Friday, June 22, 2012

What's your health regulation tax?

A full analysis to compare health insurance policies usually involves looking at premiums, deductibles, co-insurance, maximum coverage amounts and exclusions.

One very important element in the cost of health insurance that doesn't usually come up is the cost of regulation. The point seems moot because we think of health coverages all being regulated the same way, so there is no reason to consider what those costs are.

But there is more to the story.

No matter how the U.S. Supreme Court rules on ObamaCare, the nearly certain shake-up in the health insurance market that results may send you hunting for a new way to pay for your medical needs. If you are a Christian, you might want to take a long look at Christian health sharing plans.

And that's where the cost of regulation comes into the equation in a big way.

Christian health sharing plans (Christian Care Medi-Share, Samaritan Ministries and Christian Healthcare Ministries to name three) don't fall completely under state regulation. Also, they are mostly exempt from regulation under the Affordable Care Act -- the part of the law most likely to survive even if the individual mandate is thrown out.

The relative lack of government regulation results in dramatically lower pricing for the sharing plans. That's not to say that they are automatically superior to government-approved plans, though. And this distinction is extremely important.

State regulators across the country, probably without exception, hate Christian health sharing organizations and have taken pains to keep us from flocking to them. I'd love to be proven wrong on this point, but I'm not holding my breath waiting for it to happen.

Every state law I have seen that mentions them takes pains to limit the ability of health sharing organizations to operate to their full potential. The standard approach requires them to state explicitly that there is no promise claims will be paid. That could seem pretty scary, but really only if you haven't done much research into health sharing plans or government-regulated plans.

"Regular" health insurance is just a one year contract. That should be horrifying for anyone on one as well as motivating for anyone who learns health sharing plans are not limited as to their terms.

The lack of legal support for health sharing plans is the only thing really holding them back. Kentucky's schizophrenic approach to them may be worse than any state's in the nation, but they all appear to be pretty bad.

Christian health sharing organizations are alternatives to health insurance that are barely, if at all, legally permissible in Kentucky. The problem has much more to do with bad law than with the organizations and their health plans.

A bill to expand the Religious Publications Exemption to the Kentucky Insurance Code would be a big help. Specifically, striking all of KRS 304.1-120(7) except for (c) would get the government off the backs of these good organizations and allow a strong self-regulating market to develop to benefit Christians all over Kentucky who would otherwise be victimized by the coming exploding costs in government-regulated health insurance.

What amounts to a "health regulation tax" really just benefits government health regulators. We can't afford their taxes anymore.