Bram Sable Smith/KHN
Karen King calls it “the ultimate irony”: the hospital that saved her husband Jeff’s heart also broke hers.
What happened Jeff King, of Lawrence, needed to restore his heart rhythm to normal with a procedure called an ablation — sooner rather than later, his doctor said. Jeff asked the hospital for an estimate of the cost, but said he received no response ahead of the surgery scheduled for January 2021 at Stormont Vail Health in Topeka, Kan.
The real pain came when the bill arrived in the mail a few weeks later. The Kings, who had no insurance at the time, were on the hook for almost all costs.
Jeff King63, Lawrence, Kan.
Approximate medical debt: 160 thousand dollars
Health problems: Cardiac resection
Jeff and Karen King received the $160,000 bill a few weeks after Jeff’s procedure to restore his heart’s rhythm.
Instead of subscribing to traditional health insurance, The Kings have joined a so-called “medical cost-sharing plan” with a company called Sedera, which describes its service as “a refreshing non-insurance approach to managing large and unexpected healthcare costs.” With this health insurance alternative, members agree to share each other’s expenses. The plans are often based on faith and are growing in popularity In the last years Because it can be cheaper than traditional insurance—the Kings said their plan costs $534 a month, plus an additional $118 a month to join a direct primary care medical practice.
But share plans provide less protection than insurance and come with conditions. The Kings said their plan didn’t fully cover pre-existing conditions like Jeff’s heart condition in the first two years of coverage — and he needed surgery after 16 months.
It’s important that members understand the cost-sharing model and membership guidelines, a Sedera spokesperson said in a statement. “Sedera members have read and agreed to these prior to joining,” the statement read.
The Kings have engaged in all types of health coverage during their 42 years of marriage. Working as an evangelical pastor in his hometown of Osage, Kansas, Jeff never provided insurance for the couple or their five children, all of whom are now adults. The exception came during Jeff’s most recent stint leading the congregation, which began in 2015. Karen recalled feeling “unworthy” of the $1,800 a month the congregation paid for their insurance.
“We certainly would never have come up with these kinds of premiums for ourselves,” she recalls.
But Jeff decided he had to leave that job in 2018. He said he felt forced out because of disagreements with some of his congregations over eternal damnation (“As a loving parent, I could never punish my child forever”) and same-sex marriage (“Maybe God Much more inclusive than we are”).
After Jeff resigned, the Kings briefly bought insurance through the Affordable Care Act marketplace, but later dropped it because they did not qualify for benefits and felt they could not afford them.
That’s when they joined the Sedera plan. They knew the condition’s pre-existing condition was a gamble, but medication had managed Jeff’s heart condition for years, and they didn’t expect he would need medical procedures to treat it.
What is broken: Without employer-sponsored insurance or federal subsidies to help fund their coverage, the Kings felt traditional insurance was dead. But their lack of insurance left them exposed to hospital fees that ordinary patients never see.
Hospital fees are generally understood by health economists to bear little resemblance to the actual prices that are normally paid. Instead, they represent an opening shot in the high-stakes negotiations between hospitals trying to get as much money as possible to provide care and insurance companies trying to pay as little as possible.
But patients lack the bargaining power of large insurance companies, which may cover hundreds of thousands of patients in any hospital catchment area. For patients like Jeff, the main recourse is to go through the hospital’s financial assistance program, even though many patients can’t afford the bills that hospitals send them.
Ultimately, the Stormont Vail Assistance Program offset about $107,000 from Jeff’s original bill. Sedera provided a negotiator to help him bargain costs.
Stormont Vail provided $19.5 million in financial aid in the 2020 tax year and cleared about $13 million in bad debt, according to tax returns. Its net revenue from patient services was $838.7 million.
In addition to providing financial assistance, Bill Lane, director of Stormont Vail, said the hospital works with patients facing high bills and offers interest-free payment plans. Lin said the payments are often in the range of 10% of a person’s monthly income. And for some patients, the hospital has a “catastrophic deduction” program that sets their credit at 30% of the family’s total income. The hospital also works with a local bank to provide loans to patients to pay their bills, and the hospital sometimes sends patient balances to debt collection agencies.
Lin said he generally recommends that patients carry traditional insurance. He also said the hospital offers a “patient estimates module” and suggests patients wait to schedule surgery, if at all possible, if they want an estimate to “make an informed decision.”
what’s left: Despite Sedera’s two-year waiting period to cover the pre-existing conditions, the plan gave Jeff $15,000 to help with his bills. After Jeff paid the hospital and then negotiated for several months, his final balance was reduced to $37,859.34 in November 2021.
For his payment plan, Jeff said he was told the hospital would accept a minimum of $500 a month — the equivalent of an additional mortgage payment for royalty. Geoff estimates it will take the family more than six years to pay it back.
“I never expected it wouldn’t cost me anything, but I didn’t expect it would either,” Jeff said.
The Kings are pooling money to pay what they owe the hospital. A few months after Jeff’s removal, they sold their home in Osage—where they raised five children and where Jeff grew up—and bought a smaller home in Lawrence. They were hoping to use that money to build their retirement account, since Jeff’s decades of pastoral work didn’t include a pension or a 401(k).
Instead, selling the house helps pay off Jeff’s medical debts. Karen has part-time jobs, and the couple took out a life insurance policy, too.
Jeff begins working as a nursing home chaplain – for the extra income, but especially to qualify the couple for health insurance. This meant less time for his passion project, where he runs a nonprofit called Transmoto through which he provides spiritual guidance.
In February, Karen checked again if the couple could afford the Affordable Care Act insurance so Jeff could return to Transmoto full-time. Instead, her Google search for the federal government’s health insurance marketplace (HealthCare.gov) inadvertently landed her on websites selling consumer information to insurance brokers. Speaking to one of those brokers on the phone, she bought what she said she was told was an Aetna plan. But it turns out she’s a member of a cost-sharing plan with a company called Jericho Share, which received more than 160 complaints on the Better Business Bureau website in the past year.
Jericho Share spokesperson Mark Hubbard said in a statement that the organization “issues full refunds when there is consumer confusion” and continues to “evaluate and update our marketing efforts to increase transparency and awareness.”
Hubbard also said Jericho Share is cooperating with regulators in California and New Hampshire who have questioned whether the organization meets state requirements for Health Care Share. California is also wondering if Jericho Share has already received 501(c)(3) nonprofit status from the IRS.
After that plan was canceled and their money back, the Kings eventually signed up for the ACA Market Plan. Jeff reduced his hours as chaplain, freeing up more time for Transmuto. Overall, the couple feels very lucky.
“The way our system is behaving is so tragic,” Jeff said. “It puts a lot of people in impossible financial straits.
KHN Kaiser Health News is an independent national editorial programme KFF (Caesar Family Foundation).