincere communities trying their best to help each other in a profoundly broken system. Others may be outright frauds. Either way, they are not the cure for what really ails American health care.