Without access to employer-sponsored insurance or federal subsidies for a marketplace plan, Jeff King, a 63-year-old evangelical pastor, turned to a non-insurance "medical cost-sharing" plan. However, the plan's coverage had limitations on pre-existing conditions, which ultimately left King with a $160,000 medical bill after a necessary procedure, Bram Sable-Smith writes in NPR's "Shots."

How a 'medical cost-sharing' plan led to a $160K bill

According to Sable-Smith, Jeff and his wife Kareen went through a wide variety of health coverage options through the years. For the most part, Jeff's work rarely provided him or his family with insurance, aside from a brief stint leading a congregation between 2015 and 2018.

At one point, the Kings purchased insurance through the Affordable Care Act marketplace, but they later dropped the plan because they were not eligible for subsidies and felt like they couldn't afford the cost.

"Without employer-sponsored insurance or federal subsidies to help fund their coverage, the Kings felt priced out of traditional insurance," Sable-Smith writes.

Eventually, the Kings joined a "medical cost-sharing" plan through Sedera, a company that describes its service as a "refreshing non-insurance approach to managing large and unexpected health care costs." Under the plans, which are often faith-based, members agree to share one another's medical expenses.

In recent years, these plans have grown in popularity since they can be less expensive than traditional insurance. However, they offer fewer protections than traditional insurance and come with certain provisions before coverage is provided.

For example, the Kings' plan did not cover pre-existing conditions for the first two years of the plan. According to Sable-Smith, the Kings knew this pre-existing condition clause was a "gamble" since Jeff had heart condition, but they decided to take the risk since he had managed it for years with medication alone.

However, Jeff's doctor later told him he needed an ablation to restore his heart rhythm to normal and that it was better to get the procedure done sooner rather than later. Although Jeff had requested a cost estimate from Stormont Vail Health, the hospital where he was having the ablation done, he did not hear back before his surgery in January 2021.

Because the surgery occurred before Sedera's two-year waiting period for pre-existing conditions was over, the Kings became responsible for the full cost of the procedure—$160,000.

"I never expected this to not cost me anything," Jeff said, "but I wasn't expecting what it turned out to be either."

'Impossible financial straits'

Because Jeff was uninsured at the time, his main recourse for the high bill was to go through Stormont Vail's financial assistance.

According to Bill Lane, an administrator at Stormont Vail, the hospital provides financial assistance and offers payment plans with zero interest to patients with large bills. Some patients may also be eligible for a "catastrophic discount" program that caps their bill at 30% of their gross household income.

Ultimately, Stormont Vail's financial assistance program reduced Jeff's original bill by $107,000. Sedera also provided the Kings with a negotiator to help them further reduce the cost and gave them $15,000 to help with the bill. In the end, Jeff's final balance was reduced to $37,859.34 in November 2021.

According to the Kings, the hospital told them it would accept no less than $500 per month on its payment plan, the equivalent of an additional mortgage payment for the family. To pay off Jeff's bill, the Kings sold their home and bought a smaller house and leveraged their life insurance policy. Both Jeff and Kareen have also taken on part-time work to supplement their income.

Currently, the Kings have health insurance through a marketplace plan and say they feel "pretty fortunate" to be where they are. However, Jeff noted that it will likely take them more than six years to completely pay off his medical debt.

"It's just so tragic the way our system is," Jeff said. "It puts so many people into impossible financial straits." (Sable-Smith, "Shots," NPR, 1/9)