Obamacare vs. Samaritan Health-Care Ministry: A Case Study

The new law erodes the power of individuals to make health care cheaper & better.

When Jason Morris' son Cole was two years old, he broke his thighbone and spent several weeks in a full-body cast. The medical bills came to about $13,000, but Morris, his wife, and six children don't have health insurance. Instead they belong to Samaritan Ministries, an organization of devout Christians who chip in to cover each other's medical bills. Following the usual process at Samaritan, members from all over the country mailed the Morris family small checks that added up to enough money to cover all the bills. "We had the emotional side of it," says Morris, "but the financial side of it was completely taken care of."

Samaritan has about 86,000 members spread among all 50 states, which makes it the largest of three "health care sharing ministries" in the U.S. Households of three or more are required to send $370 each month to another family to help cover the bills from a medical crisis. Headquartered in Peoria, Illinois, where 94 staffers coordinate the bill-sharing process, the organization is based on the belief that patients are ultimately responsible for their own medical bills.  But in times of crisis, the community bands together to pitch in and help bear the burden. "Faith in God applied to health care," is one of the organization's mottos.

Samaritan may soon become a casualty of new incentives created by Obamacare, which does virtually nothing to reduce third-party payments in delivering health care. When their bills are mostly covered by insurance companies or the government—which may also be heavily subsidizing their premiums as well—patients aren't discerning shoppers.

Under Obamacare, most Samaritan members will be able to purchase health insurance policies that offer richer benefits for lower prices, thanks to significant taxpayer subsidies. Take, for example, the median Samaritan household, which has three members and an annual income of about $40,000. Under Obamacare, that family will pay around $2,500 dollars a year to buy a middle-of-the-road "silver" plan on the new health care exchanges. Why so cheap? Because taxpayers will pick up two-thirds of the total cost of the insurance premium. Compare that $2,500 price tag to the cost of an annual membership in Samaritan, which comes to $4,440, and that average family will save nearly $2,000 per year for quitting Samaritan and signing up for a subsidized insurance plan that's more comprehensive. About 90 percent of Samaritan members have incomes low enough that they'll qualify for at least some federal subsidies on the exchanges. Depending on a variety of factors, households making up to 400 percent of the poverty line may qualify for premium subsidies.

Samaritan's executive vice president, James Lansberry, is optimistic that most Samaritan members will stick with the ministry because of its theological mission. He’s also convinced that the biggest threat from Obamacare is already out of the way. Lansberry led a successful fight to get language inserted into the law that specifically exempts health care sharing ministries from the individual mandate, which would have required that members buy a traditional health insurance policy or pay significant penalties. "We look at our exemption from the individual mandate as a miracle from God," he says. Regarding the exchanges, "members will stick with us even if it doesn't make financial sense, because by belonging they're expressing their religious beliefs.”

Lansberry points out that many members care deeply about what Samaritan doesn't cover. "Do you support abortion, sexual immorality, drug & alcohol abuse with your health insurance?" reads the cover of one Samaritan pamphlet. Joining with "unbelievers" to cover the "health consequences of sinful living," it warns, "is not a way of showing the love of Jesus Christ."

But even if the vast majority of Samaritan members stick with the organization, it can be damaged by even marginal declines in its membership rolls. Samaritan merely administers the bill sharing and it doesn't directly collect money or set aside extra funds on good months. So in order to function at its best, each month membership dues have to equal or exceed the total cost of all qualifying medical bills. Otherwise Samaritan has to pro-rate its payout, which leaves patients to cover a larger portion of their own bills out of pocket. The larger the pool of members, the more predictable their monthly medical needs will be in the aggregate, making it possible for Samaritan to calibrate accurately its membership dues with monthly needs. If the membership pool shrinks, there could be more pro-rating, which will create more dissatisfaction among members, making them more likely to defect—a process that could feed on itself.

It would hardly be the first time that a new government entitlement destroyed a voluntary organization built around commonly held beliefs. Samaritan is one of the last “mutual aid societies,” organizations that up to the early twentieth century played an integral role in American life. In 1910, an estimated one-third of American men belonged to a fraternal organization, which provided temporary help to those unlucky enough to fall ill or lose a job. The mutual aid societies began disappearing with the rise of government programs such as welfare, Medicaid, food stamps, and unemployment insurance. 

The demise of Samaritan and other outfits like it would be cause for concern. Subsidized health insurance plans through the exchanges provide richer benefits than a membership in Samaritan, but they do away with incentives that over time are the key to driving down prices and driving up quality. With the "silver plan" on the health care exchanges, when patients get a routine physical they're responsible for no more than $45 out of pocket and insurance pays the rest. Samaritan members pay the entire cost of a routine visit out of pocket and they can only submit their bills for reimbursement that exceed $300.

"Absolutely we hold out longer than somebody who has an insurance plan with a $5 co-pay because we know it's going to cost us," says Jason Morris, who works as a pastor at New Life Christian Church in East Peoria, Illinois, but previously spent 10 years as an employee at Samaritan. "I don't really see holding out as a problem. I hope it's not too crass to compare it to a sale at Menards—you don't buy the item when it's up front for $140, you buy it when it's on sale for $100."

Through the health plans available on the exchanges, patients can get a whole range of routine preventive services, including mammograms, colonoscopies, vaccines, and blood tests, and pay nothing out of pocket. When Samaritan members get these same procedures, they have to pay the entire bill themselves unless they're directly related to an existing illness or condition. 

“Now if you're a doctor and you know the patient that you have to look in the eye will never have to pay a single penny of the cost of these procedures," says Samaritan's Lansberry, "you're going to try and raise your price because there's no reason not to." Samaritan members actually care about what things cost because every dollar comes out of their own pocket or the pockets of their fellow members. "If my best friend gives me his credit card and says go out to dinner on me," says Lansberry, "I'm probably not going to have surf and turf because I want to look him in the eye later."

Take Roger Stuber, a Samaritan member and residential contractor in Tremont, Illinois. He experienced a series of seizures last year that revealed a leaky vein in his brain that required surgery. Even in the midst of this terrifying episode, Stuber went to lengths to insure that he wasn't overcharged. The hospital initially was going to bill him more than $63,000 for his surgery, which he negotiated down to just over $36,000. When he was billed $5,000 for a follow-up MRI, at first the hospital refused to offer him much of a discount. So he marched down to the finance office and demanded to see the manager in charge. She eventually agreed to accept just under $1,500 dollars if Stuber paid cash on the spot.

If he hadn’t gone to all of this effort, the bills would have been covered almost entirely by other members. "But I'm part of a body there at Samaritan," says Stuber, "and if I can keep costs down, I'm helping the group."

It's the sort of effort that no patient covered by one of the Obamacare's health plans would ever bother with. Whatever the fate of Samaritan Ministries, the growing role of government in the sector is eroding the power of individuals to make health care cheaper and better.

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  • Sean Parnell||

    The article makes some excellent points, particularly about voluntary organizations receding as government increases its role. But I don't think Samaritan or the other two ministries have too much to worry about. Some of the challenges associated with being a member of a ministry, such as getting billed so-called 'chargemaster' rates, are being addressed by partnering with bill negotiation services. I actually wrote yesterday about The Health Co-Op, a program connected to Samaritan that provides among other things discounted labs, bill negotiation and review, telemedicine services, and discounts on doctor, hospital, and prescription drugs (see here: http://theselfpaypatient.com/2.....-ministry/). The other two ministries offer some similar benefits, although I don't think they're quite as robust as The Health Co-Op.

    This article also overlooks that the deductible for a Silver plan is generally in the $2,000 - $3,000 range, while Samaritan's and the other two ministries start in the $500 range (technically not a deductible, but similar in concept). So while there's little doubt that some people will find exchange-based plans more attractive, that's not always or even usually going to be the case. One of the ministries, Christian Healthcare Ministries, offers a membership level that has a $5,000 'personal responsibility' amount (think 'deductible') for $45 a month.

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  • Jim Epstein||

    The Health Co-Op seems ike a great program, and most members may want to stick with a health care sharing ministry whether it makes financial sense or not. But as I argue in the piece, even if the exchanges draw away a fraction of Samaritan's membership it could create a cycle that feeds on itself. The system of attempting to line up shares and needs on a monthly basis is precarious.

  • Akalhar||

    Great article. Thanks for researching it and writing it. My wife and I have been doing our own research as well. We're currently not insured, and will be signing up for Samaritan Ministries.

    I know several other families in this area who plan on doing the same, rather than enroll in Obamacare. I'm hoping those families that are gained offset those which are lost.

  • fredflinstone||

    but does being a paying member exempt you from obamacare? I would surely be checking that to be sure.

  • JustinP||

    Yes, it does. As stated in the article, "[Samaritan's executive vice president] Lansberry led a successful fight to get language inserted into the law that specifically exempts health care sharing ministries from the individual mandate".

  • JustinP||

    Again, Jim, while I think your article was good overall, it does seem that the reverse of what you predicted is happening: I just received the latest newsletter and it says that the number of new memberships increased by a record amount last month. That makes sense when you consider the headlines about how much more people are having to pay for insurance as a result of Obamacare.

  • Aaron Everitt||

    I am a member of this organization and we use this service for my family of 6. As a libertarian minded believer, I think it is incumbent upon people like myself to make counter governmental choices like what Samaritan provides. We would choose to stay in this program even if the exchange was more appealing financially because I believe that it is my responsibility to shoulder my brothers needs through care and not force. (donations vs. taxes) We love the program - It worked incredibly for our family in times of need and it helps put a real face to health care. The nameless, faceless government we have built has caused everything to be evaluated financially instead of in the context of the whole. Crazy as it may seem my family makes our decisions on the "cost" of the context. We think that it is better to share our fellow believers burdens than make decisions based strictly on our pocket book. I hope more of these kind of organizations thrive in a more underground economy that results from the bizarre insertion of government control.

  • fredflinstone||

    first understand this, the govt is not a manufacturer, or producer of any working successful system. They are the worlds biggest consumer and waster.they spent millions on technology that is at least ten years old and without testing it to see if it worked which btw this goes along with this huge monstrosity of a healthcare bill that Pelosi said we would have to pass it to see what was in it first, well they then decided to pay out millions in order to launch their flagship that was already leaking profusely on launch then it hit an even bigger soon after launch iceberg, but this time around the whole crew and captain is jumping ship and leaving the passengers to fend for themselves. This is a severely broken system that eventually will have to be trashed.

  • Brian||

    Lansberry led a successful fight to get language inserted into the law that specifically exempts health care sharing ministries from the individual mandate, which would have required that members buy a traditional health insurance policy or pay significant penalties.

    Why can't anyone get an exception?

    Me: I don't want to buy health insurance.
    Government: Well, we're going to make you pay a tax penalty.
    Me: But God told me not to.
    Government: Oh, well, then, nevermind.

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  • fredflinstone||

    this good Samaritan program is good but could with a minimum amount of tweaking could be better. think about this: if they tweaked their membership requirements to people who hand a good solid major medical policy, and not one from obamacare, avoid obamacare like the plague it is,and after their insurance covered what it would for whatever then divide that expense between members and they are still being a blessing to people,etc. etc. why wouldn't that work according to the article the article is trying to herd people into obamacare and that will not help but hurt in many way's making them much poorer than what they already are. And not give honor to God but man.

  • JustinP||

    The speculation that Obamacare would hurt organizations like Samaritan doesn't seem to be holding up. We signed up with Samaritan over a year ago and the membership numbers (which are published each month in the newsletter) have continued to increase. In fact, I just got today's newsletter which says that a record number of new members joined last month.

    Second, this article is mostly accurate but is a bit misleading when it states that, "Samaritan members pay the entire cost of a routine visit out of pocket and they can only submit their bills for reimbursement that exceed $300." Yes, there's a $300 threshold but it's for a given illness / condition and not for a specific bill as implied here. Also, members are only charged this amount for up to 3 illnesses / conditions per year which (to compare it to insurance) is the equivalent of a $900 deductible for a family. Good luck finding the equivalent of that for $370 per month with an insurance plan.

    Lastly, I'm VERY curious as to where the quoted statistic came from that "the median Samaritan household . . . has three members and an annual income of about $40,000" since I don't remember ever being asked for or providing information on our household income to Samaritan. That claim seems to be a central tenet of this article, but frankly I'm skeptical of the reliability of it because I don't see how that information could be known. The average number of members per household, yes, but not the household income.

  • bocksmj||

    Justin - Why did you choose Samaritan over CHM? Also, i would assume that alot of the members of both of these healthcare ministries would be small business owners... just a thought to your income rebuttal (i agree w/)

  • JustinP||

    I picked Samaritan because our money is sent directly to another member instead of to the organization itself. I know that in the past one of the other two organizations ran into a problem with someone misusing members' money. I found that out when I was researching all three of them because quite frankly my family has always had insurance and I wasn't comfortable giving it up, so I did a lot of research on all three organizations. If I recall correctly, though, the trouble I just mentioned was years ago and I seem to recall that steps were taken to make sure it couldn't happen again.

    The bottom line is that my opinion after doing the research was that any of the big three would be ok, but I guess I felt just a little better about Samaritan. So if you're leaning towards CHM (or already a member) I wouldn't discourage you from going with them, because I would have been comfortable with any them; Samaritan just seemed like a marginally better choice for us.

  • bocksmj||

    Also - With Samaritan members sending checks directly to other members vs CHM members sending checks to 1 office who then directs the monies throughout the country to those who applied for needs, does it worry you at all that if you have a need, a member might not send it to you? Or prorated? I didn't read anything about that on CHM's site but i guess the same would happen there, although i think they have a reserve in place...

  • JustinP||

    About not receiving the money, we haven't had that happen but I seem to remember reading that if it did happen Samaritan would have someone else send us the money and the non-payer would be booted out, though presumably after being reminded / encouraged to pay up.

    The pro-rating thing actually happened recently: they pro-rated at 80% for two months in a row, and the bylaws (or whatever) say that if it happens three months in a row they'll vote on increasing the monthly share. That didn't happen in this case, though, because they had enough money in the third month to make up the difference for the previous two months. In other words, the folks who had their reimbursements prorated wound up getting the full amount -- just delayed a bit. Even if they hadn't that's no worse in my mind than a typical insurance plan that holds you responsible for (at least) 20% of your bills after the deductible (a.k.a. "coinsurance").

  • JustinP||

    Actually, I should have said that if the prorating occurs three months in a row then "we'll" vote on it, because the vote is a vote of all the members / households, not the organization's board. That's another thing I liked about Samaritan that may (or may not; I honestly don't remember) be just as true of the other two: the major decisions are made by letting all the members vote.

  • Independent Texan||

    Mr. Epstein is correct in the aims of Obamacare: to eliminate creative market-based solutions and force everyone into the government program to increase the subsidy pool for Obama voters.

    However, the political backlash in the Christian community is causing Samaritan to grow at the fastest rates ever seen. Precisely because these three ministries are grandfathered, the government has shut the door on creative new solutions, but that gives Samaritan and the others built-in scarcity value. I predict faster growth ahead, not slower.

    At 30,000 families now, there is PLENTY of room for Samaritan to triple in the next few years without making a dent in the Obamacare wealth transfer. That's why the grandfathering was permitted: it was sop to the right, agreed to by the left because the size of the drain from the system is immaterial. Only if these health care sharing ministries grow to be a meaningful percentage of the population, and threaten to materially limit the ongoing rip-off, will the statists try to retroactively take away the Obamacare exemption from them.

    When that happens ..... my goodness. We are well past the tipping point where personal and religious liberties are no longer considered essential by two branches of government. How long will it be before the Bill of Rights is no longer protected by the Supreme Court? When we get there, I think the fate of Samaritan Ministries will be among the smallest of our problems.

  • obloodyhell@yahoo.com||

    }}} Under Obamacare, most Samaritan members will be able to purchase health insurance policies that offer richer benefits for lower prices, thanks to significant taxpayer subsidies.

    So I've been told. This remains to be seen, however, since no one has any actual coverage, no one can tell WTF is going on, and the full effects of this insane excuse for a Law have not even begun to be felt.

    With far fewer young adults signing up, premiums have to rise, or subsidies have to rise, which only adds to the stress on the economy which is produced by spending trillions more than we're making each year.

    Doctors, on the other hand, are showing signs of retiring much earlier than they would have, leading to less care and less availability of coverage all around.

    I predict the full and complete repeal of ObamaDon'tCare within 5 years. The real question is if the government will try and replace it with something that's just as big of a clusterf*** as the ACA...

    Chances are, that's a sure thing.

    I predicted in 2008 that, if he were elected, Obama would make everyone appreciate the quivering mound of incompetence that was the Carter Administration. He's MORE than amply done that already, and he's got a couple more years to add to that egregious legacy.

    Obama is going to be almost single-handedly responsible for raising an entire generation of Americans to being staunch libertarians such as has not been seen in this country in 120 or more years. We live in interesting times.

  • Suzanne B||

    Good article, especially the concerns regarding dwindling numbers. I was worried about that before signing up for Christian Healthcare Ministries, but they were apparently getting a new online application every 2.5 minutes in the months before the deadline. I believe one of the drivers for those who qualify for subsidies is not getting roped into the so called "death panels", as well as fears about data privacy. The good thing about CHM is that they accept pre-existing conditions at a lower share level for the first three years and then all of your needs are shared. They also have unlimited catastrophic care with the Brother's Keeper Plan, the lowest overhead of the three big ones and do not reject anyone. I wrote a fairly comprehensive review here: www.christianhealthcareministriesreview.com if you're interested.

  • Rogerboz||

    Very good article. I think one of the things you missed was that the elimination of high deductible insurance policies is going to drive people to health sharing organizations. The last time I was between jobs I bought a catastrophic policy and figured I could pay for any "normal" health expenses. Under Obamacare, these policies do not fulfill the legal requirements. So in searching for an alternative I found the health sharing organizations.... and I just love the concept!

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