California sues Christian "health care sharing ministry" for preying on consumers

The state's attorney general called The Aliera Companies a "sham."

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California has filed a civil rights lawsuit against the Christian “health insurance” company Aliera, claiming they “preyed on consumers who, in many cases, thought their monthly payments were being used to help others who shared their faith and religious beliefs.” And it’s not the first time this company has been accused of the same thing.

Christian “health insurance” scams

If you’re not familiar with this particular grift, Christian “health insurance” companies are plans that only the most devout believers can buy into. Just like Christian films and faith-based theme parks, however, they’re so much worse than the original.

Here’s how these companies work. Groups like Samaritan Ministries and Liberty HealthShare ask everyone in the system to pay a specific amount into the insurance pool every month… but the companies don’t collect the cash or send it to health care providers like regular insurers. For a fee, these companies simply tell individuals where to send their money (e.g. Bob from Nebraska) and how much to send. If you need something covered yourself, you make a request and the company will send your name to others in the pool.

That’s not entirely different from regular insurance, at least in theory, but there are some major problems with the system. There’s no oversight or regulations, not all services are covered (like mental health care), your pre-existing conditions may be a dealbreaker, there’s a cap on how much you can receive even if your medical bills exceed them, and the providers can cut you off at anytime if you become too expensive to insure. Even worse: If you do something they deem “immoral,” you won’t get any money at all. (Good luck getting contraception. And you sure as hell won’t be able to cover your same-sex partner.) Basically, everything is fine… until the moment you need them the most.

There have been numerous articles written over the years about customers who were denied help precisely when they expected to receive it.

In 2020, the New York Times‘ Reed Abelson wrote about how some of those Christian groups were so awful that some states were taking legal action to prevent them from offering garbage plans to residents.

… state regulators in New Hampshire, Colorado and Texas are beginning to question some of the ministries’ aggressive marketing tactics, often using call centers, and said in some cases people who joined them were misled or did not understand how little coverage they would receive if they or a family member had a catastrophic illness.

The article noted that Washington fined Trinity Healthshare and banned it in the state. Even Texas — Texas! — sued Aliera Healthcare, which promoted Trinity’s products. And then, in late 2020, the state of New York said that Trinity Healthshare and Aliera (which markets the plans) broke the law by offering pseudo-insurance to 40,000 residents over the past four years.

New York regulators said patients were often left with thousands of dollars in unpaid medical bills. A woman with leukemia was denied coverage for an emergency hospital stay that cost thousands of dollars because she was told she had a pre-existing condition. Aliera denied a $15,000 claim for breast cancer treatment, according to regulators, while another patient said even routine doctor’s visits were not covered by Trinity.

…

The state said it would seek civil penalties and other relief on behalf of consumers, and had issued a cease-and-desist letter in April that prevented the group from enrolling new customers.

The companies’ defense was laughable: They said they’re not providing health insurance at all… therefore it can’t be fraud. They also insisted that, since customers have to sign a contract that says it’s not health insurance, everything is on the up and up.

But obviously the customers didn’t really understand that. They thought they were getting health insurance from a company that proudly proclaimed conservative Christian values. Why might they think that? Probably because the companies strongly imply they’re health insurance companies. Just look at what the New York complaint said:

Respondents aggressively advertise in the national and New York insurance marketplaces that these products are “affordable alternatives for health care” that provide comprehensive coverage, targeting consumers who are uninsured. Every aspect of Respondents’ marketing, notwithstanding their false disclaimers, leads consumers to believe that they have purchased legitimate, comprehensive health insurance coverage.

…

Members are issued membership cards, and Trinity maintains a network of providers and provides a search function on its website for participating providers for consumers to search.

Except like so many Christian churches, these programs were nothing more than a bait-and-switch. They lured you in before they they told you the whole truth.

This isn’t insurance. This was never insurance. This was gambling. Christians put money into the system with no guarantee that anything would come out on the other side.

In July of 2021, Trinity Healthshare filed for bankruptcy. The move allowed them to drop all enrolled members and escape the obligation to pay out the outstanding claims. New York officials said the bankruptcy filing was a strategic move to avoid consequences and said “Aliera and Trinity are using Trinity’s bankruptcy filing as a shield against being held responsible for violating the law and paying medical reimbursements owed to consumers.”

The California lawsuit

Last week, California’s Attorney General Rob Bonta filed a civil lawsuit against Aliera and the Moses family that founded Trinity Healthshare (now known as Sharity Ministries… which seems appropriate since it’s a sham charity).

Aliera, a for-profit corporation, created, operated, and sold unauthorized health plans and insurance through Sharity/Trinity, collecting hundreds of millions of dollars in monthly premiums from thousands of Californians and others throughout the country. However, rather than paying its members’ healthcare costs, the company declined claims and retained nearly 84% of its members’ contributions — leaving many crushed by the burden of impossible medical debt.  

“Aliera preyed on consumers who, in many cases, thought their monthly payments were being used to help others who shared their faith and religious beliefs. Instead, Aliera and the Moses family funneled its members’ payments into their own pockets,” said Attorney Rob General Bonta. “When members suffered medical emergencies, their problems were compounded by Aliera claiming it had no obligation to pay medical costs. Aliera’s sham business is unlawful and our lawsuit seeks to ensure they are held to account to pay the price for the Californians they lured in and cheated.”

The complaint alleges that Aliera violated state law by lying about their business. They led consumers to think their plans helped pay for members’ healthcare costs and were an acceptable substitute to traditional government-run plans backed by the Affordable Care Act. Those were lies. For example, the ACA requires insurers to spend at least 80% of premiums on health care; Sharity spent about 16% on health care and pocketed the rest.

Among other things, the lawsuit calls for the companies to be banned from making false statements about their offerings, a repayment of any costs obtained through fraudulent means, a fine of $2,500 per violation of the law (which could add up to a hell of a lot if we’re talking about each customer), and any other penalties and legal costs associated with the case.

Whether this complaint will work, I don’t know, but it absolutely should. There’s no reason, legally or ethically, that a faith-based company should be allowed to function like Trump University.

There are plenty of problems with the insurance industry. It doesn’t help that Republicans have chosen to undermine many of the consumer protections that were written into the Affordable Care Act. But Christian insurance companies manage to magnify those problems with a religious twist. Their victims are very likely the kind of people who were duped into thinking the ACA (as intended) was bad for them and contained “death panels,” and people who continue to rail against the idea of a public option or “socialized medicine.”

Their ignorance is hurting them, Christian business owners are taking advantage of it, and it’ll be up to Democratic officials and the justice system to fix the problems.

(Image via Shutterstock. Large portions of this article were published earlier)