Are Christian health care sharing ministries a viable method of reducing medical costs?

(In a comment, Kristor explains that mutual aid health insurance societies, many of them based on common ethnicity or religion, in which members paid each other’s health care costs, far from being something new, were once very common and actually pre-dated stock insurance companies.)

Ken Hechtman writes:

I’m not sending you this article in order to get into a debate about the author’s main point about conservative hypocrisy. I don’t think that would be very interesting.

But I am interested in these Christian health care sharing ministries that the article mentions. I’d never heard of them before and I thought maybe some of your readers might have first-hand experience with them. Just as a first approximation, it looks to me as though they solve two problems that Obamacare doesn’t, one of which even Canadian Medicare doesn’t solve.

I don’t know how to describe the first problem except in the most abstract and philosophical terms. Nobody, not even the biggest market fundamentalists around, really wants a pure free market in health care. The cost of catastrophic care would wipe out even an upper-middle-class family. What they want is a free market in health insurance and that’s not the same thing. Health insurance is about pooling risk and pooling risk is about leveraging the spirit of “we’re in this together” even if it’s in order to reach the goal of “screw you, Jack, I’ve got mine.” And towards that end, this is genius. Christians don’t mind reaching into their pockets to help out other Christians. I imagine it doesn’t feel like an onerous cost. I imagine it feels like doing something the supreme being and creator of the universe would approve of.

Now, being on the left, I personally can value both diversity and social solidarity. It’s a free country, I can value anything I like. But I can’t advance both diversity and social solidarity at the same time because the real world doesn’t work that way. In the real world those two values trade off against each other. Old Labour understood that. The BNP understands that today. New Labour doesn’t get it and that’s why the BNP is eating New Labour’s lunch. These Christian HMOs represent such a dramatic advance in social solidarity, they’re worth looking at no matter what the cost in diversity.

The second problem these Christian HMOs solve is the lawsuit problem. If you can solve the malpractice lawsuit problem, you can solve the defensive medicine problem and only then can you begin to control costs.

Anyway, like I said, I’d be very interested to hear from anyone who has first-hand experience with one of these organizations.

Here is the article Mr. Hechtman sent, from the site “rd,” which stands for religion dispatches. If you want to skip the author’s opening section about the hypocrisy of conservatives, the part about Christian health cost sharing ministries starts here:

Hypocritical Freakout over Shari’ah, but Not Biblical Law
Post by Sarah Posner—March 22, 2011

A state court judge in Florida has ruled that he will use “Ecclesiastical Islamic Law” to decide whether a dispute between former trustees of the Islamic Education Center of Tampa, Florida, and the mosque itself was properly referred to arbitration by an Islamic scholar.

Fox News and conservative bloggers are freaking out about the long, slow, imaginary march to shari’ah law taking over the Constitution. But they’ve never objected to very similar arrangements made by Christians.

First, the Florida mosque case: according to an article in the St. Petersburg Times, four former trustees of the mosque sued over monetary dispute. Although there is a bit of confusion over the precise sequence of the proceedings, the parties had agreed to submit disputes to arbitration by an a’lim, who decided last December that the former trustees had been ousted improperly. The mosque’s lawyer—who is arguing against the application of Islamic law in the state court—has numerous complaints about how various aspects of the arbitration proceeded. In any case, before the state court judge is the question of whether the arbitration decision is enforceable. According to the article, that is the only aspect of the case in which he would apply Islamic law:

The judge said he would use Islamic law to decide only the legitimacy of arbitration.

“What law would we be applying (at) trial?” [mosque lawyer] Thanasides asked.

“That trial would be civil law,” the judge said. “Florida law.”

Seems pretty straightforward, and not at all a threat to the Constitution. As a law professor correctly noted in the article, “If we both sign a contract agreeing to be governed by German law, then Florida courts will interpret German law.”

Such arrangements are also, notably, quite common in religious settings. Let’s take one example apropros to the anniversary of the Affordable Care Act: the Christian health care sharing ministries who lobbied for and received an exemption from the individual mandate in the law. These ministries (non-profits who receive a tax exemption from the federal government) are membership organizations through which members agree to share in each others’ health care costs, in lieu of insurance. And they also agree not to sue each other.

Samaritan Ministries, whose president, James Lansberry, speaks at Christian Reconstructionist events, is the largest of the health care sharing ministries. Samaritan has about 46,000 members, and there are thought to be 100,000 members of HCSMs nationwide. And even though the exemption in the health care bill was limited to HCSMs and members in existence before the passage of the law, Medi-Share, a Florida HCSM, was last year claiming that 11 million Americans had the ability to join an HCSM and “need not comply with Obamacare.”

Samaritan requires that its members agree not to sue it:

Samaritan Ministries is a community of Christians and its members, as followers of Christ, believe that the Bible commands them to make every effort to live at peace and to resolve disputes with each other in private or within the church (see Matthew 18:15-20; 1 Corinthians 6:1-8). A member who chooses to violate this command of scripture and his covenant with his SMI brethren, and takes a dispute to court, destroys our fellowship and has chosen to be as if he had never been a Samaritan Ministries member, and to not have his needs shared with the membership. Therefore, in becoming a member or reaffirming your membership, you agree that any claim or dispute you have with, or against SMI, its employees, directors, members and associate members, that is related to SMI and its ministries in any way, shall be settled by Biblically based mediation and, if necessary, legally binding arbitration. And SMI agrees similarly with respect to any matter SMI might have against you.

Shari’ah scare mongers complain that application of shari’ah law threatens the Constitution, most specifically by interfering with the Seventh Amendment right to a jury trial, but also by requiring application of religious law over state law. But what they ignore is the fact that Christians and Jews also make such arrangements in private contracts as well, with nary a peep from conservatives.

Anyone who joins Samaritan agrees to give up their right to sue in court; they agree to be bound by “Biblically based” alternative dispute resolution. That’s their right to choose to give up their right to sue in court, just as (if there was indeed such an agreement) the trustees of the Tampa mosque agreed to submit to arbitration. Imagine, though, that the provision from the Samaritan agreement substituted “Muslims” for “Christians” and “followers of Muhammed” for “followers of Christ” and “Qu’ran” for “Bible,” and so forth.

And imagine further that this had been an Muslim organization with a tax exemption which had hired lobbyists who succeeded in persuading lawmakers that they were entitled to be exempt from a federal law that virtually every other American had to comply with. (To be clear, there are serious legal and political questions about whether any religious group is entitled to such an exemption, barring a demonstration of a burden on their religious practices.) Imagine that the Muslim president of that imaginary organization had, like Lansberry has, accused the federal government of stealing the public’s money. Imagine all of that for a minute. There would have been an unbelievable outcry: the anti-Muslim shari’ah fear-mongers would have claimed the Constitution was under seige and the Christian nation under attack by religiously-motivated seditionists.

These sorts of arrangements—contractual agreements to submit to dispute resolution outside of the courts, with choice-of-law provisions—are commonplace. The anti-Shari’ah propagandists get away with the double standard of only depicting such arrangements between Muslims as anti-American. [LA replies: Pace Posner, I don’t see conservative hypocrisy here, because Islamic sharia law is alien and a threat to our society, while Judaism and Christianity are not. Any official recognition of sharia, even if in areas that seem private and harmless, are in reality part of the Islamic strategy of spreading the power of Islam until it takes over everything. An alien and threatening religion should be seen differently and treated differently from religions that are part of our civilization. By her tiresome focus on conservatives’ “hypocrisy,” Posner misses what is new and interesting about the Christian Health Ministries, which Mr. Hechtman has brought out.]

- end of initial entry -

Kristor writes:

Mr. Hechtman is not quite correct in arguing that free market fundamentalists don’t really want a free market in healthcare, but rather only in healthcare insurance. We want both. If either of those markets is unfree, the other soon will be.

There is nothing in insurance per se that keeps healthcare prices from coming under market control. What keeps that from happening is that most consumers of healthcare and insurance are prevented by laws and subsidies from ever having to pay—or therefore understand—the full cost of the insurance they enjoy, or ipso facto of the healthcare they consume. Their insurance is subsidized, either directly via Medicare, or indirectly via tax subsidies for group health insurance. So they buy richer policies than they would if they were buying health insurance on their own nickel. By “rich” I mean “low-deductible.” You’ll blow right through a $100 annual deductible with just one visit to the doctor. So, it makes no sense for beneficiaries of low-deductible policies to spend time or energy thinking about healthcare costs: the insurance will pay for all of it. The perfectly predictable result: higher prices for healthcare.

The higher the deductible, the cheaper the policy, the more attention healthcare consumers will pay to the cost of normal, quotidian healthcare, and the greater the market pressure to keep prices for such care low. It’s very, very simple. All that needs to happen is to get most of the health insurance in force out there covering only truly catastrophic expenses (these are the only sorts of expenses for which insurance is economically rational). And the way to make that happen is simple: repeal all the subsidies for insurance. Do that, and the whole healthcare economy will right itself. The problem was created by government intervention in the markets; it can be fixed by the cessation of that intervention.

The idea behind Christian health care ministries is so very workable, that it is the basis of the entire private insurance market in the U.S. (indeed, it could be argued that it is the basis of society as such). Most of the older insurance companies in the U.S. were founded as fraternal aid associations of one sort or another, by people who could not get coverage in any other way, and who banded together in affinity groups to provide each other mutual assistance. The list of such carriers is long: Lutheran Life, Church Life, Knights of Columbus Life, Fireman’s Fund, Travelers, Teachers Insurance & Annuity Association, GEICO, USAA, AAA. And many of the older insurers are (or once were) “mutual” companies, owned by their policyholders: MONY, New York Life, Metropolitan, Mutual of Omaha, Mutual Benefit, Prudential, and Northwestern are the most famous. The owners of a mutual insurer are, in effect, insuring each other. In 1900, very few insurers were stock corporations; the overwhelming majority were fraternal aid societies or mutuals.

Drive around an old residential neighborhood that has not been razed in the last 60 years and you will see meeting halls here and there, or social clubs, set up by and for various immigrant groups. The Scandinavians were big on this sort of thing, but you can find lots of buildings established by Italian, Polish, and German fraternities, too. Immigrants from a country like Finland would naturally end up living in the same neighborhood, and would create these neighborhood associations to defend themselves from gangs, City Hall (the most powerful local gang), and the dangers of mundane life. Many volunteer fire companies started out as projects of such fraternal aid societies; sometimes, firefighting and fire insurance were services of one and the same organization (in rather the same way that both auto insurance and roadside assistance are services provided by AAA). Many such societies were linked to churches; the Polish parish and the Polish fraternal society naturally shared a lot of members, and the latter might hold its events—dances, socials, festivals—in the undercroft of the former.

It is these sorts of natural associations, in which people band together for mutual aid and comfort without any intervention or direction from above, that have been mostly gutted by the vast federal takeover of charitable and insurance functions that took place in the 20th century. As the federal behemoth stumbles and crumbles under its own weight, and the deracinated, atomized, amoral civil life it has enabled, wherein everyone is a stranger in a strange land, becomes more and more difficult to sustain, we may expect fraternal aid societies to begin making a comeback.

LA to Kristor:

“The owners of a mutual insurer are, in effect, insuring each other. In 1900, very few insurers were stock corporations; the overwhelming majority were fraternal aid societies or mutuals.”

I didn’t know this, this is great information.

Kristor replies:

People forget how society naturally organized itself before the statists began their insults to the natural order. People forget that before about 1900, municipalities had nothing to do with creating marriages; there were no marriage licenses. Churches performed marriages. No one else had the authority to do it.

No one knows that in 1850, banks issued their own currencies, that competed with the currency of the Bank of the United States. We have so much forgotten the idea of private bank notes, that we cannot even understand why Hamilton had to fight to get the U.S. to own its own bank, and issue its own currency. If we had competing currencies today, we would not have inflation. We’d have boomlets and bustlets, rather than the enormous run-ups and crashes we now get.

People forget that there were once no public schools, no public universities. They forget that 150 years ago, pretty much the only hospitals out there were run by churches, as charitable operations. That’s why nurses used to wear those funny little hats; back in the day, all nurses were nuns, and those funny little hats nurses wore up until about 1970 were descendents of wimples.

Yet that natural, organically developed system of social organization, cobbling itself together out of the ruins of Rome and under continuous assault from the Muslims, built the West. It wasn’t perfect. It was just less imperfect than all its competitors.

Dean Ericson writes:

Kristor wrote:

“People forget how society naturally organized itself before the statists began their insults to the natural order.”

Louie Leftkowitz replies:

Society naturally organized itself?—but that’s impossible! Everyone knows society is incapable of organizing itself without GOVERNMENT. Government is the prime mover, it is the alpha and omega, it’s big, it’s huge, it’s powerful, more powerful than a locomotive, faster than a speeding bullet—let’s not kid ourselves; government is God. Without a government edict the sun would not rise, or might rise in the West, or might not shine on women and minorities. Without government nobody would know what to do, would mismatch their socks and burn the toast and hit their thumbs with hammers. This is why everyone must focus all their energies on government, and think about it constantly, and devise strategies for increasing its power, and everyone must vote, and work for candidates for public office because government officials are the most important people in society; wise and all-powerful government officials with great hair and large rippling muscles and deep, confident voices telling us what to do. They’ll tell us how to live, what to wear, what to say, whether to attack Libya or Iceland, and so much more! Remember, back when we had LESS government we had MORE racism, sexism, homophobia, bigotry, environment-destroying, war-mongering capitalism and also more mean-spirited, colonialist-imperialist, cigar-chomping plutocrats in top hats stealing milk from babies. So we need MORE government, not less. Only when the government is finally able to absorb 100 percent of the people’s money, time, and love, will all the world’s problems be solved. We must organize, organize, organize for Bigger Government! Only then will people finally be happy, their wrinkles go away, their bald heads grow hair, their children won’t argue, and we’ll all live in peace and plenty until the end of time. Trust me.

March 26

James R. writes:

Three cheers for Kristor.

I was aware of a lot of the info Kristor mentioned in his response on the “Christian Health Ministries” topic, but he put all the pieces together brilliantly (and pithily) to reveal the whole picture, like tiles in a mosaic. Very informative and I gained extra insight from what he said.

Posted by Lawrence Auster at March 25, 2011 11:25 AM | Send