Health care is complicated enough without deceptive products muddying the waters. Yet across Arkansas and the nation, countless families are being misled into buying what looks like health insurance but isn’t. These products are sold with comforting language such as “affordable coverage,” “nationwide access,” “first-dollar benefits,” or “any doctor, any hospital,” but when it matters most, the fine print reveals there’s no real protection at all. These products are there for you, when you need to pay the bill; but disappear on you when it’s time for them to pay the bill.
These imitation “plans” take many forms: health care sharing ministries, fixed indemnity or “supplemental” plans, medical discount cards, and short-term limited-duration plans. They are often sold online, at church, over the phone, or even through local agents who may not fully understand what they are selling. Each product type has a different structure, but they share a common goal: to appear like legitimate insurance while avoiding the consumer protections that come with it.
1. The Trap of “Health Care Sharing Ministries” and Cost-Sharing “Plans”
Health care sharing ministries and cost-sharing programs often promote themselves as “faith-based” or “community-based” alternatives to health insurance. They may promise to “share” medical expenses among members, but legally, they are not insurance. They are not required to follow any of the rules that apply to real insurers, and they are not regulated by the Arkansas Insurance Department or the federal government.
On paper, these plans sound compassionate and trustworthy. In practice, they are very risky. While they may cover small or routine claims, members always run into major problems when serious illness strikes, especially with cancer care, heart disease, or hospitalization. Providers across Arkansas have learned the hard way that these “plans” do not ever pay reliably. Many have now refused to accept them altogether or have carved them out of their accepted networks (even if the network continues to fraudulently continue listing the provider as participating).
Some cost-sharing programs “ride” on larger national networks to give the illusion of legitimacy. They may advertise that you will have access to a familiar insurance network, but when your claims are denied or ignored, there is no authority that can make them pay. There is no appeals process, no state regulator to file a complaint with, and no financial solvency requirements to protect your family when something catastrophic happens.
A few well-known examples of these programs include: Medi-Share, Christian Healthcare Ministries (CHM), ZION HealthShare, Samaritan Ministries, Sedera, Impact Health Sharing, OneShare Health, Altrua HealthShare, and Liberty HealthShare. They are all structured around “voluntary sharing,” not binding insurance coverage. Once you look past the marketing, their materials often include a quiet disclaimer stating that “payment of any claim is not guaranteed” or “not insurance.”
These small disclosure sentences can be the difference between life and bankruptcy.
2. “Supplement Plans” Masquerading as Full Coverage
Another common trap involves supplemental or fixed indemnity plans that use marketing phrases such as “Any Doctor, Any Hospital” and “In-Network Benefits Nationwide.” Many of these plans list large, recognizable networks in their brochures, sometimes even major insurers’ networks, to make themselves appear equivalent to comprehensive coverage.
But they are not. Pay close attention.
These plans are not major medical insurance. They do not meet federal or state standards for group, individual, or employer coverage. Instead, they pay a fixed amount for a given event, for example, $25 for an office visit or $100 per hospital admission, regardless of your actual bill. They may tout “first-dollar coverage,” but that only means you receive a small check while still being responsible for thousands in medical bills.
Consumers often discover the truth too late: providers do not bill these plans. You must pay out of pocket and then try to submit claims yourself for reimbursement. Even though the plan’s materials mention a national network, that is often just a marketing partnership, not an actual network acceptance agreement.
These plans are designed to look like insurance, complete with membership cards, claim forms, and provider directories, but they are not required to cover essential health benefits or comply with state solvency, rate, or claims-handling standards.
3. The Illusion of “Medical Discount Cards”
Medical discount cards sound simple: show the card, get a discount. But these cards are not insurance and carry no payment responsibility from any company. They merely provide a negotiated discount, if the provider chooses to honor it.
Sometimes these discount cards are “bundled” with cost-sharing or supplemental products to create a false sense of legitimacy. They may display big-name logos or reference national pharmacy networks to appear more official. But a discount card is just that, a coupon, not coverage.
If your provider does not accept it, there is no recourse.
4. Short-Term Plans: The “Gotcha” Insurance
Short-term health plans are another dangerous product often marketed to consumers who need temporary coverage or cannot afford ACA plans. These policies may cover you for several months, but they do not cover essential health benefits such as maternity care, mental health, or prescription drugs.
They also commonly exclude pre-existing conditions and require burdensome proof that a condition did not exist before your coverage began. Many Arkansans have discovered, only after serious illness, that their plan refused to pay because of some obscure exclusion or delay tactic.
What Consumers Should Ask Before They Buy Any “Health Plan”
To protect yourself and your family, ask these six critical questions before signing up for any coverage:
- Does the plan cover essential health benefits?
- Are any benefits excluded because of pre-existing conditions or extra paperwork I must complete?
- Which government agency regulates this plan?
- Is this plan using a rented network? If so, are the local hospitals and specialists actually accepting it?
- Can I truly see any doctor, or is that just marketing? What are the cost implications of seeing any doctor?
- Trust but verify: Ask your doctors and community hospitals directly – do they accept the plan/product you are planning on purchasing.
If an agent or brochure cannot answer those questions clearly, walk away.
What Regulators Should Do Next
Arkansas has long led the way in protecting patients from deceptive middlemen and bad actors in healthcare. It is time for the same focus to be applied to these imitation “insurance” products.
Patients First PAC calls on state and federal regulators to:
- Enforce strict disclosure rules. Require agents and brokers to clearly label and disclose whether a product is regulated insurance and penalize those who misrepresent it. Require and hold agents and brokers accountable for network adequacy & provider participation marketing published by the “plan.” (in the unfortunate event that the consumer finds out that what was marketed to them does not reflect reality).
- Mandate large, visible warnings. Every application and website should state at the top, in plain language, in large font, whether the product is not regulated insurance and that no government agency can enforce payment or protect the consumer.
- Strengthen the Unfair and Deceptive Practices Act. Consumers should have a private right of action to sue both the plan and the seller when deception occurs.
- Regulate Network Contracting Companies. These “plans” use middle-men “network contracting companies” and rent their network to avoid accountability. The Arkansas Insurance Department should have direct oversight of every entity involved in design and marketing of insurance products or look-alike products (regardless of what these entities call themselves).
Bottom Line
If it looks like insurance, sounds like insurance, and is sold like insurance, that does not mean it is insurance.
Until stronger protections are in place, consumers must stay vigilant. Read the fine print, ask the right questions, and remember: if the promises sound too good to be true, they probably are.
When consumers are wronged, they should promptly notify their elected representatives, so that the tricks and misdirection can be addressed with additional regulation and protection, to ensure future generations aren’t harmed.