ARDEN, N.C. — Rachel Kaplan was uninsured when she became pregnant last year. So her doctor suggested an alternative: a nonprofit called Sedera, which bills itself as a medical cost-sharing service.
Sedera members pay monthly fees that get pooled together, and the organization can use the collected funds to reimburse members for medical bills. The model is somewhat akin to health insurance, but Sedera isn’t subject to the same regulations.
“It seemed simple enough that we were like, ‘OK, this makes sense,’ only to find out when I tried to submit the bill from the hospital, we were denied,” Kaplan said.
She and her husband, Andrew Sheffield, reached out to Sedera for reimbursement after their son, Lucas, was born in August 2023. The delivery had involved an induction, 40 hours of labor and ultimately a cesarean section — the kinds of complications that can send hospital bills skyrocketing. But to the couple’s shock, they said, Sedera told them they were ineligible, citing a policy near the end of the group’s member guidelines: Within the first year of membership, medical bills for childbirth “are not shareable.”
“We basically gave Sedera our money and received nothing in return,” Kaplan said. “The rug was pulled out from underneath us.”
Sedera did not respond to multiple requests for comment.
Sedera is what’s known as a “health care sharing ministry,” one of more than 100 such groups in the U.S. Most are rooted in Christianity and emphasize their faith-based values. The model has grown in popularity and revenue in the last decade, as insurance premiums and claim denials have risen alongside soaring health care costs, fueling distrust of health insurance companies.
The Alliance of Health Care Sharing Ministries, a trade association representing seven large ministries, said that last year, an estimated 1 million people in the U.S. were members of one of these groups. An analysis from the Colorado Division of Insurance put the total at around 1.5 million. That’s compared to fewer than 200,000 people before 2010.
“They are looking for a faith-based alternative to the broken insurance model,” said Katy Talento, the alliance’s executive director. “They want freedom from being forced to go to certain doctors or facilities.”
Among the key differences between ministry and health insurance plans are that the latter negotiate directly with medical providers, rather than reimbursing members. Most health insurance plans are also required by law to cover various services, including for pre-existing conditions, pregnancy and preventive care, whereas ministries can restrict coverage as they see fit and have no legal obligation to reimburse members.
The ministries operate in broad view of state and federal regulators and got a boost from the Affordable Care Act, which stipulated that people without insurance could avoid fines if they belonged to one of these groups. President-elect Donald Trump’s pick to lead the Centers for Disease Control and Prevention, Dr. Dave Weldon, is a former president of the Alliance of Health Care Sharing Ministries.
One service ministries commonly restrict is maternity care, for which many require a waiting period before a member is eligible to be reimbursed, according to a Government Accountability Office report. An NBC News analysis found that at least eight of the 10 largest ministries have such restrictions.
By contrast, under the Affordable Care Act, most health insurance plans are required to cover pregnancy and childbirth care as essential services, even if a member becomes pregnant before their coverage starts.
NBC News spoke to four families who said they were denied or struggled to get reimbursed by their health care sharing ministry for pregnancy or childbirth-related expenses. All felt they had been deceived and warned other expecting families not to join, saying that the model can be just as bad — if not worse — than the system they opted out of.
Two of the country’s largest health care sharing ministries said their restrictions on maternity coverage are designed to prevent people from joining solely to get reimbursed for pregnancy or childbirth costs then leaving soon after.
“The members and leaders of most ministries have set some limitations on how early in someone’s membership that bills arising from pre-existing conditions or from pregnancy are shareable under their Guidelines. Where such limitations exist, they are designed to best steward the resources of the entire membership,” Talento said.
Flexibility, but with few safeguards
Most health care sharing ministries follow a similar model: People pay a monthly membership fee, which varies by policy but can range from around $85 to $1,300. Members are responsible for an annual “unshareable amount” of their medical bills — somewhat akin to a deductible — before the ministry will chip in.
Members inform their doctor or hospital that they’re “cash pay” patients (which can result in discounted bills), then share copies of bills and proof of payment with their health care ministry.
In addition to lower monthly costs than insurance premiums, the ministries advertise networks with shared religious values that exist outside the mainstream health care system. Some outline faith-based philosophies about caring for others when they fall ill.
Beyond restricting maternity coverage, many groups’ policies state that they won’t reimburse for prescriptions, routine doctor’s visits, contraceptives or mental health or substance use services. Coverage for medical conditions that predate someone’s membership is often excluded, as well. And health care sharing ministries aren’t required by law to limit out-of-pocket costs or maintain large cash reserves to cover members’ bills the way insurance companies are.
At least 30 states have laws that explicitly exempt health care sharing ministries from state insurance rules, too.
“The health care sharing entity has full discretion to determine whether or not they are going to pay the claim, and sometimes it just comes down to whether or not they have the money to pay it,” said JoAnn Volk, co-director of Georgetown University’s Center on Health Insurance Reforms, who studies these organizations. “That cannot happen with insurance.”
The lack of regulation comes with some benefits, however: Ministry members have wide latitude to choose their doctors and can easily enroll at any time of the year. For those who get bills reimbursed in a timely manner, the experience can be largely positive.
Still, some experts and state regulators say many health care sharing ministries promise more than they deliver or take advantage of people seeking affordable coverage, in some cases giving consumers the false impression that they are entitled to reimbursements or are purchasing insurance plans.
“The way they’re marketed and designed, many people buy them thinking they’re insurance and not realizing what the differences are,” Volk said.
As nonprofits, many ministries file publicly accessible finance documents with the Internal Revenue Service. Volk and a colleague analyzed those forms from six ministries and found that their reported spending — usually a combination of reimbursements to members and internal operating expenses — often exceeded revenue.
“This raises questions about the adequacy and stability of funding available to cover members’ health care costs,” the researchers wrote.
‘They had no mercy for us’
Part of Sedera’s appeal to Kaplan was joining a supportive community — something she prioritizes in her everyday life.
She and Sheffield live outside of Asheville, North Carolina, two doors down from Sheffield’s parents. Kaplan teaches yoga on Saturdays and is on a first-name basis with the cashier at her local grocery store.
The couple owns a small painting company, but they determined that it would be too expensive to get a group insurance plan through the business or to purchase an individual plan. Sedera’s $147 monthly fee seemed like the best option.
“I thought I had done all my homework,” Sheffield said.
Now, the couple blames themselves for not noticing the maternity policy — located on Page 44 of Sedera’s 49-page guidelines, which are available for download on its website.
Kaplan said she tried for months to get Sedera to reimburse her delivery costs, which the hospital discounted to around $7,000, without success.
“It was so stressful. I was crying my eyes out. I was bawling. I was pleading with Sedera. I was calling Sedera every day,” Kaplan said. “They had no mercy for us. No grace at all.”
The couple has since paid the delivery bill, along with around $2,800 for Kaplan’s anesthesia, but still owe around $2,500 for a physician’s fee.
Brokers and church groups
Enrollment in health care sharing ministries is not reported or tracked federally, and Colorado is the only state that requires ministries operating there to report such data. The Alliance of Health Care Sharing Ministries sued in May to challenge that requirement, alleging it violates their religious liberty.
To attract new members, some health care sharing ministries pay insurance brokers a higher commission than insurance companies do, according to a report from the Urban Institute, an economic think tank. Other people learn about the groups through church communities.
That was the case for the Pelons, a family of six in Longmont, Colorado, who in 2020 became off-and-on members of Christian Healthcare Ministries — the country’s oldest and largest ministry, founded in 1981.
Dana Pelon said she had a similar experience to Kaplan’s: She had recently rejoined when she found out she was pregnant unexpectedly, but Christian Healthcare Ministries only offers maternity cost-sharing for members who join at least 300 days before their due dates. Pelon was just shy of that cutoff so was told she wasn’t eligible.
“There was no compassion,” she said. “It was just like, ‘Nope, we’ll cover any due date after this day.’ And it was 27 days after my daughter’s due date.’”
Christian Healthcare Ministries said its maternity policy “eliminates the possibility that someone might try to ‘game’ the system by joining shortly before giving birth, having CHM members share funds to pay their medical expenses, and then leave the ministry shortly after the birth,” said Lauren Gajdek, the group’s vice president of communications.
‘Stay far away from it’
Another of the country’s largest health care sharing ministries, Liberty HealthShare, has been a target of member complaints and a lawsuit in recent years.
Warren Walborn said he learned about Liberty from friends when he and his wife, Liezel Ann, were “looking for alternatives to not get killed on the premiums as insurance costs were going through the roof.”
The average family premium for employer-sponsored health insurance has increased 24% since 2019, according to KFF, a nonprofit health think tank.
Walborn said he was never reimbursed for his wife’s prenatal care or the delivery of their daughter Sophie in 2021.
Walborn said he submitted invoices within 180 days of medical service dates, per Liberty’s policy, but the company then requested itemized charges and additional documentation. That back-and-forth continued, he said, until the 180-day mark passed, after which point Liberty told him he was no longer eligible for reimbursement because of the time limit.
“I kept fastidious records of all of these codes and everything. It was never good enough for them,” he said. “It was like … if I had hair, I would pull it all out.”
“I said to myself, ‘You know, why am I sending them money every month?’” Walborn added. “‘They’re not going to ever send me anything.’”
Kallie Seiter, a mother of five from Ogden, Utah, was also a member of Liberty during her pregnancy in 2019. She sent Liberty an estimate for the delivery cost at her chosen birth center ahead of time — around $5,000 — and a representative assured her in writing that it would be covered in full, according to emails reviewed by NBC News.
But that was incorrect, as Seiter’s annual “unshareable amount” reset two months before her baby was born. Liberty later declined to reimburse the full sum for that reason.
After a year-and-a-half dispute, Seiter succeeded in recouping her $5,000. But she left Liberty for good.
“If someone were to ask me if I recommend Liberty for pregnancy, I would definitely tell them to stay far away from it,” she said.
In response to an inquiry about Seiter’s and Walborn’s cases, Liberty said it is transparent about its guidelines, which members agree to when they sign up.
“We regret that the processing of these members’ bills was delayed, but in an organization that receives hundreds of thousands of bills annually, processing errors may occur despite our best efforts,” said Timothy Bryan, the group’s vice president of marketing and communications.
“We note these situations occurred over five years ago and Liberty has significantly improved its processes over this time period,” he added.
Liberty agreed to a settlement with the Ohio attorney general in 2021 that required it to replace its top leadership, but it did not admit wrongdoing. A group of former Liberty members also sued the ministry that year, alleging that the organization had refused to pay covered medical procedures while reaping “massive profits.” Liberty said in court filings that the Ohio settlement has remedied those plaintiffs’ claims. The suit is ongoing.
Warnings and pushback
Weldon, Trump’s pick to lead the CDC, has praised health care sharing ministries for giving consumers more options and flexibility. But he told NBC News that while president of the Alliance of Health Care Sharing Ministries, he worried that bad actors could cast a negative light on the model.
“I tried to promote getting all of those ministries together to develop rigorous self-policing standards,” he said, adding: “They all sort of marched to their own drummer, and I repeatedly reminded them that if they didn’t really clean their act up, that they were going to be regulated by 50 different [state] governments.”
Indeed, some state officials and other groups have tried to limit the ministries’ reach.
The American Hospital Association sent a warning about the ministries to the Consumer Financial Protection Bureau last year. More than a dozen state insurance departments have issued consumer alerts about the ministries. And over the last five years, some state regulators and attorneys general have taken a range of legal actions against a few health care sharing ministries, accusing them of misrepresenting their plans.
On the federal level, Rep. Jared Huffman, D-Calif., reintroduced a bill last year that would require health care sharing ministries to submit annual financial disclosures to the IRS and other regulators, but the bill has stalled in committee.
Trump’s last presidential administration was somewhat friendly to health care sharing ministries. Talento worked for the White House during that term, and as president, Trump issued an executive order calling on the treasury secretary to consider making payments to health care sharing ministries tax deductible. The Treasury Department proposed such a change, but it was never finalized.
Volk said the effort could be revived under the new administration. She also worries that more people might enroll in ministries after a tax credit for certain insurance premiums expires as expected next year.
Families who have left the ministries hope their stories will dissuade others from joining. Kaplan and Sheffield said the bills they had to pay without reimbursement from Sedera have made them question whether to have a second child. The couple remains uninsured.
“We want to have another one, but not the way we did it, not how it happened,” Kaplan said.
“Shouldn’t we want to have a family?” she added. “The system makes it so difficult.”
This article was produced in collaboration with the USC Annenberg Center for Health Journalism’s 2024 National Fellowship Fund for Reporting on Child Well-being.
