Episode 38 - Healthcare Sharing vs. Insurance: Which Saves You More?

In this episode of Beyond Budgets®, Deb shares a personal story that hits home—navigating the unexpected cost of her son's surgery, even with insurance. That real-life experience opens the door to a bigger conversation: what are your options when traditional health insurance doesn't fit?

Whether you're between jobs, self-employed, or considering early retirement, Deb breaks down:

  • What healthcare sharing plans really are—and what they're not

  • The trade-offs of COBRA vs. marketplace insurance

  • Why premiums have jumped 47% over the last decade

  • What to know about pre-existing conditions, preventive care, and reimbursement delays

  • Her own experience using MediShare during a family sabbatical

Plus, Deb dives into smart open enrollment decisions for those with traditional employer plans—HSA vs. FSA, high-deductible plans, and avoiding costly dental surprises (hello, braces).

This is a must-listen if you’re:

  • Self-employed and unsure about your healthcare options

  • In between jobs and overwhelmed by COBRA costs

  • Comparing insurance during open enrollment

Episode Highlights

(04:56) Understanding Healthcare Cost-Sharing Plans

(13:39) Healthcare Sharing Plans vs. Traditional Insurance

(19:48) Benefits of High Deductible Health Plans

(22:25) Financial Planning for Orthodontic Costs

Short on time? View the video preview on YouTube

Full transcript

Deb Meyer (00:02.446)

So my son recently had surgery and outside of the emotional concern that comes with any loved one having a surgery, you also have medical bills. So here I am a week before the surgery. I'm doing their online check-in, uh, cause our hospital allows that. And I see that there's over 4,500 expected balance due, uh, after insurance. I had to like.

take another look at it and say, is this for real? But honestly, did catch me off guard initially, but I'm grateful that I have insurance and that that was a medical bill we had planned for and anticipated with going through with the surgery. not everyone has insurance. And if you're in between jobs or you work for an employer who doesn't offer health insurance,

Oftentimes, know, those premiums can be very expensive if you look at alternative plans. And just to put some statistics around it, according to Kaiser Family Foundation's 2021 employer health benefit survey, the average premium rose 47 % in the last decade for family health care coverage. Now, one of the things that I want to highlight today are health care sharing plans. They can be a great alternative.

But there is a big caveat. They are not insurance. In other words, a healthcare sharing plan, if you join it, they aren't legally required to pay the medical expenses. Most of them do, but they're not legally required to do so. But before we get into the nitty gritty on healthcare sharing plans, I do wanna talk about those of you who are in between jobs and just considering the timing of where you are in the year.

I'm recording this in March, it'll get released in early April. And what I found is that, you know, for people that are already incurring a lot of medical costs early in the year, it can make sense if you were on a previous employer's plan to just continue on with that plan and do what's called COBRA. COBRA allows you to stay on an employer healthcare plan up to 18 months.

Deb Meyer (02:26.478)

But the key with that is that employers coverage, know, typically when you're an employee, they actually pay for about 72 % of the cost of your coverage, your monthly premiums on average. So now that you're no longer with the company and the employer is not expected to pay those amounts anymore, your Cobra premium can get very expensive very quickly. So it really is going to depend on what kind of healthcare.

plan you have. If you're in a high deductible plan and you've already incurred a lot of costs, you might already have met your deductible for the year, you might as well just stay on the plan and that way your out-of-pocket costs going forward are more minimal. But if you're early in the year and you haven't incurred costs and you think there's, you know, good hope that you'll be on a different employer's plan later in the year, it might make sense to, you know,

go off of Cobra for a little while, explore maybe one of these healthcare sharing plans. There's all kinds of different options that you can do beyond Cobra. But most people as a default will go to Cobra because it's that extra coverage for up to 18 months after you sever employment. Now, the government healthcare plans that were pretty popular back when Obama was president, those typically

can be expensive if you're getting the top tier coverage or the coverage is just lackluster. they're going to cover some medical expenses, but not all the medical expenses. And if you think about just the, Obamacare mandate several years ago that said like, Hey, everyone in the country and the U S needs to have health insurance that has now been repealed. the tax cuts and job back of 2017 actually repealed that.

permanently, which means you aren't technically required to have health insurance. Now, I'm not advising people to go without health insurance, but it's no longer a requirement. And that's why some of these health care sharing plans, which aren't traditional health insurance, they're a different vehicle to get some coverage potentially, they could be a good compromise, especially if you're

Deb Meyer (04:47.598)

in between jobs or self-employed or even if you have like an early retirement and you're not yet eligible for Medicare, these are all times that you could consider a healthcare sharing plan. So just to give some of the terminology, a healthcare sharing plan works very similarly to traditional health insurance. The monthly share is what they call it and that's equivalent to a premium in a traditional insurance plan.

So you as the individual or if you have family coverage, you're responsible for paying certain medical expenses yourself, just like you would a deductible. So let's just say you used to be on an insurance plan with a $1,500 deductible. That meant if you had 1,500 in medical expenses, all of that first 1,500 would be your individual cost. Now, if you incurred medical expenses of $2,000,

you're paying that first $1,500 and then coinsurance kicks in. most plans will have like 20 % where you're still paying above and beyond the deductible. But the other 80 % is picked up by the insurance company. So in the example of $2,000 of medical costs for one person, and let's say you're on a $1,500 deductible plan, you're paying that first $1,500.

And then the 500 is going to get split between the 20 % you pay and the 80 % that the insurance company pays. So in a healthcare sharing plan, taking that same kind of concept, you're going to be responsible for paying whatever that marker is. They're not going to call it a deductible, but let's just say they have the same levels. You're going to pay that first 1500 plus the additional 20 % of 500.

which is another $100. So you're all in cost would be $1,600 and the insurance company is paying $400 in that example. And in this case, if it's a healthcare sharing plan, the healthcare sharing program is picking up that extra $400. So the share amounts themselves, the premiums, AKA the premiums, they're usually much lower than a traditional insurance plan that you'd find on the marketplace or through Cobra.

Deb Meyer (07:11.976)

And the other important caveat for lot of healthcare sharing plans is that they're faith-based. Now, there are a lot of options, and I'm not here to tell you which specific option might work best for your family. I want you to do your own due diligence and research. But I'm just going to give some of the more popular insurance healthcare sharing plans, and then it's up to you to decide, you know, if one of those might be right for your family. So Metashare is one. Liberty HealthShare.

Christian healthcare ministries, Samaritan ministries, and then for Catholics specifically, have Solidarity Healthcare. Now, I will say from a personal experience, I did go on MediShare for a short time in 2018. That's when my family and I took that three month adventure to Spain and my husband had quit his job in the prior year, so we weren't with any kind of traditional insurance plan.

and me being self-employed, him not employed at that time, we didn't really have a lot of other alternatives. We did do some research on the government programs at that time and just didn't feel the expense was worth the level of coverage that they were giving. So, we went with Metashare. And again, that's not an advertisement for Metashare. even as a fee only advisor, I don't kind of get any compensation. I'm not advertising on this podcast. So.

It's really just my personal experience of using Metashare in 2018, and I'll incorporate some of those examples as I go further in this episode. Okay, let's take a quick break. First off, I just want to encourage you, even if you're not in the position where you need to look at healthcare sharing programs, this is one of the most popular blog posts I've had on my website for a couple of years now.

on healthcare sharing plans. So I encourage you to share this episode with a Christian or a Catholic friend that you know is self-employed or in between jobs or perhaps retiring early and wouldn't be eligible for Medicare coverage. It's really important that they get good information and not just noise on the internet. Okay, end of break. Let's talk about some of the important considerations. So for a lot of healthcare sharing plans,

Deb Meyer (09:37.004)

they're going to be pretty limited in what pre-existing conditions they'll cover. And that means if you're seeking family coverage, it's not just about your coverage, it's about your kids and your spouse. So in the case of like my son's surgery, this was something that he had at birth and have we been on a traditional or I'm sorry, we were already on a traditional insurance plan. So they had to cover this procedure.

But if we were in a medical sharing plan, I don't think we would have gotten the coverage because it was a pre-existing condition. And with the preventative care, that's another piece of it with these healthcare sharing programs. Different programs are going to look at preventative care differently. So usually on most traditional insurance, you get well annual visits for your children and for yourself as an adult.

But in the case of Metashare, when we were on it in 2018, the well visits were not covered. So we paid out of pocket about $130 per well visit back in 2018 for each of our three boys. Now, the other thing to think about is whether you're looking at it from a preventative care standpoint or if you're just simply seeking some catastrophic coverage.

in which case these plans could be very valuable. if you're willing to bear some of the normal, typical costs associated with medical conditions, great. And then this could be kind of that supplement to help if there is an unexpected medical emergency, hospitalization or ambulance, anything like that, that you're gonna need some assistance paying those additional bills.

For maternity coverage, that's also going to vary by provider. I know with Metashare, they had some very stringent rules around how long you were a Metashare participant before you got any kind of maternity coverage. And that's really to protection against them so you don't join their program, have the baby, and then get off Metashare right away. And I don't blame them for that. But again, you're going to have to really probe and do your own research on these different

Deb Meyer (11:54.526)

providers and see which ones offer that kind of coverage that you're looking for depending on your family's life stage. The other thing to be thinking about as you're evaluating some of these healthcare sharing programs is their track record. How long has the healthcare sharing plan been around and do they have a good history of paying a lot of those medical costs that come up outside of the piece that you are personally responsible for paying?

are they actually sharing in the expenses? So one of the reasons we particularly chose MediShare, even though we're Catholic, we knew they had been around since 1993 and we also had heard from other people that were using them that they had a good reputation of paying the claims. So we knew that, again, we were in a shorter time span of when we actually needed this coverage, because then once my husband sought other employment and was with a bigger employer,

we got on a traditional health insurance plan later, but, for that time being, just gave us comfort knowing that Metashare in particular had been around since 1993. And again, that's my personal preference is having a longer track record and a bigger company. but it's going to be up to you, like how, how long you feel a track record is necessary to, and then even just digging in the expenses of how much they typically cover.

of those unexpected medical costs. And with any healthcare sharing program, the nice part is they're probably going to align with your values. You can get a very clear idea of what their stance is on abortion or birth control or drug and alcohol related injuries. So those are all things to be thinking about and considering as you're deciding whether this might be an appropriate item for you. Now,

I don't want to just highlight the benefits. I know there are some downsides to healthcare sharing programs. One example I gave earlier was that $130 well visit per child in 2018. That was the 2018 cost. I have no idea what the new cost is, but in some of these cases, you have to actually do the visit to really understand what they're going to pay for or not. And ignorance.

Deb Meyer (14:14.634)

isn't bliss, but again, oftentimes you might have to take that risk and not know exactly what things are going to cost. then even if they have a good history of reimbursing, some companies are very slow to reimburse. So I know of a friend that used a healthcare sharing plan that said they were generally very good at negotiating rates and things like that, but it just took a very long time for them to get reimbursement.

cash flow back into their family's bank account. So with any of these, like in insurance, usually the insurance company is negotiating their pay and their portion on your behalf. It can be different where you're kind of front loading some of these bills and then expecting the reimbursement later. Okay, other downside, on like medication costs. I know in 2018 when we used Metashare,

there were two prescriptions we got and that was $140. I mean, that's a lot of money, especially in 2018. So even though like now, you know, going through my son's surgery recently, I had medical prescription costs, but like our out of pocket was $50 on three different medications. It was considerably lower because we had a traditional health insurance.

So again, any time you compare it to traditional health insurance, if you're working for a large employer that offers coverage, almost always that large employer is going to have a better option for you. But for the people that are really seeking outside solutions, they don't have that large employer that offers a good health care plan, these health care sharing programs are a good alternative to consider. And then,

Again, just keep in mind that healthcare sharing plans aren't for everyone. So if you have pre-existing conditions or if your child or spouse has pre-existing conditions, it's going to be very difficult to find a healthcare sharing plan that will pick up those expenditures. But if you are in a situation where everyone's pretty healthy and fewer doctor visits, things like that, it can be a real savings to your family if you're willing to take that risk of not quite knowing exactly what.

Deb Meyer (16:33.91)

is going to get covered or not. The other thing to think about with traditional health insurance and high deductible plans is that you have those options of contributing to the HSA, the health savings account. Because this isn't insurance, there is no kind of supplemental health savings account, anything like that. from a tax benefit standpoint, almost always the large employer plans are going to win over the health care sharing plans.

But if you're really wanting to align your faith with your values and seeking it out through an insurance solution or rather an alternative to insurance, I do think healthcare sharing plans have a good place. I will link in the show notes the related article on healthcare sharing plans so you have a little bit more of these details in writing. And then I'll also link to

the options that I cited earlier in the episode, Metashare, Liberty Health Share, Christian Health Care Ministries, Samaritan Ministries, and then Solidarity Health Share for Catholics.

Deb Meyer (00:01.806)

All right, so this is a little bonus. I know we talked about healthcare sharing plans and that's good for some types of people, but I also want to touch on those who are in traditional health insurance plans and just talk about some of the things I look for as an advisor when I'm helping clients explore their options at the time of annual enrollment when it comes to healthcare decisions. So.

Typically, you know, a lot of employers are going to have more than one plan offering. They might offer one plan that has a lower deductible, but greater predefined costs for office visits and the premiums themselves are going to be higher in those instances. You typically, you know, will say, okay, it's going to be $25 to visit your primary care physician.

$50 to see a specialist. Those are all co-pays that you would pay at the doctor's office when you're going and receiving that care. Or if you need to go to an urgent care or get in an ambulance, you know ahead of time what those costs are gonna be. But because you have that certainty, you're also going to have more in premiums that you're having to pay throughout the year.

And with that certainty, you also would not be eligible for a health savings account, which is essentially a tax deferred account that can help with not only a current year tax deduction, but also let the account grow over time if you don't use it for health care expenses right away. So one of the things my family has done over the last couple of years when we've evaluated whether to do the more expensive

premium plan with defined out-of-pocket costs or the higher deductible plan that's also eligible for a health savings account, we've usually erred on the side of the high deductible plan with the health savings account. And the reason for that is twofold. Number one, we have some reserves that we can use for out-of-pocket medical costs.

Deb Meyer (02:20.118)

And we're in a position that we do want to save on taxes to the maximum extent we can. So we max out our health savings account contribution as a family. And then we let that account grow and actually invest it in, you know, the stock market and our target asset mix. So that account balance is growing for us. And then we're using just out of pocket money.

from our checking or our savings account to take care of those medical costs outside of the premiums. So that's kind of a strategy we've employed over the last few years and it has been really financially helpful to do that. But for those who are in more of a fixed income that are concerned about some of those irregular expenses, it can be very scary to go into a high deductible plan.

And also I'll point out with the high deductible for our family, we don't have a lot of ongoing medical issues. So, you know, we had this one surgery, but that was a one and done kind of thing. We have another son who suffers from juvenile arthritis, his condition is very controlled and we just do like once a year visits to.

for him that are specialized. Outside of that, we're very fortunate and blessed that like our kids haven't gotten in a lot of major accidents or had lots of medical procedures, but we know that that's not always the case. So for families that have either adult family members or children that have extensive medical issues, know, those high deductible plans are simply going to be out of reach for a lot of those families. Having that certainty of the

higher premiums, but more fixed costs and lower potential out-of-pocket max usually can be beneficial for those families that have more medical conditions that are ongoing. Furthermore, we don't have a lot of medications that our family members are on. that's again, something if we were on a lot of medications and trying to control certain issues, we would be

Deb Meyer (04:44.278)

reconsidering that position. for our family, it has made sense to do the high deductible. For families that I work with that have ongoing medical issues, we weigh the pros and cons of how much that's going to look like on an out-of-pocket basis when all is said and done and factoring in the premiums. And then on the health savings account, the nice part is you contribute

an amount as the employee, but then your employer also typically contributes an amount towards that because they want you to choose that plan. It's a lower cost to them as well. So if you think about that earlier statistic I cited with employers typically paying over 72 % of the cost of an employee's medical premiums.

Those are real numbers that add up to the company over time. So they're going to want you to get that high deductible plan as well. And it's still usually a cost savings to them to offer that coverage if you're choosing the high deductible versus a more expensive premium and lower deductible plan. Now,

FSAs are another thing that we can consider for medical expenses if you're not on a high deductible plan. That's called a flexible spending account. But the caveat there is that you use it or lose it. So if you think your medical costs are going to be $2,000 out of pocket for the year, but they only end up being $1,500, you essentially have lost out on $500 that you deferred that year.

you really have to be very good about estimating those out of pocket medical costs if you decide to do an FSA. And in the situation where you might have orthodontic work or something like that, it's important to understand what your dental insurance plan covers or doesn't cover because I realized kind of after the fact, after we needed some orthodontic work for our sons that

Deb Meyer (06:47.662)

the particular dental plan we had chosen had no orthodontic coverage and had we been on a slightly more expensive dental plan, we would have had, I think it was 2000 a year of dental coverage for, I'm sorry, orthodontic coverage. So again, these are all finer details to be thinking about at the time of annual enrollment, looking at what might come ahead in the coming year.

and trying to really estimate what those out-of-pocket costs could be. So if you know for sure there is no dental option that has any kind of orthodontic coverage, but your kid's gonna need braces within the next six months, then yeah, you might wanna set aside as much as you can in that FSA to cover the costs of those braces. Orthodontic work is very expensive. I can tell you firsthand.

I've had two that are already, one, my oldest son, and then my youngest, he has a underbite that we kind of have to do two different phases. by the time he rolls around to a second phase, I'll know to be on the right dental insurance plan. But having said that, even people like myself, I'm a financial advisor. I do this kind of work every day looking at the...

financial implications and even I sometimes mess it up year to year. So don't beat yourself up over it or if you realize, gosh, I could have been contributing to this and I didn't, it's okay if you know you're gonna be able to do it the following year, that's an important consideration. Now on the FSA, there's two different types of flexible saving accounts. One is that healthcare expense where you use it or lose it on medical expenses.

and you have to estimate those medical costs, not the premiums, but like the out of pocket medical costs really well. The other is called a dependent care FSA and that's for daycare, camps, any kind of qualified programs because you and your spouse are, we're both working outside the home and earning an income. So in those situations, you want to, if you know you're going to have, let's say at least $5,000 of

Deb Meyer (09:03.914)

out-of-pocket daycare expenses for a young child and you're both working earning an income you could go ahead and and contribute to that dependent care FSA so you're at least saving a little bit of money on taxes. So those are some considerations at time of open enrollment that I'd love for anyone who's in a traditional employer

plan, medical plan has traditional benefits offered. Those are some things to be thinking about. And I hope this episode brings value regardless of whether you're in that self-employed bucket or work for a smaller employer where you don't have those traditional offerings or for those who are able to have the traditional offerings and kind of sorting through those options. So two for one. All right.

Deb MeyerWorthyNest LLCfamily finance, beyond budgets, healthcare, insurance, healthcare system, healthcare sharing plans, COBRA, Obamacare, medical expenses, financial protection, pre-existing conditions, preventative care, high deductible plans, HSA, FSA, MediShare, Liberty HealthShare, Christian Healthcare Ministries, Samaritan Ministries, Solidarity HealthShare, traditional health insurance, tax savings, dental insurance, orthodontic work, braces, medical billsComment