Two illegal Kentucky health insurance companies failed today to respond to a state Department of Insurance inquiry about their activities. Letters dated June 12, 2012 from the Public Protection Cabinet required an explanation or justification to be made to the Commonwealth of Kentucky by today.
At issue is the marketing of health sharing plans by Christian HealthCare Ministries and Samaritan Ministries in conflict with state law. Both entities fail to meet the extremely narrow "Religious Publications Exemption" in Kentucky's Insurance Code that would allow them to operate here. This Code also defines "insurance" so broadly as to make nearly anyone fall under its jurisdiction.
The Commonwealth has been battling a third health sharing group, Christian Care Medi-Share for more than a decade. Their case has come to an odd standstill.
Given that health insurance consumers' interests would be better served by more competing firms in an open and transparent marketplace, a solution would be to expand the "Religious Publications Exemption" to allow any church or religious organization to act as an unregulated health insurer.
A better solution would be to change the definition of "insurance" in state law from anyone engaged in shifting risk to anyone who voluntarily signs up with the Insurance Department to be regulated as an insurance company.
That way, we could have two insurance markets: one with direct government oversight and one without in order to maximize consumer choice and also to gauge the efficacy of alternative regulatory schemes.
The Public Protection Cabinet is expected to send out a second round of letters tomorrow, demanding a response and threatening fines and further legal action.