Understanding the Distinction: Health Insurance vs. Health Care Sharing Ministries (HCSMs)
The Michigan Department of Insurance and Financial Services (DIFS) is cautioning consumers about the distinctions between health insurance and Health Care Sharing Ministries (HCSMs). A recent consumer publication aims to shed light on these differences, emphasizing that HCSMs are not considered health insurance and lack essential health insurance benefits and protections.
What are Health Care Sharing Ministries (HCSMs)?
Faith-Based, Nonprofit Organizations
HCSMs are nonprofit, faith-based organizations that facilitate connections among members who require medical care and those willing to assist through voluntary contributions. Unlike traditional health insurance, HCSMs do not assume any financial risk and are not legally or contractually obligated to cover healthcare costs.
Legal Distinctions and Consumer Protections
Why HCSMs are Not Health Insurance
By law, HCSMs are not classified as health insurance due to their non-assumption of risk. This distinction means they are not required to provide many consumer protections mandated for traditional insurance policies. This includes coverage for pre-existing conditions and essential health benefits, which are standard requirements for most health insurance plans.
Director’s Advice: Research and Understand Before Joining
Crucial Considerations for Consumers
DIFS Director Anita Fox emphasizes the importance of thorough research before considering participation in an HCSM. While these ministries may meet the specific needs of some members, individuals should carefully review the terms and conditions of the organization. Director Fox advises potential members to understand if this voluntary financial arrangement aligns with their needs and family requirements.
Regulatory Status and Filing Complaints
Unregulated Status and Consumer Complaints
HCSMs operate outside the regulatory scope of state and federal insurance laws, meaning DIFS does not regulate them. To file a complaint against an HCSM, consumers can visit the Michigan Attorney General’s website or call (877) 765-8388. This reinforces the need for due diligence and cautious consideration when engaging with HCSMs.
Accessing Information and Seeking Clarity
Consumer Resources and Contact Information
For individuals seeking information about health insurance or verifying whether an entity is an HCSM or health insurer, DIFS provides resources at Michigan.gov/HealthInsurance. Additionally, consumers can contact DIFS at 877-999-6442, Monday through Friday from 8 a.m. to 5 p.m. This outreach aims to empower Michigan residents with the knowledge needed to make informed decisions regarding their healthcare coverage.
DIFS Mission: Ensuring Access, Security, and Consumer Protection
Commitment to Michigan Residents
The mission of the Michigan Department of Insurance and Financial Services is to ensure access to safe and secure insurance and financial services essential for the well-being and success of Michigan residents. Beyond regulatory responsibilities, the department provides consumer protection, outreach, and financial literacy and education services, aligning with its commitment to fostering economic growth and sustainability in the insurance and financial sectors.
