They Hated Health Insurance. So They Started Paying For Each Other’s Care.

When Geoff Perlman’s 20-year-old son broke his arm in December 2022, the bill was paid by strangers who chipped in to cover the costs. 

And rather than paying a monthly premium to a health care company, Perlman writes a check each month, never exceeding $420 for his family of four, to foot strangers’ health care bills, covering part of a pregnancy for one family or chemotherapy for another.

Perlman, a 61-year-old tech CEO from Austin, Texas, is a member of CrowdHealth, a health care startup that seeks to replace health insurance with a crowd-funding model that the company says lowers costs and diverts money from insurance conglomerates to real people. Perlman likes the company because he says it sidesteps insurers’ incentive to deny claims and seek profit, while erasing patients’ ignorance about what health care actually costs.

“You have a feeling you’re part of a community and you’re looking out for them,” says Perlman. “It feels like the money I am paying is helping other people.”

CrowdHealth, which was founded in 2021, offers a new take on an old idea. For decades, religious health-sharing ministries with names like Medi-Share and Samaritan Ministries have asked communities to pitch in for the medical bills of strangers. CrowdHealth has no spiritual affiliation; it’s a peer-to-peer financial-technology company that allows its roughly 10,000 paying members to make payments toward fellow members’ medical expenses. 

To join, members pay an administrative fee of about $55 a month. Each month, they get a message from CrowdHealth informing them that another member needs financial assistance for a specific medical issue. Members can agree to pay their share of the bill, which doesn’t exceed $140 per month for a single person under 55, or $420 for a family of four. Or they can decline—at the cost of eroding their rating on CrowdHealth’s site, making it less likely that fellow members will contribute to their own needs.

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When a member has a health care expense, they’re instructed to pay in cash, or tell a hospital that they are a self-pay customer, save the receipts, and submit them to CrowdHealth for compensation. (CrowdHealth sometimes negotiates the price of planned labs or procedures ahead of time.) The company says it covers 99.8% of claims, though it does not specify what exactly is counted in that statistic.

What draws people to CrowdHealth is deep discontent with the U.S. health insurance system. The share of Americans who said that the quality of health care in the U.S. is excellent or good—44%—is the lowest since at least 2001, according to a December Gallup poll. Even many of those with good insurance coverage are frustrated at the system’s perverse incentives, byzantine regulations, and opaque processes. It’s this frustration, in part, that led to a groundswell of public support for Luigi Mangione, who was charged with first-degree murder in December for allegedly gunning down UnitedHealthcare CEO Brian Thompson in Manhattan. (Mangione has pleaded not guilty.)

“There’s certainly a growing voice of people saying, ‘What do we need health insurance for if it’s just denying care?’” says Michelle Long, senior policy manager at KFF, a health care research group.

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For better or worse, CrowdHealth is not health insurance, and there are caveats to the coverage it will provide. CrowdHealth won’t pay for procedures related to preexisting conditions, including pregnancy, until you have been a member for nine months. They won’t accept smokers, heavier individuals, or anyone age 65 and over. It doesn’t cover long-term prescription or fertility treatment. And the company expects members to spend time on the phone with medical providers negotiating a cash price, as well as sometimes putting money up front to pay the bill before waiting for reimbursement. There is no guarantee that CrowdHealth will pay for your medical procedures.

Still, for some people, the idea of health-care sharing is more appealing than dealing with insurance companies. “What resonates with people is that they’re just tired of health insurance. They’re tired of these bills and these claims getting denied,” says Andy Schoonover, the CEO and founder of CrowdHealth.

Schoonover says his own frustrations with health insurance motivated him to create CrowdHealth. After he sold a company and lost his employer-sponsored health insurance, he went on the health care marketplace and purchased insurance for himself, his wife, and two children, paying about $1,200 per month.

Like many Americans, Schoonover had a plan through the Affordable Care Act, which dramatically expanded access to health care in America. But many consumers have reported problems getting claims approved through these plans. Nationwide, about 20% of claims through healthcare.gov insurers were denied in 2023, according to a KFF analysis.

Schoonover says that his insurer refused to pay $8,000 for ear tubes to treat his one-year-old’s recurring ear infections—a treatment doctors said was medically necessary, but the insurer said was not. So Schoonover started thinking about alternatives.

“I said to them, ‘Look, if you’re not willing to pay my bills, I won’t pay your bill,’” he recalls. He dropped his insurance, started to pay cash for procedures, and began looking at better ways to cover health care bills without insurance.

Schoonover says he was surprised how much money he could save by offering to pay cash rather than offering up his insurance card, since he spared doctor’s offices administrative costs. But that still left the question of how to cover the crushing fees of a major health problem like cancer. That’s where the idea of CrowdHealth came in.

“My next thought was, ‘If I could get a group of people willing to go the same route as me, then there could be others out there to help me in the case of a large medical event,” he says.

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Schoonover took to dozens of podcasts—many of which focused on Bitcoin or cryptocurrency—to promote CrowdHealth, in search of an audience already thinking of alternatives to current systems. One of them was Kyle Ward, now 33, who had gone without health insurance for 10 years after realizing that he wasn’t using his employer-sponsored health insurance yet was paying hundreds of dollars a month for coverage.

Ward had weighed the pros and cons of going without health care, and when the Affordable Care Act came out, he and his wife thought about signing up for a plan. But on his $44,000 per year salary, a premium of $300 per month plus a $7,000 deductible didn’t seem worth the money, he says. He and his wife decided it was a better financial decision to invest the money they would otherwise spend on health insurance and just pay cash for health expenses.

Doing so led to significant discounts, according to Ward, who says a doctor’s visit near where he lives in rural Texas was $80 if he paid cash, while his wife’s asthma medication was about $280 every three months. A gallbladder surgery that he had been told would cost $34,000 through insurance went down to $8,000 when he offered to pay cash, Ward says. Childbirth was $6,000 through a midwife who took cash.

But Ward was still worried about catastrophic health events. So when he heard about CrowdHealth, he decided to sign up. It wasn’t a perfect solution. Ward has a preexisting condition that requires frequent colonoscopies, and he knew that CrowdHealth would not cover those. But CrowdHealth helped him find a place willing to do the procedure for $950 cash, he says, and he figured that CrowdHealth was still worth it.

“Traditional health insurance is not working,” he says. “Maybe I’ve bought into the sales pitch, but CrowdHealth makes sense to me financially and morally—and it really feels like they want to do good.”

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CrowdHealth appears to be popular with users—on the website Trustpilot, it received 4.8 stars out of 5, with 411 reviews. But it won’t be the right solution for many families. It is not regulated like health insurance, and so if your claim is denied, there’s no regulator to turn to.

Caroline Niziol was a member of Medi-Share, one of the largest religious health-sharing ministries, from 2015 to 2017. It saved Niziol’s family a lot of money: Medi-share cost them around $350 per month, while their traditional health insurance premium was around $850. But the ministry did not cover vaccines, physical therapy, or mental health care, and had an annual household ceiling for medical costs.

When her husband had a procedure related to a chronic health condition that cost $10,000, Medi-Share refused to cover it, Niziol says, even though she believes they should have. Niziol says she had to argue with Medi-Share for months to get it covered, as she did when her newborn baby ended up in the emergency room.

“I kind of feel like you get what you pay for,” she says. "It can really be a time suck.”

Medi-Share, which has 336,000 individual members, said in a statement to TIME that 80% of all bills are processed in 30 days or less. Member-voted guidelines govern what is and is not eligible for sharing, the company says, and these guidelines stipulate that there is no annual or lifetime limit on eligible medical bills. Medi-Share also says that physical therapy is eligible for sharing for up to 20 visits combined, and short-term counseling services are available by phone through Medi-Share's telebehavioral health service.

CrowdHealth is small relative to religious health care sharing ministries; the Alliance of Health Care Sharing Ministries counts nearly 700,000 members. The unregulated nature of these health-sharing companies has drawn attention from some states. In 2022, Colorado passed a law that requires health-sharing ministries and medical cost-sharing communities to report specific information to the commissioner of insurance regarding financial operations, membership, and medical bills submitted, paid, and denied in the state. It also required these communities to provide certain disclosures to members and respond to requests for payment of medical expenses without a specific period of time.

Susan Lontine, the former Democratic legislator who sponsored the bill, says she introduced it because some Colorado residents had thought their health care expenses would be covered by these ministries and were surprised to find out they were not. “We were just trying to get a handle on who these entities were,” Lontine says.

The Alliance of Health Care Sharing Ministries sued the Colorado Division of Insurance over the law in May 2024, arguing that it deprives their members the right to exercise their religious liberty in the health care system. In the lawsuit, the alliance says that 33 states have enacted safe harbor laws clarifying that health care sharing ministries are exempt from the state insurance code. Four additional states have allowed them to operate exempt from the insurance code by providing members exemptions from state health insurance mandates.

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Health care experts say that people should thoroughly research their options before signing up for health sharing. Many people might qualify for free or low-cost plans through the Affordable Care Act; research by KFF suggests that about 5 million people who didn’t have insurance in 2023 could have gotten a plan through the ACA that was essentially free due to available subsidies. Experts also caution that people should think twice about giving up on health insurance because they’re healthy and they think they will continue to stay that way. “You just can’t anticipate everything that will happen,” says Long of KFF.

For some people, though, having an alternative to traditional health insurance is revolutionary enough. Geoff Perlman, the CrowdHealth member whose son broke his arm, says the cost savings alone are worth it to him. As a CEO of a tech company, Perlman knows a lot about the cost of health care. He offered UnitedHealthcare to his employees, and was on the plan for a while, paying about $2,000 per month in premiums for his family of four. He then switched to Liberty, a health-sharing ministry, in 2017, paying about $1,000 a month. When his wife got breast cancer in 2020, he says, Liberty paid every bill, even negotiating $1.2 million in total costs down to $217,000, which it paid.