DECISION GUIDE: Choosing a Healthcare Sharing Program
Is Healthcare Sharing right for me?
In Part 1 of our blog series "Choosing a Healthcare Sharing Program. An Insider’s Perspective" we provided you with insight into the primary reasons why Healthcare Sharing is less expensive than insurance. These reasons may make Healthcare Sharing more of an option or less of an option for your medical needs. Provided below are questions that you may want to consider in deciding if Healthcare Sharing or a specific Healthcare Sharing Program is right for you:
- Can you afford the cost of an ACA health insurance plan?
- Are you primarily attracted to Healthcare Sharing because of its lower cost?
- Do you understand the difference between health insurance and Healthcare Sharing?
- Can you trust an approach to healthcare that has no guarantee or promise-to-pay, but relies on the consistent participation and contributions of others?
- Can you trust a Healthcare Sharing Program that has a history of sharing and paying the medical bills of its members?
- Do you understand that a Healthcare Sharing Program is going to share in medical bills differently that an ACA health insurance plan?
- Do you understand that HCSOs do not share in ALL expenses related to pre-existing conditions?
- Have you read the Guidelines of the HCS Program that you might be considering?
- Have you carefully considered the “What’s Eligible for Sharing” and “What’s Not Eligible for Sharing” sections of the Guidelines of a HCS Program that you might be considering?
- Are you confident that the HCS Program that you are considering is adequate to meet your medical needs?
- Will the HCS Program that you might be considering require you to negotiate and/or pay medical providers yourself before submitting bills for reimbursement?
- To what extent are you comfortable with negotiating your own medical bills, paying medical providers yourself, submitting your paid bills to your HCSO and waiting for reimbursement?
- Do you understand the difference, in terms of cost and convenience, between cost containment strategies deployed by HCSOs?
- Network Model (most convenient, least savings) - members inform their Medical Providers to send their medical bills to the HCSO directly. Bills are re-priced per the pre-negotiated National Network rate. Payment is then sent directly to the Provider.
- Hybrid RBP Model (mostly convenient, greatest savings) – members inform their Medical Providers to send their medical bills to the HCSO directly. The Hybrid RBP Service reprices the bill based on Regional Network rates, negotiated case rates or ~150% of Medicare, whichever is lower. Payment is then sent directly to the Provider.
- Cash Pay Model (least convenient, good savings) – members negotiate prices and pay the Medical Provider themselves. They then submit their paid bills and wait for reimbursement.
What does a “credible” HCSO look like?
In Part 2 of our blog series “Choosing a Healthcare Sharing Program. An Insider’s Perspective” we provided you with insight into what a “credible” HCSO (and its Programs) looks like. Provided below are specific questions to consider when assessing the credibility of a HCSO.
- Has the HCSO clearly separated the operations of its programs from the practice of insurance?
- Has the Health Care Sharing Organization been diligent in making certain that you understand that Healthcare Sharing in NOT insurance?
- Do all the marketing materials have Disclosures that clearly state that Healthcare Sharing is NOT INSURANCE and that it provides “no guarantee,” “no promise to pay,” and “no transfer of risk”?
- To operate its programs, does the HCSO “pool” member funds by taking receipt of their contributions into a centralized account like an Escrow Account or Trust? Or does the HCS Program operate through separate and individually owned Member Share Accounts that are controlled by each member?
- Does the HCSO’s program involve the members into the sharing process by moving funds from member-to-member (i.e., P2P Sharing).
- Are you comfortable with how the HCSO is being governed? Have you asked for, received, and reviewed a copy of the HCSOs most recent Form 990?
- Did you give special attention to Part I (Lines 2 & 3) and Part VI (Line 2) to assess the Independence of the Board? Did this cause you any alarm?
- Did the HCSO answer “Yes” to any questions in Part IV: Lines 25 – 28? If yes, did the HCSO include a Schedule L? If so, what have you learned about related party transactions? Did this cause you alarm?
- If the HCSO does NOT have a recently filed FORM 990, then have you requested a letter from the Board that details any commercial or relational ties between the HCSO’s Officers, Directors, Vendors and/or Family Members.
- Does the HCSO disclose its annual audited financial statements for your review? Is the “Use of Funds” clear to you in terms of what percentages of member shares/contributions are spent on sharing medical bills, program expenses and administrative expenses?
- Does the HCSO provide a breakdown of the Use of Funds in your Monthly Statement (i.e., Monthly Share Notice)?
- Does the HCSO provide you with a real-time dashboard that details the aggregate YTD Use of Funds for all members?
- Are you comfortable with how the HCSO manages its programs?
- Do you understand what aspects of the HCSO’s operations have been outsourced to a Third-Party Vendor?
- Has the HCSO outsourced a large part of its operations to a single Third-Party Vendor that was established within a year of the HCSO being established?
- Has the HCSO outsourced a large part of its operations to multiple Third-Party Vendors that were established within a year of the HCSO being established?
- Do any of the HCSO’s Officers, Directors and/or their family members hold ownership in any of the Third-Party Vendors referenced above?
- Are you confident that the operations of the HCSO are being managed to the benefit of the members and NOT to the private benefit of an Officer(s), Director(s) and/or their family member(s).
How can I know if my HCSO will be reliable?
In “Part 3” of our blog series we provided you insight into how the most “reliable” HCSOs (and their Programs) are operated. How an HCSO is operated (its protocols and practices) is critically important because you can’t always rely on the “individuals” that govern and manage a HCSO, as those individuals will change over time. Thus, you should prioritize those HCSOs that engineer consumer protections and fiscal soundness into their Programs. Provided below are specific questions to consider when assessing the reliability of a HCSO in terms how it operates.
Does the HCSO operate and facilitate its sharing programs through Member-Owned-Accounts? Or, does the HCSO operate its Programs through a “centralized” account like an escrow account?
NOTE: HCS Programs that are operated through a centralized and/or escrow account are more vulnerable to fraud and financial malfeasance.
- Does the HCSO protect its Member(s) by employing Member-Owned-Accounts, held by a Third-Party Financial Institution (not the HCSO) with fiduciary responsibility over Member Funds?
- Is the Third-Party Financial Institution free of any “ conflicts ” with the HCSO, or any other HCSO.
- Does the Third-Party Financial Institution use an Agency to execute account transactions on behalf of the Member and the HCSO?
- Is the Financial Institution’s Agent free of any “conflicts” with the HCSO, or any other HCSO.
- Does the Financial Institution (or its Agent) ensure that Member’s stay in control of sharing funds by not allowing the sharing funds to be commingled with the HCSO’s needed for operations.
- Does the Member-Owned-Account provide a real-time detailed display of every credit/debit transaction related to the Member’s account.
- Does the HCSO employ P2P Sharing through the Member-Owned-Accounts by ensuring that shared funds move directly from member account-to-member account?
- Does the HCSO “publish” the amount of an eligible medical bill(s) that a Contributor has been matched and allocated to share.
- Does the HCSO protect its Members by notifying (publishing) each Contributor of the amount that has been allocated to for them to share individually … and is the Contributor notified before their allocated amount is debited from their account and transferred to the Bill Owner’s account.
- Does the HCSO protect its Members by deploying Virtual Bill Accounts to ensure that the “shared funds” from the Contributors are restricted and cannot be withdrawn by the Bill Owner.
- Does the HCSO protect its Members by deploying Virtual Bill Accounts to ensure that “shared funds” are sent directly to the Provider through the use of a Provider Account(s).
- Does the HCSO build and distribute medical reserves (i.e., Distributed Reserving) across the Member-Owned-Accounts.
- Has the HCSO built the necessary level of distributed medical reserves to process, share and pay medical bills in 30 Days or less.
- Does the HCSO deploy a Dynamic Reserving process through the Monthly Share Notice to ensure that Distributed Reserves are replenished and sustained to their appropriate levels?
DISCLOSURE: Sharable, LLC is a technology and services company that serves the Healthcare Sharing Industry. The Sharable team has more than 100 years’ experience in building and managing high-performing Healthcare Sharing Programs. Our mission is to advance the adoption of Healthcare Sharing as an affordable option to health insurance. Sharable does not endorse specific Healthcare Sharing Organizations or their Programs.