- The Washington Times - Monday, August 13, 2012

In a state-level version of the Obama administration’s clash with U.S. Catholic bishops over health care reform and religious liberty, a Christian health care ministry finds itself battling Kentucky insurance regulators over the right to help its members meet their medical bills.

More than a year after the Kentucky Supreme Court ruled that Medi-Share, a Florida-based ministry operated by the American Evangelistic Association and the Christian Share Ministry, qualifies as an insurance company, a judge will consider holding the organization in contempt of court for continuing to operate in the state without an insurance license.

Medi-Share officials say they are not an insurance company, but rather a religious organization that facilitates payment of medical bills among members. In the latest stage of a 10-year legal battle in the state, a Kentucky circuit court judge has set a contempt-of-court hearing for Aug. 30 to hear claims brought by the Kentucky Department of Insurance against the Florida-based group.

“Our reason for believing Christian Care Ministry’s Medi-Share program should be regulated by the state is simple,” Kentucky Department of Insurance spokeswoman Ronda Sloan wrote in an email. “The Kentucky Supreme Court ruled that Medi-Share is insurance and does not qualify for an exemption from regulation under the Kentucky Insurance Code. Therefore, the entity should be subject to the same regulation as other health insurance companies.”

Medi-Share, which has nearly 40,000 members in 49 states, allows members to donate a predetermined amount into an account. If they get hurt or sick, they can choose from a list of pre-approved health care providers, who then bill Medi-Share directly. The organization takes funds from other members’ accounts to pay the bill. The nonprofit describes this as the “biblical model of sharing and paying each other’s medical bills,” and members must pledge to engage in a “healthy, biblical lifestyle” free of drugs, alcohol and tobacco, among other restrictions.

Members of Medi-Share are exempt from the individual mandate of Mr. Obama’s Affordable Care Act, which requires every person to purchase health insurance or face a penalty. The law defines a health care sharing ministry as a group that shares resources to pay for one another’s medical expenses in accordance with a common set of ethical or religious beliefs.

John McDonough, director of the Center for Public Health Leadership at the Harvard School of Public Health who consulted with a lobbyist for Medi-Share during the drafting of the Affordable Care Act, said the number of health care sharing ministries in the country is very small, although he did not have an exact number. Others include Illinois-based Samaritan Ministries and Christian Health Care Ministries based in Ohio.

“Whether or not it legally qualifies as insurance, that there are people who, in good faith, are using it as such” qualifies it as an insurance replacement under federal law, Mr. McDonough said.

The Associated Press reported last week that conservatives and Christian groups in Kentucky are closely watching the legal battle.

“The more they look at this issue, the clearer it will become to Kentucky’s 2 million active Christians that their rights to save money on one of their biggest bills is being unconstitutionally inhibited by their state government,” tea party activist David Adams told the AP.

Medi-Share says it has changed its operations significantly since the case was first brought in Kentucky in 2002. At the Aug. 30 hearing, it will ask a neutral third party to hear its case.

“We are confident that the Medi-Share program, as it is being conducted today, is in full compliance with the state’s statutes and regulations,” Tony Meggs, president and CEO of Medi-Share parent company Christian Care Ministry, said in a statement.

The nationwide organization says it does not offer insurance because it does not collect a premium for its service, but simply moves funds between accounts. Even if it were considered insurance, it claims it should be exempt from regulation as a religious provider.

But the state’s Supreme Court decision found similarities between Medi-Share and a standard insurance company, including an application to join and a fee that Medi-Share collects to cover administrative costs. Ultimately, the court ruled, the organization assumes members’ “risk,” or responsibility to pay the medical bills, which qualifies it as an insurance company under state law.

In order for the religious exemption to apply, the organization must simply transfer funds from one account to another. In the court’s eyes, Medi-Share pools funds together and retains a small fee, and so is not exempt, state regulators argue.