Christian Health Co-Op Breaks Law, Says State -- Regulators Claim Program Amounts To Medical Insurance
Don't smoke, don't drink, don't abuse drugs and don't practice homosexuality. Have your pastor certify you don't.
Have your pastor certify that you do attend a Christian church regularly.
Then, donate up to $150 a month for others' medical bills, and the Christian Brotherhood Newsletter will find help for your health care when you need it.
In a time of demands for reform of the complex health-care system, the 14,000-member Christian Brotherhood Newsletter - 230 of them in Washington state - is a sort of old-fashioned cooperative that pays up to $1.5 million a year in medical bills.
The Washington State Insurance Commissioner's office says in no uncertain terms that the arrangement amounts to health insurance. It says the Ohio-based organization is breaking the law by not registering with the office and submitting to regulation as an insurance company.
The Brotherhood denies it's an insurance program.
"The purpose of the Christian Brotherhood Newsletter is to comply with New Testament scriptures to be involved in our brothers' needs," says John Hawthorn, vice president of the organization.
"We're not an insurance company because by the state's description of insurance company, we're not."
On July 1, the two sides will square off before a hearing examiner to decide who's right.
The organization already is under a cease-and-desist order from the commissioner, who has banned operations in the state after the
end of this month.
That prompted Hawthorn's recent suggestion to Washington state members that they form their own church-based organization "for benevolence" - for meeting one another's needs, including medical bills, flowers for the sick, food for the hungry and other necessities.
About 15 churches already have signed up for the program, but its future depends on the hearing outcome, says Clay Ciolek, chairman of a committee to investigate this possibility.
Representatives of Insurance Commissioner Richard Marquardt's office say they won't know if the alternative program is legal until they see it in operation. Meanwhile, they're asking a lot of questions about the Brotherhood.
It was started in 1982 by John Hawthorn's brother, the Rev. Bruce Hawthorn. Bruce Hawthorn started the newsletter after several family members needed expensive medical care in a short period and many church members rallied to pay their bills.
The insurance commissioner's office is adamant about the Christian Brotherhood Newsletter program, which has been operating in Washington about seven years.
"The commission has no reason to believe that they are insincere, that this is a scam or that anyone is getting rich or improperly using funds," says Melodie Bankers, the assistant deputy commissioner who has been working on the case.
But the state is concerned that the organization remain solvent and always stand ready to pay claims or "needs." Similar organizations elsewhere have failed because as their membership aged, medical expenses increased and pushed requested donations beyond what members could afford.
Unlike licensed insurance companies operating in the state, the Christian Brotherhood Newsletter has no cash reserves, is not required to pay a minimum amount each year in benefits and has not been subject to audits by the state.
HOW IT WORKS
The Brotherhood insists its operations are not insurance because participants do not have a contract to pay anything or a guarantee to receive anything. The system works like this:
After a minister certifies the applicant meets the lifestyle criteria and attends church regularly, the member sends in one month's donation, which is used for administration expenses. That's $50 per family member up to a maximum $150.
Each month, the newsletter publishes the names of each member with total medical bills more than $200 (the deductible), the amount of the debt, medical reason for the debt and which members are asked to pay the bill.
For example, member numbers 100 through 125 might be asked to send their monthly payment directly to John Doe, of Jacksonville, Fla., whose wife had treatment for skin cancer costing $2,864.
THE STATE'S COMPLAINT
The insurance commissioner argues that this all amounts to insurance because it contains these elements that define insurance under Washington state law:
-- A contract. Members sign an application agreeing to abstain from certain activities and to pay a certain amount in exchange for having their medical bills paid.
-- Indemnification. The organization exists to repay members' expenses incurred from a loss - in other words, medical bills, says Bankers.
-- Agreement to pay subscribers a specified amount. Under the newsletter coverage rules, there are certain payment specifications, such as a $200 deductible per medical condition.
-- Certain contingencies. The organization will not pay for certain things, such as pregnancy and delivery expenses for an unwed mother. Hawthorn said members voted on this because they believed an individual's home church "is closer to the situation and better able to counsel her."
PROGRAM CALLED VOLUNTARY
Hawthorn argues that because all this is voluntary for subscribers, there is no contract and therefore no insurance.
He points to the language of the application, which says in part: "I understand the home office will not be responsible to send me any money and has no obligation to me, other than to publish qualifying medical needs for eligible members of my family."
Hawthorn says 25 to 50 of the 14,000 members have elected not to pay and are on the organization's "Optional List."
Christian Brotherhood advocates accuse the insurance commissioner of violating their constitutional right to freedom of religion and freedom of the press.
Meanwhile, they say, many laws once outlawing certain practices have been rescinded through the years - including those against gambling, drinking alcohol, cohabitation and homosexual practices.
"Statutes have been changed to allow sin," said Hawthorn. "But when it comes to Christians' rights, they say, `Oh, we can't change the law.' They say we can't publish a newsletter because it would be a crime."
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