Christian Healthcare Ministries

[Pilot2013]

Anyone heard of this? A friend considering ER (before 65 and Medicare) is looking at this as a way to bridge to Medicare. Just wondered if anyone has tired it or has any information.

 

[MichaelB]

Anyone heard of this? A friend considering ER (before 65 and Medicare) is looking at this as a way to bridge to Medicare. Just wondered if anyone has tired it or has any information.

Try a forum search. There have been multiple discussions over the past year.

 

[Pilot2013]

OK, thanks.

 

[TJFogelberg]

I did extensive research on these earlier this year, after getting a few questions about them from tax clients. I was also looking at them for myself as premiums for traditional insurance are going up double digit every year. These health sharing ministries are very strange entities... I advise staying away from them at all cost.

 

[MichaelB]

I didn't mean to curtail discussion, just point our previous threads. IIRC this one had lots of opinions http://www.early-retirement.org/forums/f38/healthcare-ministries-and-selfpay-options-83112.html

 

[OldShooter]

I'm new here and never heard of this, but I went to guidestar.org and pulled their tax return just out of curiosity.

In 2015 tax return vs 2014 revenue ballooned from $85M to $145M. So, stuff happening there. Lots of money sloshing around anyway.

They have few assets vs the cash flow (less than 10%). Definitely not an insurance company.

Most of the money ($115M) goes back out the door to members, leaving admin expenses at 26% -- pretty high for a charitable organization or an insurance company. Nothing in the expense side really jumps out, though. I can't judge $4M salaries or $2.7M office expense because I don't know the business but >$50K/week for office looks kinda high.

It appears to be a family business. Dad is shown in the tax return as earning a fairly reasonable $220K. Text indicates that wife and kids work in the business to some level but their earnings are not broken out.

There is $3M of income from a taxable related business. Often in this kind of setup the nonprofit buys services from the for-profit. Usually the for-profit doesn't return much profit to the non-profit, however. This kind of opaque setup always raises my eyebrows as a possible place to stash family salaries, other spending that they don't want in the public tax return.

In short, it is a weird thing IMO. I would personally not want to get involved. But I am a cynical old fart; they may be a pure as driven snow.

 

[zinger1457]

Most of the money ($115M) goes back out the door to members, leaving admin expenses at 26% -- pretty high for a charitable organization or an insurance company. Nothing in the expense side really jumps out, though. I can't judge $4M salaries or $2.7M office expense because I don't know the business but >$50K/week for office looks kinda high.

I'm certainly no expert at reading financial statements but I read it a little different. Total expenses were $129M, of that $115M was paid back to members for medical care. The remaining expenses (salaries, etc.) of $13.5M is about 9% of revenue. I believe Christian Healthcare Ministries has over 100K members so it's more than a family run business. No idea how many employees it has.

 

[OldShooter]

I'm certainly no expert at reading financial statements but I read it a little different. Total expenses were $129M, of that $115M was paid back to members for medical care. The remaining expenses (salaries, etc.) of $13.5M is about 9% of revenue.

Zinger, you are correct. I was calculating a little too fast. A more accurate thing to say is that they paid out about 3/4 of income to members. The difference, went to assets. This may simply be a delay between receipt of funds and payouts or it may actually be profit. From the tax return it appears to be the latter. If it were a timing issue I think it would have gone into a reserve account rather than being reported as profits.

I believe Christian Healthcare Ministries has over 100K members so it's more than a family run business. No idea how many employees it has.

Well ... size really doesn't have a lot to do with whether something is a family business or not. Fidelity Investments is a family business, Billy Graham Evangelistic Association is a family business, and I think it could be argued that Ford Motors is also a family business. When I look at something like this, I look to see how the top guy is paid, whether his family also works in the business, and whether it appears that there is turnover in the top job, i.e. is the top guy the founder or a hired professional manager. Strictly speaking, no one owns a nonprofit so it cannot literally be a family business but when a nonprofit is controlled by a family or an individual there is opportunity for malfeasance. For example: Ex-nonprofit CEO Davis pleads guilty to 16 fraud, theft charges - StarTribune.com

 

[ncbill]

A more accurate thing to say is that they paid out about 3/4 of income to members. The difference, went to assets. This may simply be a delay between receipt of funds and payouts or it may actually be profit.

Some ministries (like the one above) collect payments from members, others have the monthly "share" payments sent directly from one member to another.

I would expect to see a delay in disbursing funds for the former, so I can't agree that and excess of current payments over current disbursements (even if required to be booked as assets) represents an actual profit.

Presumably they would prudently price the monthly payments to allow a reserve of funds for when needs temporarily outweigh the monthly share payments received from members.

 

[analytic_al]

As mentioned in the other thread, I looked seriously at adding this as a supplement to my current coverage, in case the exchanges blew up and I still need to bridge the gap to age 65 (I'm 55).

The kicker I unearthed is that the ministries plan also excludes all 'recreational' injuries. As an avid cyclist that's probably one of my highest risks... So read the fine print and exclusions carefully

 

[Blueskies123]

Maybe they have changed things since I looked at them but back a few years ago they did not cover preexisting conditions. You will have to see if that is still the case and what qualifies as a preexisting condition.

 

[brewer12345]

These are unregulated copies of real insurance companies with no capital, minimal reserves, and all the nasty features of pre ppaca individual insurance. Run.

 

[zinger1457]

The kicker I unearthed is that the ministries plan also excludes all 'recreational' injuries. As an avid cyclist that's probably one of my highest risks... So read the fine print and exclusions carefully

Never heard of that one. Could you provide a link where it states that? I looked at Liberty Healthshare and this was all I could find with regards to recreational/athletic activities being non-eligible for coverage.

Care and treatment of an injury or illness that results from engaging in a hazardous activity is not eligible for sharing. An activity is hazardous if it is an activity which is characterized by a constant or recurring threat of danger or risk of bodily harm. Examples of hazardous hobbies include, but are not limited to, rock/cliff climbing, spelunking, skydiving, or bungee jumping.
Charges for treatment of injuries or illness while racing or competing as a professional are not eligible for sharing. Professional racing means that such activity is one’s primary vocation and means of financial support. Professional racing and competitive events include, but are not limited to, automobile, motorcycle, watercraft, ski or rodeo races or competitions.