Rising health insurance costs are squeezing household budgets – especially for families and those not yet on Medicare. In this week’s episode of Retire in Texas, Darryl Lyons, CEO and Co-Founder of PAX Financial Group, breaks down the differences between traditional health insurance and medical cost sharing programs and how each can impact cash flow between ages 62 and 65.
Show Highlights:
- The 2025 cost picture: premiums and out-of-pocket trends families are feeling.
- Traditional insurance vs. cost sharing: deductibles vs. IUAs, “premiums” vs. “shares,” and how reimbursement works with cash pay.
- Networks and access: why many sharing programs don’t use networks – and what that means at the doctor’s office.
- Coverage nuances: preventive care, preexisting conditions, and when ACA plans may be a better fit.
- Faith-based vs. non-faith options: examples like Samaritan Ministries, Medi-Share, Christian Healthcare Ministries, and Sedera.
Whether you’re still working, planning to retire before 65, or helping adult children evaluate coverage, this episode offers practical insights to compare traditional insurance with medical cost sharing and make a more informed decision for your situation.
If you enjoyed today’s episode, be sure to share it with a friend or family member!
Transcript:
Hey, this is Darryl Lyons, CEO and Co-Founder of PAX Financial Group. And you’re listening to Retire in Texas, where building wealth comes with clarity and purpose and peace. And we’re guided by 1 Timothy [6:17] through 19. I want to help you grow your net worth without losing your grounding. And if that’s what you’re after, this is the right place.
Remember, this information is general in nature only. It’s not intended to provide specific investment, tax, or legal advice. Visit PAXFinancialGroup.com for more information. So, I really, really, really get frustrated with health insurance today. It is burdening families big time. And it’s been this way for a while. There’s an article in USAA, the average cost of ensuring a family of four through the workplace has tripled, nearly tripled since 2005.
This is according to the Milliman Medical Index. A typical employer-sponsored health plan now costs more than $35,000 for the average family. Now that’s employee and employer costs, so that the family’s not feeling all of that, but they are feeling a big chunk of it. In fact, let me go to a little further down in this article.
The average American spends $1,211 out of pocket on health care in 2025. And these are just expenses not covered by the insurance premiums. So not only is the insurance premium expensive, the out-of-pocket cost, because the high deductibles are also burdening families. When I go through budgets, which I don’t do as much as I used to, but I still help people out.
This is a pain point is the insurance. And so, I’ve got some solutions here. I just want to unpack with you guys. And if you’re in the Medicare space, meaning you’re retired and your on Medicare, Medicare is yes, it’s completely broke. There’re problems with it that need to get resolved. If you’re retired, you’re not going to feel the pain of resolution or, you know, whatever they’re going to have to do to make it better.
The next generation probably will. But you just enjoy it. Medicare has been working pretty well. We sell Medicare insurance for our clients, not for the community in general, just as a service for our clients. So, I say I’m very familiar with Medicare, pretty familiar with Medicare. I don’t feel comfortable with Medicare except for the brokenness of the system.
It’s the pre Medicare stuff that’s really, really, really broken. And it’s just the burden it’s putting on families. And like I said, a lot of people don’t think about it because it’s payroll deducted. But your net check if you’re working for somebody is a lot less because of health insurance. And alternatively, if the employer is picking up the tab, then they’re not able to provide other benefits or pay increases because they’re burdened with health insurance.
So, it is at the end of the day, hitting families. I may be overemphasizing this, but I can’t think of a more burdensome part of somebody’s cash flow than health insurance. I just can’t think of one. And you could say taxes for middle class just depends on where you’re landing in the tax brackets.
And then, of course, what gets pushed out when you know, your paycheck is a lot less is saving for the future and giving. So those are the things that just don’t happen because you’re still going to pay for your kid’s braces. You’re still going to pay for food, and you’re still going to pay for health insurance.
But, I think I have some solutions that you can just noodle on. Is that cool? So, I want to talk about the sharing programs versus the traditional health insurance. So, hear me out. You’ve probably heard me talk about this before, but if this is for you, cool. If it’s not, if you’re retired.
Because I know a lot of you guys have retired. Share it with your kids. But think you think about the traditional insurance marketplace. You’ve got deductibles, you got co-pays. And the reality is, as I said just a few minutes ago, the deductibles are going up. So now it’s $5000, $10,000 deductible. And then, you know, the premiums are going up at the same time.
What’s causing it? I actually that’s another show. What’s causing all of it? The reality is, is that’s how it is. High deductibles, high premiums. So, the alternative is interesting because for 25, 30 years, the Christians have created something that shares each other’s burdens according to Scripture. And it’s been working incredibly well. They’re often organized as non-profits.
One of them is called Samaritan Ministries. Another one’s called Medishare. There’s the Christian Sharing Ministries that’s advertised on the Dave Ramsey Show. I’ve used Samaritan Ministries personally, I guess 12 years now, maybe longer than that. So, I’m very familiar with these sharing. I’m going to call them sharing programs. Let’s call them medical cost sharing programs and compare those, juxtapose those to traditional health insurance.
And that’s what we’re going to do here is kind of compare the two. So think of these things, typically I say typically because I’m pretty sure all of them are nonprofit medical cost sharing communities where members voluntarily share each other’s medical expenses. So, it’s not insurance but operates under similar principles. So, members choose something called an initial unshakable amount that’s abbreviated IUA.
That is the same as a deductible. They have to use different language. Otherwise, they fall under the regulatory world of insurance and they try to avoid that. So, they called an initial uninsurable amount IUA. And so that’s the out-of-pocket that you’ll pay before the community collectively shares in the rest. So, it could be 5000.
But honestly, it’s a lot of times $400, $500, initial uninsurable amount. Think about that. And I’m not far off. They all vary. There’s like in each. So even Samaritan Ministries has various options. So, when I give you general numbers, you’ll have to check it out for yourself. But having a $500 and I’m using air quotes deductible or initial uninsurable amount versus a, 7,000, a 10,000.
I mean, this is significant. So, it’s much lower initial uninsurable amounts where you as a family have to pay the bill before the insurance company pays. It’s a lot lower. You know, traditional insurance is a contract between an individual and insurance company. And so, all the nuances that come into that, again, the definitions are different.
Policyholders pay premiums and the insurance company covers a significant, maybe not all of it. A significant portion of the claim after deductibles met, very comprehensive, typically offers some type of preventative care. Offers mental health services, prescription drugs, emergency services. So that’s kind of the basic framework just to know the definitions are different, because it’s legally two different things.
So, you have in the cost sharing community you don’t have premiums. You have shares. I mean, I think we call them, shareables or shares or something like that. You don’t have premiums because you don’t want to call them premiums, because then you might fall into the, the legalities of insurance. And so, like I said, you don’t have a deductible.
You have an initial uninsurable amounts of, the language kind of can get confusing, but it’s basically the same thing. So just some of the differences are highlight. The monthly cost is going to be significantly different. Let me give you an example. Just it’s just kind of a general example, family of four traditional health insurance. Talked to a lady just the other day, this is a good example.
She has a family of four. Her health insurance is $1,500 a month. I mean, that’s just crazy. If she were to switch to a cost sharing plan again, you can pick a bunch of them. It’ll probably be about $500 a month. That should get all of our attention.
So you’re like, where is the difference at, in all the messiness of a big conglomerate machine called our insurance industry? So that’s where it’s at. It’s again, I’m not going to get into all of that. That may be a different podcast, but all the messiness that comes with the insurance world, that thousand dollars is where, you know, the consumer is ultimately paying.
I mean, think about it. What could a family do with an extra $1,000 a month? And we’re talking about saving for college. We’re talking about giving, premiums are significantly different. Networks, think that’s a good question. There’s, you know, traditional insurance. They have networks. There’s no networks in the cost sharing world. I, typically when I’ve gone and gotten services from a physician or a doctor, I just tell them I’m cash pay.
It’s an easier conversation. And so, what happens is I’ll go in there, get a service. And I’ll pay for it upfront. This is, you know, I’m in a different financial situation, and not everyone can do that. So, there’s another way around that. But I’ll pay for it upfront, and then I’ll submit for reimbursement through Samaritan Ministries, and then I’ll get a check from other people around the country to cover my claim.
So, if you don’t have the money up front, you can still submit a claim and then get the money from the sharing community and then pay the hospital. So, there’s a workaround there, but there is no network is my main point. There is one time, by the way, we’ve had over $100,000 in claims on these sharing communities, and they’ve all been paid.
But there’s one time that I had somebody who said they wouldn’t take cash pay. It was a specific, very, very specific physician out of Boston. And that was the only time he said no, I don’t, I only take insurance. Other than that, everyone’s been cool with cash pay. Here’s something that’s different, though. Preexisting conditions in the cost sharing community are problematic.
And that’s one of the good news about traditional health insurance today. Probably the only thing I would say that I really agree with and the Affordable Care Act, Obamacare, is no preexisting conditions. There’s obviously indirect consequences of doing that. But it is good for a lot of families. So preexisting conditions in the past before ACA, you couldn’t get health insurance.
Now you can. But in the cost sharing, you have to check with each company because they have different ways of handling it. Some of them will not take care of preexistence at all, and other ones will have limited coverage for maybe a like a 36 month period. So, you have to check on that, preventative care, in the cost sharing world, those are not covered.
So, you know, just mammograms and physicals. They consider that like the oil change of a car insurance program. So, you know, you maintain your body that’s on you. And just as though in car insurance, they’re not going to reimburse you for oil changes. So that’s kind of how they look at that. Whereas traditional insurance, they’ll usually cover some of that stuff.
Another, again kind of exploring the disadvantages and advantages here. The tax benefits, if you have a high deductible traditional health insurance plan like I’ve been mentioning over and over again, those will allow you to set up a health savings account, which is really, really awesome because you can put money in and it’s tax deductible. I love health savings accounts.
There’s not yet a health savings account equivalent in the cost sharing world. Maybe there will be, but there’s no HSA. And then finally, I think the biggest thing that people worry about when it comes to the traditional health insurance versus these cost sharing is the regulations. If you have a huge, huge claim, will it be covered by these sharing organizations?
That’s a good question. Like I said, I’ve had a ton of claims, haven’t had any issues. And it’s something that you have to make a judgment call as a family on whether or not it makes sense. The interesting thing that I think is worth considering is because traditional health insurance doesn’t have preexisting issues anymore.
If you have a claim and you need to shift over to traditional health insurance, at least you can get coverage in the Affordable Care Act model today. So that’s good. The other thing I’ll mention, and I didn’t have this written down, it’s just off the top of my head. It made me think of it. But some of these traditional, let me say this, some of these cost sharing plans, many of them are faith based.
There’s one that’s called Sedera. That’s not faith-based, but that’s worth looking at. So, if this is a problem, then you could look at Sedera, but the Christian ones usually require a statement of faith, and it has to be signed off by your pastor, annually. And you think that’s kind of weird but think about this. It’s also a good way to have the right pool of risk in your ecosystem.
So, you’re typically looking for people, and there’s many of the programs that will demand that you sign off and do an attestation on whether or not you’re having sex outside of marriage. You’re abusing alcohol, tobacco, the purpose of that and going to church, the purpose of that you might find kind of dogmatic, but from a business standpoint, it actually makes for a cleaner pool of risk.
Because think how many health claims today are a direct result of alcohol abuse alone or tobacco abuse. So, you know, from that perspective, it is a good business decision. But if the faith component is troublesome to you, Sedera is, Dr. Tony Dale, I know him, an incredible man. I’ve had him on podcast before creating alternatives.
So that’s good. Let me give you an example real quick, and then I’ll land the plane. Lisa and Tom, 62 years old, retired early. So 62, you don’t get Medicare till you’re 65. So, this is a tricky period before Medicare kicks in. And so, they’re debating do I get traditional insurance or maybe do I look at this cost sharing. The traditional insurance is about $1,500 a month with a $7,500 family deductible, predictable coverage, access to specialists.
But man, it’s expensive. The alternative is this cost sharing plan that has, in this case, about a $2500 so relatively high initial sharing amount. So, you’ll have to cover that versus $7,500 deductible. So still less. And it’s about $600 a month. So pretty nice. It’s a much lower cost, completely flexible. But it’s not you know, it’s not insurance.
So, it’s different. And so that’s kind of the thing to think about. And if it makes sense then I think it’s really useful to determine that if you’re thinking about retiring before 65 because a lot of people, a lot of people will work to 65, to the extent that it’s damaging their health. So, hear me out.
This happens a lot. You stay with your employer and it’s causing health problems. People don’t like you because you’re cranky and somebody else is wanting your job, but you’re still there because you don’t think you can retire because you need Medicare. Do you know what I mean? That happens a lot. And so what I’m trying to say is at 62, you can get insurance, you can get traditional individual insurance on the marketplace, and you can compare that to these cost sharing programs.
And you can get out of a situation that may be causing more harm than good. I know that’s a lot to unpack. I still have 2 or 3 pages of notes in front of me, but the mind can only endure what the tail can absorb. I guess that’s what they say. So I just hope that was enough.
To get you thinking a little bit more. Visit these sites. There’s Samaritan Ministries, there’s Sedera, there’s Medicare and Christian Sharing Ministries. There may be more but check them out. Make sure you share it with your kids or family members so they can make better decisions because they don’t know these alternatives exist. I really appreciate you listening to Retire in Texas today.
Stay grounded, live generously, and remember you think different when you think long term. Have a great day.
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