Health Share Group Sues New Mexico
Samaritan Ministries claims state oversight of bad actors is "hostile"
Samaritan Ministries International, one of the nation’s oldest and biggest Christian health share ministries, has sued the state of New Mexico, claiming its efforts to punish bad actors is a “hostile” and “longstanding campaign” that violates citizens’ constitutional rights and promotes “religious discrimination.”
“Animus is evident everywhere,” said the complaint, which was filed in December and first reported by the Santa Fe New Mexican.
The state has done nothing to limit Samaritan’s work so far, but the nonprofit says its members there now “find themselves squarely in (the state’s) crosshairs.” Samaritan is pursuing a pre-enforcement challenge to prevent any future legal action by the state, citing a recent Supreme Court decision protecting a web designer from having to create websites for LGBTQ weddings if asked to do so.
“The New Mexico Office of Superintendent of Insurance has sought to shut down other health care sharing ministries in New Mexico, threatening the constitutional rights of Samaritan’s members,” said Samaritan in a statement issued by a publicist, who declined to answer questions about the case.
Samaritan’s complaint also claims that New Mexico’s “endless promoting” of its own health insurance exchange, BeWellnm, shows an “animus towards the kind of conservative social and economic religious views held by sharing ministries.”
Residents of New Mexico, 20% of whom live in rural communities, face numerous healthcare challenges, including high poverty rates, lack of providers, and aging populations.
Samaritan says it has 270,000 members in the U.S., including 900 in New Mexico. The ministry was founded in 1991 and had $50 million in revenue in 2022. It claims to have facilitated more than $411 million worth of expense sharing among members in one year.
Religious groups have used various forms of burden sharing for centuries. America currently has more than 100 groups offering to pool member donations to help other members with their care, but the industry is unregulated and operates outside of established insurance guidelines. Health share groups are not legally required to pay members a single penny in benefits.
Some 160,000 Americans were members of health share groups prior to 2014, when the Affordable Care Act’s individual mandate required adults to have health coverage. Enrollment boomed to 1.5 million members before declining to 1 million, according to the Alliance of Health Care Sharing Ministries, which Samaritan co-founded with other groups.
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The growing popularity of health sharing has led to problems, as unscrupulous entrepreneurs and ex-cons launched sham companies that defrauded many and left customers in debt, ailing or dead due to medical bills that weren’t shared.
Samaritan and the Alliance continue to oppose government oversight of the unregulated industry, including efforts in New Mexico, citing religious liberty.
Samaritan opposes New Mexico’s oversight of bad actors
Samaritan claims that New Mexico’s Office of the Superintendent of Insurance “has evicted four HCSMs (health care sharing ministries) and is circling a fifth.”
Samaritan argues that New Mexico is “harming the harmless, in violation of their rights to religious freedom, religious autonomy, free expression and association and equal protection.”
But reporting from MinistryWatch and other outlets shows that the five groups New Mexico has sought to punish are among the industry’s bad actors.
In 2019, New Mexico sought to punish Aliera Healthcare, which operated Trinity Healthshare, and was founded by Shelley Steele, a man previously convicted of federal securities fraud and perjury.
Aliera generated almost $544 million in healthcare payments from members but paid out only $189 million for members’ claims. Steele steered $100 million to himself and his businesses. The company declared bankruptcy last August, according to the U.S Department of Labor.
Aliera is the only one of the five bad actors that Samaritan will publicly criticize, calling the company a “sham” organization.
Liberty HealthShare/Gospel Light Mennonite Church Medical Aid Plan has a lengthy history of fraud accusations and faced lawsuits in Florida and Ohio over non-payment of member claims and deceptive practices. New Mexico fined the group $10 million, which was later reduced to $2.1 million. The case is now on appeal.
A scathing profile of Liberty published a year ago by ProPublica and republished by MinistryWatch shows how some of its leaders routinely declined to pay for members’ care and instead invested in business enterprises, including a winery and marijuana operation.
“…the family’s long and lucrative history illustrates how health care sharing ministries thrive in a regulatory no man’s land where state insurance commissioners are barred from investigating, federal agencies turn a blind eye and law enforcement settles for paltry civil settlements.”
Samaritan’s complaint says New Mexico’s effort to punish Liberty “is an aggressive ongoing enforcement against the same kind of conduct in which Samaritan has been engaged in New Mexico for 27 years.”
In its complaint, Samaritan criticizes New Mexico for policing groups that are “peers to Samaritan.”
The industry is rife with such problem companies. The FBI found that Medical Cost Sharing, Inc. collected $7.5 million from members but paid out less than $246,000 for medical costs, less than 3.5% of its revenue.
Sharity Ministries Inc. filed for bankruptcy in 2021 amid accusations by state authorities that it deceived consumers by running “a sham health-insurance business.”
It is “scarily easy” to set up a health share company and sell memberships, as comedian John Oliver showed in 2021 with his company, JohnnyCare. “See if you qualify to send us money and get almost nothing in return,” he joked.
States warn of health share risks
Many states have punished individual health share groups, but Colorado and Massachusetts are two of the only states currently requiring health share groups to submit data about their operations.
An analysis of Massachusetts data by JoAnn Volk of Georgetown University’s Center on Health Insurance Reforms warned the state’s citizens of the risks of health share.
“Even though they may be viewed as an alternative to marketplace plans because they have features that closely resemble insurance and may have lower upfront costs than unsubsidized marketplace plans, they don’t follow the same rules or provide any of the protections that insurance plans do.”
Alliance advocates for accreditation over regulation
Alliance of Health Care Sharing Ministries was founded in 2007 by Samaritan and Christian Care Ministry (Medi-Share), two industry leaders.
The Alliance favors accreditation over regulation, and in 2022 launched a Health Care Sharing Accreditation process that will give “reputable” ministries “a very public way to demonstrate their integrity and credibility.”
The Alliance says it now has seven member companies but declined to reveal who they are, making it difficult for consumers to determine which groups are legitimate. (It does identify its four “governing members: Samaritan, Medi-Share, OneShare Health, and Altrua Healthshare.) Instead, the Alliance puts the burden on consumers to ask any individual company if they are accredited.
The Alliance “condemns” and expresses “outrage” at companies “pretending to be Health Care Sharing Ministries,” and expressed displeasure with an “unfortunate incident” in Missouri that resulted in death and financial despair. But it equates regulation with repression.
This article has been updated to reflect that Colorado also requires health share groups to submit data about their operations. An earlier version of this story said Liberty Healthshare has a lengthy history of fraud; we have updated that to “fraud accusations.” And Liberty Healthshare has leaders, not “owners”—we changed the wording to reflect that.