04/09/2008

By CLAY BARBOUR  / Associated Press

Wendy Sweet rarely visits the doctor. But last October, after BlueCross BlueShield increased her family's monthly health insurance premium to $1,150, she sure felt like she needed one.

The Charlotte Observer reported that Sweet, 46, owns South Street Mortgage. As a small business owner, she has no one to help offset her health care costs.

So Sweet joined a small but growing number of people enrolled in faith-based alternatives to health insurance.

The Sweets are new members of Christian Care Medi-Share, a charitable ministry that collects monthly contributions and disburses them among members to pay medical bills. For $459 a month, the family receives help on costs greater than $250, up to $1 million.

"We feel like this protects us in case of catastrophic events," the Charlotte mother of three said. "We can cover the other stuff with the money we save."

In a decade in which premiums have nearly doubled nationwide and the number of uninsured has grown from 38million to 47 million, many people are searching for help.

But critics are wary of such organizations because they operate with little government oversight and don't guarantee coverage. In 2001, Bruce Hawthorn, founder of the organization that became Christian Healthcare Ministries, was accused of diverting millions of dollars for personal use.

For at least 450 people in the Charlotte region, though, faith-based charities are the only things standing between them and their doctor bills.

Sweet said she earns $150,000 to $200,000 a year. But her husband is a stay-at-home father and she said an insurance bill of more than $13,000 a year is tough to absorb.

Sweet recently took her 6-year-old daughter, Emma, to the dermatologist. Emma was diagnosed with ringworm, an infection common in small children.

The visit resulted in a $110 bill and prescriptions totaling another $111. If Sweet were insured, she would have likely paid a $20 copay for the visit, and probably half of the total cost of Emma's medicine.

But as members of Medi-Share, the Sweets had to pay out of pocket for both.

That is typical for faithcares. Most offer high-deductible, low-cost help. Members pay out of pocket for basic doctor visits, dental care, vision and prescriptions.

It also means that the programs may not work well for people suffering from chronic illnesses, such as cancer and heart disease. Those problems can easily exceed the caps.

Medi-Share is the largest of three major faithcare organizations operating in the country. Along with Samaritan Ministries and Christian Healthcare Ministries, the organizations serve about 120,000 people from California to the Carolinas.

All three operate on the same basic principles. Members must be Christian. They must attend church regularly, be nonsmokers, drink only in moderation and abstain from sex outside of marriage.

Depending on which faithcare and which program, members can receive up to $1 million in help.

But ministry officials stress they are not insurance.

"What we are is a ministry," said the Rev. Howard Russell, president of Christian Healthcare Ministries. "What we are doing is not new. It's 2,000 years old. It's Christians helping Christians."

Pam Silberman, president of the North Carolina Institute of Medicine, said that more employers are dropping health insurance, leaving many people unable to afford policies.

In 2006, about 6 3percent of people had employer-based insurance, down from 68 percent in 2000.

The average family premium, according to the Kaiser Family Foundation, has grown from $6,438 in 2000 to $12,106 in 2007. The median household income in North Carolina is about $41,000.

For most families, employers offset health costs. In 2007, the average family was responsible for only about $3,281 of the total insurance premium.

But for families not helped by employers, for small businesses and many independent contractors, insurance can cost more than a third of their total salary.

Peggy and Ladd Beach of Concord run a small company that cleans foreclosed homes. They make about $40,000 a year.

They are members of Samaritan Ministries. For $285 a month, they are eligible for help.

While the family pays out of pocket for needs less than $300, they can share needs between $300 and $100,000 for each member of the family.

This was put to the test in 2001 when Ladd Beach broke his finger coaching a soccer game. He ended up in the emergency room. Samaritan paid the family's $1,000 bill.

"It's not insurance, but it is assurance," she said.

Christian Healthcare dealt with scrutiny from regulators in about three dozen states for the first 10 years of its existence.

More recently, Medi-Share has come under fire, including in Kentucky and Oklahoma.

The scrutiny arose because faithcares do not guarantee service. They rely on members to send in money. If members don't, there is nothing to share.

Samaritan has faced shortfalls about two dozen times since 1994. In those cases, the company prorated shares, paying 80 percent to 95 percent of each member's medical bills.

Officials with Christian Healthcare and Medi-Share said the two programs have shared nearly $800 million in their histories and officials say they have yet to wrestle with shortfalls.

But as religious nonprofits, faithcares operate with little government oversight. They're treated as charities. Critics say this leads to problems.

A lawsuit by the Ohio attorney general and an IRS investigation forced out Hawthorn, the Christian Healthcare founder accused in 2001. The charity was required to pay back $24 million in unpaid claims.

In 2007 Medi-Share lost a lawsuit filed by a member who accused the charity of failing to pay for his heart surgery.

Officials with the N.C. Department of Insurance have investigated all three ministries and determined they are not insurance companies. As such, the commission does not regulate them.

"As long as people understand the risk they are taking, then it is their prerogative," said Kristin Milam, a department spokeswoman.

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Information from: The Charlotte Observer, http://www.charlotte.com