From the Mailbag: Medi-Share vs Insurance

Reader Geoff R. from San Diego, CA wrote in to me with a question; with his permission, I share it here and offer my reply.

I've been looking into Medi Share and see on their site and yours that it's not insurance. I read the explanation but still don't quite get it. If you join, you pay a certain amount every month, and then they pay your medical bills. In what way is this not insurance?
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​Great question.

While it's true that Medi-Share and other Christian healthcare sharing ministries function similarly to traditional insurance, there is a crucial difference. Insurance companies operate a for-profit business where they take in your premiums and guarantee they'll pay for certain healthcare expenses.

Medi-Share is a Christian non-profit that facilitates members paying each others' bills. If they were an insurance company, they would keep your monthly payment, invest it, and aim to pay out a smaller amount for future claims than they took in initially. Instead their role is simply to distribute monthly payments among members that have medical expenses, providing all members with predictability and efficiency for a much lower cost than insurance companies. Members can even vote on what types of medical expenses are shared.

So while both Medi-Share and insurance companies will both get your medical bills paid for you, they accomplish that task in very different ways. Insurance companies do it in a heavily regulated environment, collecting premiums, investing them for profit, and paying out for claims the minimum they're required to. Medi-Share lets members decide what expenses are shared, and then as a non-profit organizes it so that everyone is paying each others' medical bills with as small a monthly payment as possible. 

Geoff, I hope that helps!