A health care sharing ministry (HCSM) is a nonprofit organization whose members pool money each month to pay for each other’s medical bills. Members share a common set of religious or ethical beliefs, and the arrangement operates as an alternative to traditional health insurance. The key distinction: these ministries are not insurance companies, they are not regulated like insurers, and they do not guarantee that your medical bills will be paid.
HCSMs have grown significantly in popularity over the past decade, partly because they tend to cost less per month than standard health insurance premiums. But the tradeoffs are substantial, and understanding exactly how these organizations work is essential before joining one.
How Health Care Sharing Ministries Work
Each month, members contribute a set amount, often called a “share,” into the ministry. The organization then uses those pooled funds to cover qualifying medical expenses submitted by other members. Some ministries match paying members directly with those who need funds, while others pool all contributions and administer payments centrally. Either way, the money flows from member to member rather than from an insurance company’s reserves.
Because HCSM members are not considered “insured,” they typically interact with doctors and hospitals as self-pay patients. This has a practical upside: under the No Surprises Act, healthcare providers must give self-pay patients a good faith estimate of expected charges before scheduled care. These estimates reflect the cash-pay rate, including any discounts the provider would normally offer uninsured individuals. If the final bill comes in substantially higher than the estimate, you can dispute it through a federal resolution process. Many HCSM members also negotiate directly with providers for lower rates, since hospitals and clinics frequently offer cash-pay discounts.
Legal Requirements for Recognition
Not just any organization can call itself a health care sharing ministry. Federal tax law (26 USC § 5000A) sets five specific criteria. The organization must be a tax-exempt nonprofit under section 501(c)(3). Its members must share a common set of ethical or religious beliefs and share medical expenses in accordance with those beliefs, regardless of which state they live in. Members must be allowed to retain membership even after developing a medical condition. The organization (or its predecessor) must have been in continuous existence since at least December 31, 1999, with uninterrupted expense sharing since that date. And it must undergo an annual audit by an independent certified public accounting firm, with results available to the public on request.
That 1999 requirement is notable. It effectively prevents new organizations from entering the space under this specific legal designation, though some newer groups have tried to operate under related models.
Membership Requirements
Joining a health care sharing ministry typically involves more than filling out an application. Most ministries require members to affirm a statement of faith or agree to a set of ethical principles. Common requirements include regular church attendance, abstaining from tobacco and excessive alcohol use, and living according to the ministry’s moral guidelines. Some ministries require a pastor’s reference or verification of active church membership.
These lifestyle requirements also shape what the ministry will and won’t share. Medical expenses resulting from behaviors that violate the ministry’s guidelines, such as injuries sustained while intoxicated or conditions related to drug use, are generally excluded from sharing.
What HCSMs Typically Don’t Cover
This is where the gap between health insurance and a sharing ministry becomes most apparent. ACA-compliant health insurance plans cannot deny coverage or charge more for pre-existing conditions. They must cover preventive care, maternity, mental health services, and prescription drugs as essential health benefits.
Health care sharing ministries operate under no such requirements. Pre-existing conditions are commonly excluded or subject to lengthy waiting periods, sometimes one to three years, before expenses related to those conditions become eligible for sharing. Preventive care like annual physicals, vaccinations, and screenings may not be shareable expenses. Mental health treatment, substance abuse treatment, and maternity care (particularly for unmarried members) are frequently excluded or limited. Each ministry sets its own rules about what qualifies.
While federal law does require that members can retain membership after developing a medical condition, retaining membership is not the same as having your new medical expenses shared. The ministry can keep you as a member while still limiting or excluding sharing for that condition.
Cost Differences From Insurance
Monthly shares at HCSMs generally run lower than unsubsidized health insurance premiums, which is a major draw. However, the comparison gets more complicated when subsidies enter the picture. Under the ACA, premium tax credits reduce what you actually pay for marketplace plans based on your income. In 2025, individuals earning up to 150% of the federal poverty level pay nothing toward a benchmark Silver plan premium. Even at 400% of the poverty level, contributions are capped at 8.5% of household income.
For someone who qualifies for substantial subsidies, an ACA marketplace plan may actually cost less per month than a sharing ministry, while providing guaranteed coverage and consumer protections. The cost advantage of HCSMs is most pronounced for higher-income individuals and families who don’t qualify for significant subsidies and are facing full-price premiums.
No Guarantee of Payment
The single most important thing to understand about health care sharing ministries is that they do not guarantee payment of your medical bills. Every legitimate HCSM makes this explicit in its membership materials. If the ministry runs low on funds, or if your expense doesn’t meet the sharing guidelines, you are responsible for the full cost of your care.
Unlike insurance companies, HCSMs are not required to meet financial solvency standards or maintain reserves sufficient to cover claims. There is no state guaranty fund backing them. If an insurer goes bankrupt, state guaranty associations typically step in to cover outstanding claims. If a sharing ministry becomes insolvent, members have no such safety net.
Regulatory Gaps
Because HCSMs are not classified as insurance, they fall outside the reach of federal and state insurance regulations. This means they are exempt from all the consumer protections that apply to health insurance: guaranteed coverage of essential benefits, limits on out-of-pocket costs, prohibitions on annual and lifetime caps, network adequacy requirements, and appeals processes for denied claims.
Most states have “safe harbor” laws that explicitly exempt qualifying HCSMs from insurance regulation. Even in states that do take some regulatory action, oversight tends to be minimal. Georgetown University’s Center on Health Insurance Reforms has noted that at a minimum, states with safe harbor laws could require HCSMs to demonstrate compliance with those exemption rules, but few do so consistently. The result is that consumers have limited recourse if a ministry fails to share their expenses as expected.
The Individual Mandate and Tax Implications
When the ACA’s individual mandate was actively enforced, HCSM membership qualified as an exemption from the penalty for not having health insurance. Since 2019, the federal penalty for lacking coverage has been reduced to zero, so this exemption is no longer practically relevant at the federal level.
However, several states have their own individual mandates with penalties still in effect. If you live in one of those states, HCSM membership may or may not satisfy the state requirement depending on local rules. Checking your state’s specific laws before relying on HCSM membership to avoid a state-level penalty is worth the effort.
Who HCSMs Work Best For
Health care sharing ministries tend to appeal to people who are generally healthy, share the ministry’s faith commitments, and want lower monthly costs than unsubsidized insurance. They can work well for individuals and families who have limited medical needs, are comfortable with the financial risk of uncovered expenses, and whose beliefs align naturally with the ministry’s guidelines.
They are a riskier choice for anyone with chronic conditions, who takes regular medications, who might need mental health care, or who is planning a pregnancy. The lack of guaranteed coverage means a serious diagnosis could leave you facing six- or seven-figure medical bills with no obligation from the ministry to help. For people in that situation, the protections built into ACA-compliant insurance plans carry significant value that lower monthly costs alone cannot replace.