SIOUX FALLS, S.D. — Several hundred South Dakotans have turned to an alternative form of insurance to cover medical bills.
They are members of Medi-Share, a faith-based nonprofit whose clients pledge to a healthful lifestyle and pay into a pool to share expenses.
Officials in Florida said the network has 52,000 members, including 400 in South Dakota.
Medi-Share dates to 1993, a previous period of political turmoil over health reform, and it stands out again today in an era of change in the medical industry.
“I don’t know if it’s any different from insurance, but it’s far cheaper,” said Brian Gruis, 39, of Sioux Falls.
He and his wife, Brandi, 37, and their two children, Adrie, 10, and Evan, 7, joined early last year. They had been spending $400 a month for insurance. They now pay $250 a month, or $3,000 a year, with a $1,200 deductible.
Payments go to a fund at America’s Christian Credit Union in California. When a member goes to a doctor or hospital, the provider bills Medi-Share instead of an insurance company.
Founders said the program follows a 2,000-year-old model from the New Testament book of Acts, where early Christians shared the same beliefs and lifestyle and met each other’s needs. Members today sign a statement that they are Christians. The program will not cover expenses that relate to abusive habits. That’s one reason costs can stay low.
“You’re less likely to ding the system if you have a healthy lifestyle,” Gruis said.
He and his wife, Brandi, own a small real estate development business called Envision Companies.
“We always purchased insurance,” she said. “When we noticed the premiums jumped about 20 percent, we started looking around.”
She said she and her family have turned in a few doctor visits but have been fortunate not to have much need to do that. Their statements from the network include names of people their money has helped.
“They do encourage people to pray for one another,” she said.
Justin Prins, 29, another Sioux Falls member, pays $134 a month. He needed help on a Saturday afternoon when he accidentally shot a nail with an air hammer through the fleshy part of his left hand near the thumb. He went to the Avera McKennan emergency room, where the staff removed the nail, took X-rays and bandaged his hand.
“It was very similar to insurance with what I had to do on my end,” Prins said.
Congress endorsed insurance alternatives in the Affordable Care Act in 2010 by excusing members of such nonprofits from the individual mandate that will require other Americans to buy coverage. South Dakota’s Legislature added its blessing this year.
“There are a lot of things we need to try in health care. The old insurance model is not working that well. This needs a chance to succeed,” said Bernie Hunhoff of Yankton, the House minority leader and one of the bill’s supporters.
Hunhoff said Medi-Share sounds similar to the farmer’s mutual concept, where like-minded people share risks. “The rates are ridiculously low,” he said.
The state Division of Insurance is aware of Medi-Share but doesn’t regulate it and would be unable to offer consumer advice on benefits or drawbacks, spokeswoman Dawn Dovre said. Kirk Zimmer, CEO at DakotaCare, said Medi-Share sounds like basic insurance except that “insurance companies are prevented by different laws to make certain demands on customers’ health.”
Dan Talley, economics professor at Dakota State University, said such models can work if enough healthy people are in the pool.
“The question I would have is how they determine who is included for coverage,” Talley said. “Do they exclude individuals with pre-existing conditions? What insurance do they have if someone has an illness that requires an expensive treatment regime?”
Tony Meggs, president and CEO of Medi-Share, said members decide what is covered. A seven-member panel settles appeals.
“A checkup would be considered routine, and you would pay for that yourself,” Meggs said from Melbourne, Fla. “If a doctor finds polyps or worse, those things would be sharable. But the annual exam, the physical, those are things we consider routine, and you should budget for that.”
Pre-existing conditions, a central element in the federal health care law, are not covered.
“Some medical bills related to lifestyle we don’t share. ... Things like abortion, like plastic surgery, if a medical event is related to your abuse of alcohol — we don’t share in that,” he said. Members must agree they “will not abuse prescription drugs, will not use illegal drugs, will not abuse alcohol ... and must abstain from any sex outside traditional marriage.”
The average bill is $282 for a family and $170 for an individual, he said.
“It’s not for everybody, but it is a program that has worked for 19 years,” he said.
Information from: Argus Leader, http://www.argusleader.com