Summary: This post tells which health insurance option we selected for early retirement and why.
In part one of this series I listed the various health insurance options we considered to cover us during early retirement.
In this part I’ll tell you which one we selected and why.
And there’s a suspenseful ending, so be sure to read all the way through. 馃槈
Early Retirement Health Insurance Options
As a refresher for those who don’t remember as well as a quick summary for those who don’t want to go back and read, here are the highlights from part one:
- I retired early at 52 in August 2016.
- We needed health insurance.
- COBRA and traditional options from Healthcare.gov were very expensive with little coverage unless there was a MAJOR problem.
- We started investigating health sharing ministries as options since they were much more affordable.
- There were three health share ministries in particular that we considered — Samaritan Ministries, Medi-Share, and Liberty HealthShare.
Ok, now we’re all up-to-speed and ready for the decision.
Selecting the Right Health Insurance
It’s not going to surprise many of you to learn that we went with a health sharing ministry. And Samaritan Ministries was our choice.
It really came down to Samaritan Ministries and Medi-Share. Liberty was easier to eliminate for a couple reasons:
- Number of members. Samaritan and Medi-Share both have nearly a quarter of a million members compared to Liberty鈥檚 130,000. When it comes to sharing costs, the numbers do make a difference. These two just seemed more “stable” than Liberty.
- Keeping our own doctors.聽Liberty has a network of doctors and ours were not in it. Perhaps they would join but my guess is they wouldn’t bother for such a small organization. We love our doctors and wanted to keep them.
So then the decision came down to Samaritan and Medi-Share.
Both are great options IMO, but here are the reasons we went with Samaritan:
- Cost. Samaritan Ministries was the least expensive of the three health share options. There are no office co-pays, extra annual fees, or high deductibles.
- Reviews. After reading through many reviews from members of all the health shares, we couldn鈥檛 find one negative comment regarding any experience with Samaritan Ministries.
- Personal recommendation. This was probably the biggest factor for us. We have a couple sets of friends who have used Samaritan Ministries for years. We tracked them down using Facebook (we had lost contact) and talked to them about their experiences. They raved about the organization and had no negative comments. Reading a good recommendation is one thing, but hearing it from the mouth of someone you know and trust is quite another. In particular we were wondering (as many probably are) “Would they pay when we needed them?” Our friends assured us that Samaritan had always paid for them through many years.
- Personal responsibility. Medi-Share and Liberty follow the insurance model of providing a card and processing payments for the member. As such, most people aren鈥檛 even aware of the office visit or procedure fees. Samaritan鈥檚 model is simple and you are 100% aware of the costs of services. You tell the provider you are a cash pay patient and ask for a discount. Most offices will reduce the cost of their services for cash patients since they will save the labor, expense, and time of billing another party. And if you negotiate a discount, Samaritan will apply the amount saved to help cover the $300 per incident portion. We read reviews of members who had no out of pocket expenses because of this.
- Familiarity.聽(FYI, this is my wife’s point-of-view — I don’t remember it at all. Then again, she has the ability to remember minute details from 25 years ago and I struggle to remember what I had for breakfast.) We first heard about Samaritan Ministries when we were doing financial counseling at our church in the mid-1990鈥檚. This was a new ministry at the time, but the model seemed to make sense: pool together resources and provide for other鈥檚 medical needs. We had insurance with my job then, but we recommended Samaritan to those who were self-employed or uninsured. Now that we were one of those uninsured, Samaritan Ministries was a logical option.
- Customer Service.聽Samaritan had the most impressive customer service when we talked to all three. If they were busy, there’s the option to leave a call back number. When we did this, the representative would call back within a half-hour. And even though Medi-Share’s and Liberty鈥檚 representatives were helpful, the difference in talking to them versus Samaritan was like the difference between talking to a business rather than a friend.
- Timing.聽We liked the fact that Samaritan had open enrollment instead of having to begin the first of the month. We conveniently ended insurance at the end of July and began with Samaritan on August 1st, but that鈥檚 not everyone鈥檚 situation. The phone representative at Samaritan was also more concerned that we were covered rather than having our paperwork completed by a certain date.
- Personal connection.聽After the first two months of sending our monthly share to the main office, we knew we’d send our assigned share to another member. Some people may find this a negative, but sending cards and checks directly makes us feel more connected to the other members.
So we took the plunge and joined Samaritan Ministries. We paid our first two months’ shares to the organization and from then on, we’ve received a monthly newsletter with a name and address and we send our share (premium) directly to them.
One cool thing: we recently received a note to pay our share to a couple who just had a baby. What an awesome way to spend your insurance “premium” — sending it to someone who just had such a great event in their lives. We included a congratulations card with our check. 馃檪
Samaritan Ministries’ Performance
Things ran like clockwork for a few months and all seemed well. But there’s still a question in your mind of whether or not this organization will “be there” when you need it. It’s just such a different model than traditional health insurance that it was a big unknown for us. We hoped we had made the right decision.
Unfortunately we were soon to find out when I was diagnosed with basal cell carcinoma (skin cancer).
We were now going to see how well our untraditional health insurance would cover us.
To find out what happened, see Picking the Right Early Retirement Health Insurance: Samaritan Ministries Delivers.
If you’d like more information on Samaritan Ministries, here’s a short, handy request form I asked them to create for ESI Money readers. It takes about one minute to complete and you’ll receive their entire information packet.
Oh gees that is terrible news! My thoughts are with you and the fam! Stay strong and please keep us updated!
I appreciate the concern.
It all worked out in the end…as you’ll see on Monday. 馃檪
BCC? Right after you finally get to retirement? Whoa. Not fun. Pray you’re still in good shape and no reoccurrence.
Excellent set of articles on health sharing. Very interesting to read the experiences of someone who has studied it and then signed up.
Thanks. Appreciate the kind thoughts.
Can’t wait to hear more.
1) I hope the skin cancer turns out well for you!
2) This email and article could not have come at a more perfect time for me. I am retiring very early this morning!
Both love and hate the cliffhangers. I’ll check back soon!
I don’t like them much myself so i don’t do them often.
On this one I either had to break them up or there would be one 5,000-word post. 馃檪
Thanks for the research and sharing info on these alternatives to insurance. A few questions:
1. Did I read correctly from your other post that the max coverage is 250k? Does that mean you buy some catastrophic coverage in addition?
2. How does paying other members work? Every month they send you a bill you pay to a specific person or a bill that gets sent to a pot that is then distributed to members in need? Is the charge always $495/month? Any potential tax consequences of this kind of direct payment or general set up?
3. How do they account for the fact that cost of care varies geography? Or maybe the costs don’t, I’m just assuming it does. Would it mean people from say CA would benefit more than middle America or the south?
4. Drug coverage included?
5. Is the organization run like an HOA where there is some oversight and do they publish financials?
Sorry to hear about your skin cancer, I hope it all works out for you.
Great questions, NotRetiredYet. I had some of the same questions, too.
The 250K limit seems low, when you consider that a week-long stay in a hospital often exceeds this- especially in high-cost states or big hospitals. Or if you have cancer treatments, or an expensive chronic condition. I am curious what people do in those cases.
1. Here’s what the previous post said:
“There is only one plan that covers medical needs from $300 to $250,000. An optional Save to Share plan then covers medical costs above $250,000.” We are in the optional plan.
2. Every month they send us a note that basically says, “Send your $495 to Joe Smith at this address.” So you send it to a person, not a company.
For several of the first months we actually had to send an amount lower than $495. It’s never been higher than that.
As for taxes, my CPA had to file a form that said we were members of a health share which covered us under the ACA. That’s it.
3. I don’t think the premiums vary by region.
4. I do not believe there is drug coverage (my wife would know for sure since she handles the medical issues). We don’t take any drugs, so it’s not an issue we really investigated.
5. It is run by a board and I do not know if they publish financials. I have never looked at the financials of any of my health insurance providers so I didn’t really think to do so here either. If you thinking about financial stability, I think the longevity of operation speaks to that.
Thanks. The cancer has worked out ok so far. I’ll give the details on Monday.
Thanks for sharing your story ESI, and sorry to hear about the diagnosis of BCC. From my experience of working in a large hospital, I’ve heard that these type of cancers are quite treatable and has a high cure rate, so it’s something to just monitor and watch for.
Looking forward to read part III. Nice cliffhanger.
-Mike
Yes, it’s very treatable, thankfully.
Hope you are well and enjoying the summer!
So sorry to hear about the skin cancer. This health sharing idea is really fantastic, but what if you’re not a religious person? Fake it? LOL I see the application needs to be signed by your pastor/priest/preacher.
Ha!
A couple options for you:
1. The shares have various levels of requirements/commitments so some people feel more comfortable with one over another and some people can live with what one requires but not another.
2. I’m not sure, but there could be some non-religious shares out there, so you may want to consider them.
To consider regarding ACA (Obamacare): If you are retired and have a nest egg that is a mixture of pre-tax money (traditional IRA and 401k) and after-tax money (such as proceeds from selling a home) you can manipulate your income to qualify for the ACA premium credit. I only need coverage until Medicare in eight months and by using some after-tax funds for living expenses, can keep my 2017 income under the 400% of poverty level that is the threshold for a couple (about $64,000). As a result, the premium is only $100/month instead of $600/month for me.
Yes, this is a long-term possibility for me as well.
I need to look at structuring my income in a different way as I can’t keep it that low at the present time.
I know, boo-hoo for me. I’m sure people will feel really sorry for me given I can’t get my income low enough. 馃檪
Also, I’m wondering if there will be a new health care plan and if so, what the details will be. Lots still up in the air, but SM seems like a great option for now.
Glad to hear it’s only basal cell. Since you said the results were good, then it was caught in time.
I had it a few years ago. I’m still on schedule for 6 month checkups. I think just one more and I’ll be back to yearly visits. Mine was right on my neck and a few inches needed to be removed. The healing process was a bit slow but it’s really hard to see the scar now.
The treatment costs were not cheap but I was on a comprehensive (and free) medical plan at my job. I just had co-pays. I did not go in requesting uninsured rates. That would make a big difference.
Is Samaritan the one where you have to sign off on your Christian faith? We ultimately chose Obamacare but I had briefly looked into healthshare ministries.
Sounds like our experiences are the same. I never was a big sun tan lotion user, but now I’ve got a wide-brimmed hat and lather up before I go out! 馃檪
I have my first six-month visit in September.
I think all the health share ministries we investigated have requirements regarding beliefs and/or lifestyle. We don’t drink, smoke, do drugs, etc. so it was pretty easy for us to fit within any of the requirements.
Not only do you have to attest to a variety of healthy living questions, you have this, that has to be signed by a church leader (sorry, it didn’t cut/paste well):
I/We attend
Church address
City State Zip
Church phone
Church email
(If someone to whom you are accountable
is providing verification, please describe
the relationship below.)
Pastor Church Officer Person to whom you are accountable
Leader鈥檚 name
Leader鈥檚 signature
Please Print
X Month / Day / Year
Name of Church
To the best of your knowledge, does the member(s) listed in Section One:
(Must not be yourself or another member of your immediate household.)
The pastor of your church, a church officer (if you are the pastor), or some other person to whom you are accountable (if you are in a mission church
or church planting effort) must complete the Church Leader Verification section below.
Church Leader Verification
Date
Phone
Participate in the church or fellowship you attend?
Attend services at least three weeks each month (except for illness, travel, etc.)?
Abstain from the use of tobacco and illegal drugs?
Abstain from consumption of alcohol or consume alcohol only in careful moderation?
Abstain from any sexual activity outside of traditional Biblical marriage?
Yes No
5
Again, none of that is a problem for us.
I thought something like that was the case, needing a church officer to sign off. I can attest to the lifestyle, no problem. But I’m not Christian.
Erik, when I was growing up and going to the beach, the sun tan lotions with PABA first got popular. They burned like crazy but I used them. It was a bit too late. I’m extremely fair skinned. I use SPF 50+ now. They say there’s no difference after 25 but I certainly feel the difference.
I’m losing it — Erik! You know where that came from? I’m in the middle of wishing Erik at Mastermind Within a happy birthday and got your notification. Sorry about that!
Ha! I was wondering if you were talking to me or not! 馃檪
I not only wear SPF 50 but also got a great Outdoor Research hat from REI that blocks the sun on my face. Also being careful to walk mostly in the early morning and evenings.
I’ll course correct a little bit back to center after awhile — just a bit gun shy now.
On of your reply’s answered part of my question. I was going to ask what happens to the surplus (if any), but your reply indicating that your monthly contribution has varied and it has a cap. My assumption is that if the cap is hit for several months in a role, it likely means that expenses are greater than contributions and I assume that means an increase in the monthly contribution is likely going to happen. I assume some of those details on how often max contributions can be adjusted is stated in the fine print somewhere. Do you know if the other two plans you mentioned also have variable monthly contributions based on your research? Also, is there information available to prospective/existing members in regards to demographics (# of new enrollments and average age, average age of all member, etc.) as this information would be insightful to gauge the future success of the plan.
Last question, in the rare chance you don’t receive a payment from another member, I assume there is some process to validate it was never received. If you don’t receive a payment (maybe due to a member dropping out) I assume you are eventually made whole.
I don’t know the details of the other plans but all of them were easy to talk to and willingly answered questions on the phone.
I don’t know if there’s demographic information available — that’s another question for them. My wife found the total number of people enrolled for each plan (which I used on the first post). Not sure if that was online or via phone.
We took into consideration that they had been around for awhile as a sign of future success of the plan.
Note that to be in these programs you generally have to:
1. Have no pre-existing conditions (or at least they won’t cover them until after the phase-in period)
2. Agree to do several things that don’t harm your health (smoke, drink to excess, do drugs, engage in risky sexual behaviors, etc.). Some even have criteria on being within certain weight ranges.
In other words, people in these plans are generally healthy already and are taking steps to maintain their health. It’s not hard to see why premiums would be much lower.
As for payment, if it’s not sent to us, the company follows up to either get the money or reimburses it from someone else (I assume — we never had this problem). We had to log in our payments as we received them so the company knew who had paid (FYI, everyone paid.)
Liberty is a little more flexible with their “statement of faith”. You have to affirm certain things, but don’t necessarily have to be a Christian, although, I am. You don’t need a pastor to sign the form. That may be a positive for some. That may be a negative.
Pre-existing conditions may also be a problem with other companies. Liberty does phase them in. Liberty will also cover some medicines.
So everyone’s needs will be different. As ESI did, do your homework, call and talk to the different ones and see which one fits your needs.
This is such an alien concept that I don’t even know how to process it. Doesn’t really matter…as someone with multiple chronic health issues, and an atheist to boot, I would never be eligible for anything like this. :/
But have a couple questions, just out of curiosity:
1. The $250k max: I understand that your family is covered via an optional plan. Just wondering how can that plan be optional, and this still meet ACA requirements?? In other words, aren’t most the members (assuming most are not in the optional plan) basically uninsured for major/expensive issues…seems like that should violate the individual mandate. Do you understand why it does not?
2. Do you think it’s ethical for a SM member, who is basically insured, at least up to a point, be able to negotiate uninsured rates? (I may have misinterpreted, but I believe you said it’s typical to negotiate for an uninsured discount. Although that’s confusing too: it’s always been my understanding that insurance co’s pay the very lowest rates, and this makes it sound like the opposite. But I don’t work in healthcare, have always had the good fortune of being insured, and will admit to not knowing much about this.) Anyway just seems to me like SM are getting the advantages of being insured AND the advantages of being uninsured; and maybe this feels unethical to me partly because I’m excluded, not sure. Trying to be objective but am not sure how to tell if I’m succeeding.
Glad to hear via the notes that your BCC story ends well. Best wishes.
1. No, I do not understand why it’s not.
2. First of all, it’s not insurance by definition, it’s a health share. Second, we don’t negotiate for “uninsured rates” we say we are “cash pay” (which we are) and ask for a discount on that basis. Many businesses offer discounts when people pay by cash. They get their money faster, don’t have paperwork to do, etc. and as such have lower expenses for these sorts of customers and thus offer them discounts.
Well, after reading through the comments, it sounds like you are doing okay. Thank goodness! But there’s nothing like a significant health issue to really make you pause. I’m very anxious to read about your experience with the healthshare and the cancer treatment.
I love the idea of sending the monthly check to other members. It would make it feel more like a community you are directly supporting.
I’m looking forward to hearing the rest of the story. Glad to hear there was a positive outcome with the BCC. It’s really interesting to hear of these “non-traditional” health insurance options cropping up because of the need for them! We are covered by my husband’s employer, but they actually choose to self-insure. They cover all employees’ health care costs themselves, even though we have the Cigna umbrella for discounts, etc. I’m not exactly sure what the details are exactly, but I know the company is very much into preventative care and giving employees lots of time to exercise during their workdays to keep them healthy! It’s also a no-smoking facility. It’s a company of about 1000 employees.
Great, and relevant post! We’re seriously consider health sharing ministries when we FIRE next summer, most helpful to have your detailed thoughts.
Join the “broad hat club”! I had BCC on my forehead (the quarter-sized hole has healed nicely), low risk cancer and well under control. Now I know why so many of us old guys wear those goofy hats!
I was waiting for your choice but I’m not getting emails of your posts… (I signed up again today and I’ll let you know if it doesn’t come through. I signed up in the past too.) This is so interesting. We have health insurance for the next six years but then we’ll be shopping too. I’m glad we have awhile to follow all of your stories!
Is there any chance your new insurance would determine the BCC to be a pre-existing condition, since the condition may have been there for a while?
I’m hoping everything worked out well for you.
It wasn’t there until after I joined.
Thank you for sharing, and I’m glad everything worked out with your BCC.
I am sorry to hear about your present illness of basal cell carcinoma. In general, basal cell ca. has a good prognosis. I hope that your insurance choice will cover all your medical needs.
I would never consider a health share ministry insurance. Prior to Obamacare, there were financial coverage caps on the amount an insurance company would cover. The lifetime limit cap was usually 2 million for family coverage. Now there are no lifetime limit on essential medical care. With the new health reform bill, this will probably change.
Medical care can be astronomical. Medical expenses are the #1 reason for bankruptcy. I have paid for COBRA and it is money well spent. Care for an infant in the neonatal intensive care unit (NICU) can cost $3,500/day. Heart bypass surgery may cost $70,000-$200,000. The cost of the medication Harvoni which is used to treat Hepatitis C is $95,500. The cost of a kidney transplant $262, 000. My spouse who presently has cancer a 28 month survivor with one of the medications cost $15,000 a dose given twice a month.
I think all my goals, hopes, dreams and aspirations are based on having and maintaining good health. I can not imagine a health share insurance ministry being able to cover the cost of even 2 people with catastropic medical illnesses.
Thank you for sharing your insurance story and I hope the BCC is gone. Are there any updates about how this was covered?
I was wondering how the ministry plans deal with a member who requires an expensive therapy such as chemotherapy or something for hepatitis, which can often cost tens of thousands of dollars per year.
Also, are the negotiated discounts with providers as good as with commercial insurance?
If an expense is denied, what recourse would the member have?
Thanks.
There’s an entire post on how it was covered. See the link at the end of the post above. Summary: they covered it all.
As for those other questions, your best bet is to ask them. I am not a representative for them in any way, simply a member.
I can tell you that they don’t negotiate discounts for you — you do it yourself. You tell the doctor you are cash pay and in most cases he will give you a pretty decent discount. SM applied whatever savings you get to what you owe (which I believe is $300 per medical issue), then they pay the rest.
Best wishes for a speedy recovery!
I’m a physician and I would never do a health sharing ministry. The number of people I’ve seen have inpatient care for heart attacks etc and not see a penny from one of these is significant. And these are expensive stays- like 100-200k. Better to just negotiate a cash pay discount or a payment plan with the hospital directly, or get a cheap catastrophic plan.
You might want to stop referring to these ministries as “health insurance”- both the companies and the state insurance regulators are careful to note that these “plans” are not insurance, and that they are not regulated in any way, nor do they have to pay for anything by law.
Do they pay for referrals? I’ve always wondered.
“The number of people I鈥檝e seen have inpatient care for heart attacks etc and not see a penny from one of these is significant.”
How many and from what health shares? And how do you actually see these?
As many have discussed in the MMM forums, if health shares were commonly denying claims, word would get out and their businesses would be ruined. Yet the most reputable of these companies have been in business for decades.
So was Bernie Madoff.
At least two of the well-known health shares, that’s all I’m comfortable saying in a public forum as some companies have been vicious. Vicious. Several newspapers have done series on the health share problem, and several states have severely limited them due to ongoing issues.
If it works for you, go for it, my guess is most folks who run up high bills negotiate a discount/payment plan and then switch to the ACA. That’s part of the business model- as long as you aren’t they unlucky sod who ends up with a three million dollar bill before you can switch to the ACA, it probably does work for most people. But not having any coverage would work for many, too. I personally wouldn’t bet my assets on that and would get a catastrophic plan.
Do they pay for referrals? I’m still curious. If so, why? Insurance plans don’t pay for referrals.
It sounds like you have an ax to grind — commenting on a post that’s many years old…and it being your first comment here on ESI Money in four years or so. It’s interesting how you plucked this particular post out of the hundreds I’ve written to comment on.
And then lots of the traditional scare tactics and vague responses — Bernie Madoff, “several newspapers”, etc. If you live your life on what “several newspapers” say on any topic, it’s going to be a disaster IMO. Look at what “several newspapers” say about personal finance for example.
As for them paying referrals, you’ll have to check into those yourself…since you’re “curious”.
And maybe insurance companies don’t pay referrals — I’m not sure whether they do or not. But they sure pay commissions (to their agents). So quit acting as if insurance companies are somehow philanthropic organizations. They most certainly are not.