Most people, most of the time won’t be too sick. Of the people who do get sick, most people won’t be too sick. But there are a few people who will get very sick and need very expensive treatment.
Health insurance in the post-PPACA world covers these people by removing life time caps. But in a genuflection to the sensitivies of the religious, PPACA exempted several clusters of quasi-insurance from regulation and allowed for not quite insurance to count as insurance for mandate purposes. The New York Times reports on a health sharing ministry in Texas:
members promise to abide by a lifestyle that includes frequent church attendance, little drug or alcohol use, and no premarital or gay sex. Monthly fees at Samaritan range from $180 for an individual to about $400 for a family, with members paying the first $300 of their medical bills out of pocket.
Samaritan members send medical bills to the ministry, which in turn directs other members to mail their monthly payments to the person in need. If there is not enough money available in a given month, members receive a percentage of their request and hope to be reimbursed later when there is more money to go around….
In addition, members are essentially putting their faith, and medical bills, in the hands of the network without assurances that they will be paid. Most members also face a lifetime cap of $250,000 per medical condition — an amount that can be easily spent if a person is seriously injured or faces a long-term illness….
Health policy experts say the ministries rely on the fact that their members are mostly young and healthy, and on some coverage limits. The ministries do not pay for some of the most expensive care, like treatments for pre-existing conditions, that federal law requires of traditional insurers. And if a ministry member contracts a sexually transmitted disease, he or she has to foot the bill….
In insurance terms, the ministry in question is offering a decent size but cherry picked risk pool with significant pre-exisiting condition limits, medium to high deductibles for routine care and fairly low lifetime caps for fairly low premiums. If it was not religious, these plans would have died with PPACA as they would slowly lose their grandfather status.
Yet, for most people, most of the time, this is not that bad of a deal as most people, most of the time are fairly healthy, especially if you can limit your covered population to mostly younger families. But God help someone if they get shot by a formerly responsible gun owner who needed a twenty round magazine for his semi-automatic rifle to get a single deer, get hit by a bus, or have a kid with cystic fibrosis or have a nasty and complicated cancer as this insurance won’t protect them.
Prayer is not a good public policy for tail risks.
