A Better Way to Pay for Health Care?  

An innovator in the health-sharing space shows how to rein in costs while protecting human dignity. 

A lthough Robert F. Kennedy Jr.’s nomination to head the Department of Health and Human Services (HHS) remains hotly contested, one thing is clear: Health care costs in this country have ballooned to unprecedented heights. 

During his confirmation hearing to become secretary of the most expensive agency in the government, RFK Jr. displayed limited knowledge of Medicare and Medicaid which, when taken together, are the largest expense of the entire federal budget. In fiscal year 2023, the federal government spent $839 billion on Medicare and $616 billion on Medicaid. In other words, the HHS spent $1.45 trillion of taxpayer money on these two programs alone. The Pentagon’s budget is half that. In short, the HHS oversees over a quarter of the federal budget. Or, as NR’s Jim Geraghty put it, HHS accounts for one out of every four federal dollars. 

The Affordable Care Act (ACA), which became effective under President Obama, increased both HHS spending and the cost of private health insurance for the average individual. According to a Heritage Foundation report, “the national average monthly premium paid in the individual market in 2013 was $244, while by 2019 it was $558 — more than doubling (a 129 percent increase) from 2013 to 2019.” Since the ACA was passed in 2010, the country’s National Health Expenditure (NHE) has nearly doubled. In 2010, health expenditures approached $2.6 trillion — by 2023 (with an extra boost from Covid-19 costs), that number reached $4.9 trillion. While the ACA offers substantial discounts to low-income users, most middle-class Americans shopping for those plans can access neither competitive premium rates nor subsidies to counterbalance the high premium costs.  

In light of the giant price tag for health care in this country, innovators are challenging the norm and offering a better way for many American families to pay for their medical care. 

Health-sharing organizations have existed for millennia — their origin can be traced to the time of the Apostles, wherein members of the early Church “were together and had everything in common. They sold property and possessions to give to anyone who had need,” as described in the Acts of the Apostles. In the U.S., early Amish and Mennonite communities practiced health-sharing in the model of the early Church, pooling their resources to assist those in need. Now, there are dozens of national health-sharing organizations — and while the majority are Christian, several are secular as well.  

National Review spoke with cofounders Brad Hahn and Chris Faddis of Solidarity HealthShare, a Catholic-focused health-sharing organization dedicated to upholding human dignity — and to increasing price transparency in health care transactions. The organization, which was founded amidst the roll-out of the ACA, seeks to bring religious freedom and market choice back into the health care market.  

A small Mennonite community in Ohio, which had been sharing medical expenses for decades, first inspired Han and Faddis to form a health-sharing ministry. What began as “Melita Christian Fellowship Hospital Aid Plan” — an ecumenical project with a local Mennonite church — soon became a national organization, Solidarity HealthShare.   

Both Hahn (the CEO) and Faddis (the COO) are devout Catholics, who were frustrated by the treatment of religious groups under the ACA. The requirement for Catholic institutions to pay for treatments that directly opposed Church teachings — like abortion, euthanasia, and gender re-assignment surgery — spurred them to take action.   

Solidarity was designed so that members never pay for medical practices that are antithetical to their beliefs. As such, Solidarity will not pay for its members to receive treatments that are unethical according to Catholic teaching. Hahn said they founded Solidarity as a shield “from potential discrimination.” He continued, saying that the ACA mandates — which previously required users to “have insurance and pay for abortion or pay a fine” — motivated them “to try to find a solution against persecution.”  

So, how does health sharing actually work? At Solidarity, it’s pretty simple — each member pays a monthly contribution that is set aside in an individual account. When another member needs a medical bill covered, Solidarity “taps” into a few specific accounts to pay for that bill. (Essentially, the older accounts are tapped first.) This allows members to know exactly whom they are financially supporting. Solidarity HealthShare then acts like a health insurance provider, as a middleman between the patient and the clinic, negotiating prices and paying bills. 

Faddis described Solidarity’s model as a response to an oligopoly of health insurance in the U.S.:  

We likened the current system to the idea that there’s a big healthcare superhighway that used to have a lot of small cars on it, but it’s now all big, oversized trucks. They essentially pushed all of us alternative choices to the side, to the frontage road, and I think there’s a lesson in that. What we discerned is that the future for us — and not just for Christians and Catholics, but for people who care about free market care and controlling our own destiny when it comes to health care — is the idea that we have to establish and build out the frontage road of health care.

Faddis, who lost his first wife to cancer in 2012, had a deeply personal experience battling the health insurance industry while his wife battled a fatal disease. Months went by before they found doctors who offered his wife a treatment plan that both fit her needs and treated her with personal dignity. Solidarity is designed so that members can recommend person-focused and Catholic doctors to the network — and accompany other members along the way of their suffering and treatment.  

Through Solidarity’s digital interface, members can see the other families with whom they have shared their medical expenses, and can send them prayer, encouragement, and thank-you notes. Due to Solidarity’s payment model, members’ contributions do not go to an anonymous pool of cash, but to particular members at particular times. This model creates a real sense of cause-and-effect, as members share each other’s financial burdens.  

Health sharing mirrors a core tenet of Catholic social teaching referenced by the vice president during a recent interview with Fox — the “ordo amoris” or “order of love.” Human beings are naturally — and rightly — inclined to love most those who are nearest to them. Solidarity’s model means members know whose care they are paying for — and who is paying for theirs. The annihilation of anonymity turns health care payment into a shared act of charity rather than an atomized, bureaucratic headache.  

Solidarity doesn’t make a profit off of member contributions. Hahn said, “The big thing is that we’re a health-sharing ministry, and we’re not insurance. Insurance companies have to be for-profit entities — that’s under tax code 501(m).” Through its status as a nonprofit, Hahn said Solidarity has “IRS rules we have to follow. Our compensation has to be fair and reasonable . . . [and we] must have an annual audit that’s publicly available upon request.” Hahn concluded that what he likes most about health-sharing ministries “is the transparency of it.” Solidarity even files 990s every year (tax forms that provide detailed information on an organization’s activities, governance, and finances), although they aren’t legally required to.

Of course, there are limitations to the current health-sharing model. The health-sharing community remains relatively minuscule compared to the insurance industry — Solidarity shared in $67 million worth of medical expenses last year. For the nation’s leading insurance company, United, that number was closer to $100 billion. Nearly 2 million families nationwide use health sharing to cover their medical expenses. While this is still a significant contingent, it’s a drop in the bucket when compared to public and private insurance — 45 million Americans are enrolled under the ACA, 68 million in Medicare, and 72 million in Medicaid. About 200 million Americans have private insurance.  

Further, not all clinics and hospital systems will take health-share cards as a form of payment. People with pre-existing conditions may be unable to attain membership in a health-sharing organization, and health-sharing members with particularly complex medical needs may max out the annual payout limit. (Solidarity’s maximum payout is $1 million per year.) Brokers of health care coverage often recommend that health-share members layer their health-sharing benefits with a personalized health insurance plan to cover potential excess costs.   

One million dollars a year seems like it should be enough to cover even extreme hospital bills, yes? Well, not exactly.  

It should be, but as anyone who has gone through a hospital knows, health costs can be outrageous and unpredictable. Part of Solidarity’s mission is to demand price transparency from hospitals and clinics — and negotiate the price down to something that resembles a market rate.  

Brad Hahn, the CEO of Solidarity, told National Review:  

No one knows how much health care costs in this country. The hospitals don’t. The insurance companies don’t. And so when we come in, we say, ‘there’s some basis out there. You can look at: How much does the hospital get reimbursed from Medicare? How much have [government programs] actually billed the hospital systems? What’s the cash price? What are some of these other clinics charging in the local area that just do cash price?’ We use those terms to negotiate.

Solidarity’s rejection of the standard operating model has been met with some real success — they negotiated a $3 million neonatal intensive care unit (NICU) bill down to $300,000. They rejected a $100 bill for a “mucus collection device” because the “device” was just a box of tissues. Solidarity HealthShare alone could cite hundreds of similar cases.

Solidarity HealthShare — and all health-sharing organizations — face another hurdle: the lack of comparable tax benefits to those enjoyed by customers of standard health insurance. Congressman Mike Kelly of Pennsylvania, chair of the Ways & Means Tax Subcommittee, and Senator Ted Budd of North Carolina are currently working to reintroduce a (modified) bill that would amend the tax code “to treat membership in a health care sharing ministry as a medical expense.” This would allow members to deduct their health-sharing expenditures from their taxes as a health care expense. They are also looking to amend the section of the tax code that prohibits small businesses from offering health–sharing options to their employees as they would offer health insurance — under the current system, the former cannot be deducted from the business’s taxes while the latter can. 

With Republicans in charge of the White House and Congress, health sharing might have a chance to make serious headway as a live option for American families.