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Health Care Sharing Ministry Sold Bogus Products To Missouri Customers, Lawsuit Says

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George T. Kelly III
George T. Kelly III
Neosho, Missouri, resident George Tom Kelly III says he was duped by the Aliera Companies, which marketed health care plans on behalf of a health care sharing ministry.

A class action suit says Aliera Companies sold “inherently unfair and deceptive health plans" to Missouri residents and failed to provide them with the coverage they thought they would receive.

George Tom Kelly III was looking for health insurance options back in 2018, so when his insurance agent recommended a health care sharing ministry, he jumped at the chance.

The Neosho, Missouri, resident and his wife signed up with Aliera Companies, which was offering remarkably low rates.

Kelly, who has a lawn care business, first suspected he’d been duped when Aliera refused to cover his claims for some routine medical expenses. Then it denied him coverage for hernia surgery he needed, saying his doctors and hospital were out of network.

“I was assured by our insurance agent that they were in network,” Kelly told KCUR. “Even on their website, it explains in black and white that in the two plans we picked, our doctors and hospital were in network.”

Kelly is one of more than a million Americans who, unable to afford private insurance, have turned to Christian health care sharing ministries, or HCSMs, attracted by their low prices.

Members of HCSMs are supposed to have common ethical or religious beliefs and share health care costs. But many of them, while mimicking the language of health plans that comply with the Affordable Care Act, offer none of its protections.

Now Kelly is suing Aliera and Trinity Healthshare, the HCSM for whom Aliera marketed its products. The class action suit, filed in federal court in Joplin on Wednesday, says the companies sold “inherently unfair and deceptive health plans to Missouri residents and failed to provide them with the coverage the purchasers believed they would receive.”

Kelly isn’t alone in feeling he was snookered.

Last month, California insurance regulators barred Aliera and Trinity from doing business in the state, saying the two companies used deceptive marketing tactics to mislead consumers. And in January, insurance regulators in New York issued a subpoena to Aliera, according to The New York Times. At least half a dozen other states have launched similar probes.

Although they offer insurance-like products, HCSMs are exempt from the requirements of the Affordable Care Act as long as they meet certain requirements: they must be tax exempt, share common ethical or religious beliefs, have existed since Dec. 31, 1999, and have continuously shared medical expenses among their members.

But in his lawsuit, Kelly says Trinity didn’t exist until 2018, didn’t limit its membership to those of similar faith and siphoned off members’ payments for “exorbitant fees and commissions.”

“On the one hand, these guys state, in small letters sometimes, that they’re not insurance, but they convey the impression that they are insurance,” said former Missouri Insurance Commissioner Jay Angoff, now an attorney in Washington, D.C., who represents Kelly.

“They do that so they can sell what is de facto insurance, but it’s crummy insurance that violates the Affordable Care Act. It doesn’t cover preexisting conditions and it has very low annual and lifetime limits.”

Because they’re not technically insurance providers, HCSMs don’t fall under the jurisdiction of state insurance regulators. That means they’re not subject to the myriad regulations insurance companies must comply with. But they do have to comply with certain standards.

“Half the states have legislation that says HCSMs are not insurance, but most of those states, including Missouri, then set out standards that a health care sharing ministry has to meet,” said Eleanor Hamburger, an attorney in Washington state who also represents Kelly.

“One of those standards in Missouri is that you have to report on a monthly basis how the money is being spent. And that of course did not happen here.”

It’s not known how many Missourians are enrolled in Trinity’s plans; Kelly’s lawsuit suggests hundreds and maybe thousands.

Carrie Couch, director of the consumer affairs division of the Missouri Department of Commerce and Insurance, said the division had received several complaints against Aliera and Trinity.

“I can’t speak to whether or not there are open investigations, due to our files being closed,” Couch said in an email. “I can say that Aliera/Trinity Health Share is not insurance nor are they licensed in any capacity with the Department of Commerce and Insurance. Consumers should do their due diligence when shopping, considering more than just premium when choosing health insurance. It’s important to understand what the policy covers, identify current health care needs (including prescription drugs), compare provider networks and other health insurance policies and what out-of-pocket costs will be.”

In a statement, Aliera said its marketing materials make clear that their programs "are absolutely not health insurance."

"Any assertions to the contrary are simply incorrect. We will continue to vigorously defend against false claims about the services our company provides its clients,” it said.

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Dan Margolies
A screenshot of Trinity Healthshare's website.

On its website, Aliera features a slickly produced video with three of its board members – a former New Hampshire insurance commissioner, a onetime counsel for a Fortune 500 company and former Ohio Gov. Terry Strickland – lauding the company’s leadership and saying they wouldn’t have joined the board if they didn’t believe in Aliera’s mission.

“I’ve lived a lifetime protecting my good name,” Strickland says on the video, “and I tend not to give my good name to a cause that I really don’t believe in.”

Katy Talento, a spokeswoman for the Alliance for Health Care Sharing Ministries, which advocates for HCSMs, said Aliera is not a true HCSM because it doesn't possess a certification letter from the Centers for Medicare and Medicaid Services.

"These letters are federal recognition that non-profits meet the ACA (Affordable Care Act) definition of Health Care Sharing Ministries," she said in an email.

"Aliera's deceptive practices are certainly cunning and have left a series of tragic stories like Mr. Kelly's in their wake," she added.

Aliera was founded by Timothy Moses, his wife and their son in 2015. His wife, Shelley Steele, is now chief executive officer and their son, Chase Moses, is president.

Before founding Aliera, Timothy Moses headed International BioChemical Industries Inc., which filed for bankruptcy in 2004 after Moses was charged with securities fraud and perjury. A jury convicted Moses and he was sentenced to more than six years in prison and ordered to pay restitution of $1.65 million.

Aliera originally offered limited coverage for some doctors’ visits and lab services, but it hooked up with an Anabaptist HCSM in 2016 and began marketing its plans as an HCSM. The two groups had a falling out, however, and Aliera then set up Trinity as its own health care sharing ministry.

Kelly eventually had his hernia surgery. He went to a hospital in Oklahoma that openly posted prices for its procedures and underwent the surgery for about $3,000.

He ended up paying the money out of his own pocket, although he said he considered himself lucky.

“I can't stress enough that these people prey on unsuspecting people,” he said of Aliera and Trinity. “I was blessed to have a pretty minor issue that I was able to take care of myself.”

Angoff, the former Missouri insurance commissioner, said he thought it was “particularly cruel to sell this stuff in the midst of the coronavirus pandemic.”

“An insurance company has got to have money to set aside in reserves both for the claims they estimate they’ll have to pay and for an additional cushion,” he said. “Well, these guys have nothing.”

This story was updated to add the comments of a spokeswoman for the Alliance for Health Care Sharing Ministries.

As a reporter covering breaking news and legal affairs, I want to demystify often-complex legal issues in order to expose the visible and invisible ways they affect people’s lives. I cover issues of justice and equity, and seek to ensure that significant and often under-covered developments get the attention they deserve so that KCUR listeners and readers are equipped with the knowledge they need to act as better informed citizens. Email me at dan@kcur.org.
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