Las Vegas Sun

March 28, 2024

Shut down Christian health plan, state says

In a dispute that pits religious liberty against state regulations, the Nevada insurance commissioner has ordered a national Christian group that collects and dispenses money for its members' medical costs to cease operating in the state.

Florida-based Christian Care Medi-Share has about 60,000 members, including several hundred in Nevada.

Brett Barratt, in-house counsel for the Nevada insurance commissioner, said Medi-Share is acting as an insurance company without a license.

Nevada joins a handful of states that have outlawed the group's activities, but others states remain silent.

Unlike customers of licensed insur ers, Medi-Share members might not receive benefits mandated by law and have no safety net if the entity goes bankrupt, Barratt said.

Medi-Share, which started in 1993, says it can operate outside regulations because it's not an insurance company.

"We don't advertise as insurance, we don't claim to be insurance and we tell all our members, 'You're not buying insurance,' " said Stephen Sullivan, chief counsel for Christian Care Ministry Inc., the nonprofit umbrella organization for Medi-Share.

Medi-Share is a "mutually sharing ministry" among Christians who agree to help pay one another's health costs, Sullivan said. Medi-Share members pay monthly "shares," not premiums, ranging from $223 for singles younger than 40 to $459 for families. Members must profess to be Christians and adhere to a morally conservative lifestyle, including no tobacco and no abuse of drugs or alcohol. They risk having requests for money denied if their medical condition is the result of what is deemed a nonbiblical lifestyle.

Such conditions raise a red flag for the Nevada insurance commissioner's office. For example, Medi-Share - whose guidelines are created by its members - provides coverage for pregnant married women but not for single mothers unless there's evidence of a rape that has been reported to police.

Medi-Share membership is not open to non-Christians or to Christians with preexisting medical conditions.

Church leaders may be called to verify the testimony of applicants, the guidelines say.

Sullivan said many members are drawn to Medi-Share because they don't like the concept of funding procedures that result from lifestyle choices they find immoral.

Nevada follows other states, such as Kentucky, Montana and Oklahoma, in banning the organization's activities.

Sullivan said Christians are called by the Bible to carry one another's burdens to fulfill the law of Jesus Christ, so such bans threaten to compromise the religious liberty guaranteed by the U.S. Constitution.

"Members see this as a fulfillment of that scripture," Sullivan said. "It's not really for the state to determine if it is or isn't a proper way to fulfill that scripture."

Ben Gillard, Nevada's chief insurance investigator, says it's the nature of the product, not the name, that determines whether it is insurance.

"If it walks like a duck and talks like a duck, it must be a duck," Gillard said.

Barratt said Medi-Share is also avoiding a 3.5 percent state tax on insurance premiums by operating without a license.

"I think it's looking for loopholes with religion and the First Amendment," he said.

According to audited financial statements provided by Medi-Share, the ministry has avoided U.S. income taxes by keeping the trust for member payments in off shore accounts. Sullivan said the off shore accounts were established because Medi-Share needed insurance to protect its solvency from large payments, and it couldn't buy that coverage in the United States because it discriminate s based on religion. In 2006 Medi-Share eliminated the insurance policy, so the trust will move back to the United States, he said.

In 2006 Medi-Share paid about $53.5 million for members' medical care, took about $10 million of member payments for administrative costs and ended the year with net assets of $2.3 million.

Robert Baldwin, president of Christian Care Ministry, is the highest-paid executive, earning $160,000, Sullivan said.

Sullivan is optimistic that Medi-Share will prevail against the claims brought by insurance regulators in various states. In January a Kentucky Circuit Court judge ruled Medi-Share is not engaged in the business of insurance and is exempt from requirements of the insurance code. The judge said Medi-Share does not assume the risk on behalf of its members - because the ministry does not guarantee payment of claims - which is a primary requirement of insurance. The Kentucky attorney general's office has appealed the ruling.

In Illinois an appointee of that state's insurance division determined in an administrative hearing that Medi-Share does provide insurance.

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