Church Health Insurance: Effective in the Amish Community

The Amish community is exempt from the health insurance mandate that is now federal law. Members of this community rely on each other for taking care of their health, rather than relying on insurance companies. It’s an interesting approach to healthcare, and it is effective for communities where people rarely leave or enter.

I visited Lancaster County this weekend and spent some time on a touristy, but respectful, tour of one of the local Amish communities.

Amish children don’t receive education beyond the eighth grade, and as a result, there are no doctors or lawyers within the community. In some respects, they do rely on outsiders despite being as self-sufficient a community as possible with that level of education. “English” — that is, non-Amish — doctors cater to the Amish community, and when a member of the community visits the doctor’s office or a hospital, they pay for these services in cash.

Once a young Amish adult decides to officially join the community, he or she begins paying a fee to the church. From what I understand from the tours I’ve participated in, this fee could be $100 per month. The fee does is not for the benefit of the church or its leaders; these payments are collected and resolve to care for members of the community in personal times of need. When a member of the community needs to cover health expenses, he or she is responsible for the first $2,000 of expenses — similar to a deductible in a traditional health insurance plan — but beyond that amount, the church will cover the remainder of the cost.

Religious grounds helped the Amish community win exemption from the law that will require all citizens to have a private or state-based plan from a regulated insurance company. Amish, who don’t collect Social Security payments or other forms of government assistance, are also exempt from Social Security taxes, after winning one court battle. A recent appeal seems to indicate that this exemption would apply only to self-employed Amish community members, but many individuals in the community are self-employed.

The concept of church-based health insurance may not be as effective in other communities. The reason this works well with Amish churches is that the member families have little migration. The same families have been part of the same congregations for generations. Although Amish community members can ride in cars, they don’t drive. Transportation is mostly by horse-and-buggy and scooter. This keeps the communities tightly-knit. Without much change of membership in each congregation and with a community where everyone is known, communities don’t need to worry about people taking advantage of the system.

Beyond the Amish community, where there is more geographical mobility, insurance coverage based on local churches may not be practical. Putting aside the idea that receiving exemption from the health insurance mandate is difficult, even on religious grounds, it might be hard for churches to collect this kind of payment when members believe they may not remain members long enough to benefit. Commercial health insurance is different as the pools are much wider, and can extend benefits to a new member even if he or she has not yet paid a premium (although companies often try to avoid this situation by charging higher premiums or denying coverage for people with pre-existing conditions).

Would you prefer a church or community based approach to health insurance?