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East Boston man who signed up for 'faith-based' alternative to insurance sues after he says plan refused to cover his emergency appendectomy

An East Boston man who says he's out $55,000 for the cost of removing his appendix is suing a group that claims to provide a lower-cost, "faith-based" alternative to regular health insurance, but which he says refused to pay for his surgery.

In his suit, filed yesterday in Suffolk Superior Court, Lucas Merchant says he had been a member of Universal Health Fellowship, a non-profit "health care sharing ministry" in Alpharetta, GA, for just two months when he needed emergency surgery to have his appendix removed. He alleges that despite repeated assurances up to the point he went into the operating room that the procedure would be covered, as he recovered, he learned it would not - via a bill from the hospital.

In addition to the group, Merchant is also suing Prodigy North Health Agency of New Jersey and employee Andrew Grasso, whom he says acted as a Universal sales agent and convinced him to sign up.

The group says it and its participants are "united by their faith in the ethical, moral and spiritual principles and traditions of the Unitarian Universalist Church," although the Unitarian Universalist Association, headquartered in Boston, has nothing to do with the group; in fact, it offers insurance from Blue Cross Blue Shield to its member churches.

Health-care sharing ministries, which purport to be a way for people with similar beliefs to pool money to help each other out in a time of medical need, are the result of an exemption included in the Affordable Care Act in a failed attempt to win conservative support. The groups claim to provide similar services to traditional health insurance plans, such as access to a network of doctors and health facilities, at a lower premium than charged by traditional insurers.

Unlike more traditional health insurers, however, they can exclude coverage for preexisting conditions or even preventative care and prescriptions, can charge people with certain conditions more and can cap total benefits in a way traditional insurers can't. Or as the state puts it:

HCSMs are not insurance and not supervised by state insurance departments. Members typically pay a monthly fee that allows them to submit qualifying medical expenses for sharing with other HCSM members. There are not specific consumer protections that apply to these plans. They may not guarantee any payments, and they do not necessarily pay expenses for the same kinds of services that health insurance covers.

Unique in the US, Massachusetts asks these health-share plans to register their existence - but they don't have to provide the same minimum level of coverage as other insurers in the state; they just have to fill out a form with basic financial and membership data and check a box on that form swearing they do not call their plans "insurance" or guarantee to pay medical bills. However, the state also bars the use of "compensated sales agents, sales tactics, or deceptive marketing practices to solicit or enroll members."

In 2021, roughly 2,200 Massachusetts residents were enrolled in one of these plans, the Massachusetts Health Care Connector reported.

In his complaint, Merchant alleges:

Upon learning of the imminent need for emergency surgery, Plaintiff Merchant contacted Defendant Grasso on at least three separate occasions including prior to the surgery and after the surgery at Mass General Brigham's Hospital in Boston, MA., and on each occasion was informed in no uncertain terms that his health care policy was in effect and his surgery would be covered and paid for by his health plan.

Following the emergency appendectomy surgery and related treatment Plaintiff received from the Hospital, Plaintiff was informed by Defendants that his health care plan would not cover his surgery.

Subsequent to his surgery and related care, Plaintiff received an invoice from Mass General Brigham's Hospital for $55,000.00 for their services rendered, upon which presentment and due demand for coverage and payment from the Plaintiff's health care plan, the Defendants have failed and refused to pay.

Merchant is formally suing on charges of breach of contract, fraud, negligent infliction of emotional distress and unfair and deceptive business practices.

The court has yet to set a date by which Universal, Prodigy and Grasso have to respond to the suit.

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Comments

you pay for, or in the case of "faith based" insurance, what you don't pay for.

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Thoughts and prayers!

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The old Staywell Health Plan

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These sorts of plans simply shouldn't be legal.

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I'm still gonna make fun of him. Maybe he should have prayed harder.

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Oh ye of little "faith based" insurance.

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The story always changes when the bill arrives.

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Religions don’t change though. They’ve always been a scam.

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In this case, it's a scam using religion to attract victims.

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He should keep the receipts because I'm pretty sure he can apply for reimbursement when he gets to heaven.

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It's a shame he wasn't watching John Oliver in 2021:

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It makes no sense to sign up for "faith-based" coverage for something that is reality-based. the doctors are not going to stand in front of you and pray for a miracle, they are going to treat you based on evidence and knowledge.
What would faith have to do with either paying medical bills or treating illnesses in a hospital?
I think the only thing that had to do with faith was the gullibility of the customers.

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I believe there is a carve out in the state mandated MA health care coverage requirement that allows for these types of plans to be recognized, so they not only appeal to those that pray, but also those who won't purchase any type of health insurance, either through their employer, the state or the private marketplace.

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TIL that there are at least 2200 people in Massachusetts that I need to send my bridge listing to.

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These indeed are the days of miracle and wonder.

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I hear they come and burn a giant question mark on your lawn.

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I am SO puzzled by the decision to attach this to the UU brand. I get that it's not a real connection, but it's a strange choice even for a bogus link.

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Do organized religions have any intellectual property rights in the name of the religion? If someone were to open, say, a strip club called “LaGrange Street Presbyterian Mission”, would the Presbyterian Church have any claim against them?

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Great question. But I feel like no, because otherwise we would have seen some really hilarious trademark lawsuits between different branches of those religions.

I suspect the way it works is this: You can't trademark common words and phrases, and these religion names have largely existed since before modern IP law. However, a *new* religion with a new name might be able to do it. (Non-profits can have trademarks even though they don't necessarily engage in "trade", per se.)

I suppose Unitarian Universalism might have been eligible, as it was a rather unusual merger of two different (but similar) religions in 1961, with a new name that was a combination of the two. That might be distinct and novel enough to permit a trademark, although by now that ship has sailed.

A religion trademark could be used to control which churches use the name, and thereby set policy on how they are run, like a franchise. I don't think people would be super enamored with this, though. :-)

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thank God, but this sounds like it should be in US District Court.

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Unique in the US, Massachusetts asks these health-share plans to register their existence - but they don't have to provide the same minimum level of coverage as other insurers in the state; they just have to fill out a form with basic financial and membership data and check a box on that form swearing they do not call their plans "insurance" or guarantee to pay medical bills. However, the state also bars the use of "compensated sales agents, sales tactics, or deceptive marketing practices to solicit or enroll members."

From the description it sounds like they violated several of these Massachusetts specific elements.

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One possible reason is "diversity" - plaintiff is here, defendants are in other states.

Another is that while there are some state claims, the existence of these plans was made possible by a federal law, the ACA. If a federal judge decides the case does belong in federal court, he or she could also hear the state issues.

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"I'm sorry, but your burst appendix was obviously God's will, and by having surgery you have gone against God, thus rendering your plan null and void. Maybe next time you'll just die like you're supposed to and your plan would have paid for a nice floral arrangement (max. cost: $75) for your funeral."

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My thoughts exactly! That's a better dodge than actual insurers used to have about pre-existing conditions. Try proving it was not "God's will" in court.

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