An inside look at insurance for America’s Amish and Mennonite communities
The simple lifestyle that traditional Amish and Mennonite people lead often involves avoiding insurance coverage of any kind.
Religious principles discourage the traditional horse-and-buggy-driving Amish and Mennonites from buying personal or business insurance, says Donald Kraybill, a professor and senior fellow at the Young Center for Anabaptist and Pietist Studies at Elizabethtown College in Pennsylvania.
“They would say they have no needs for insurance because the Bible teaches … (caring) for each other,” he says.
About 40 Amish subgroups and 100 Mennonite subgroups live in the U.S., according to Kraybill, who is recognized internationally for his research on Amish, Mennonite and other Anabaptist groups. Although all of the subgroups share similar practices, each one sets its own rules about how to live, dress and travel. For example, Amish communities end formal education at eighth grade and prohibit TVs and computers.
Traditional horse-and-buggy drivers, who make up 95 percent of Amish groups and about 5 percent of Mennonite groups, may participate in various informal church-based “insurance” plans, however. Those plans may cover medical needs as well as damage to homes in case of fires or storms.
Mennonites who are more deeply entrenched in professional American life are more accepting of insurance and typically receive health and life insurance through their employers, Kraybill says. Kraybill estimates 30 percent of Mennonites work in professional settings, from business owners and surgeons to computer programmers and university professors.
Shunning insurance to care for each other
Amish and traditional Mennonites typically object to buying business and personal insurance from outside vendors because they believe in a Christian duty to care for one another. The Social Security system exempted the Amish and “old order” Mennonites in 1965 because of their religious principles and convictions.
Although federal health care reform aims to provide more affordable health insurance to Americans, the Amish and “old order” Mennonite communities would be exempt from any of these programs because of the Social Security rule, Kraybill says.
For childbirth, some Amish babies are delivered at home, while others are born in hospitals or “birthing centers” mostly operated by doctors and midwives specializing in Amish deliveries. However, if someone chooses to be hospitalized, some Amish and Mennonite groups negotiate with hospitals for discounts. Some hospitals are more willing to negotiate with Amish and Mennonite patients for several reasons, including that they pay cash and that they won’t sue for malpractice.
Some traditional Amish and Mennonite church organizations have created “mutual aid” plans, which act as informal insurance, Kraybill says. If someone faces major hospital bills, these organizations might raise money by conducting auctions or soliciting money from other churches.
“These congregational plans are more what I call pass-the-hat plans. If there are significant health needs in your congregation, you simply take up an offering and have an organized way to do that. You share in the cost as a community instead of contracting with an insurance company to reimburse you,” says David Gautsche, senior vice president of products and services at Indiana-based Everence Financial, an insurance and financial services provider for Mennonites.
Health care options
Everence was born out of the “mutual aid” model of insurance, offering licensed insurance policies to Anabaptist denomination members, or those who attend an Anabaptist denomination or share its values. Everence is a fraternal benefits society, which is a membership group that operates similar to a credit union. In a fraternal benefits society, people must meet certain criteria to participate, such as being a member of a trade or professional association.
Everence’s health insurance plan has about 40,000 members, Gautsche says. Still, Everence has struggled to offer rates as low as major insurance companies that have larger pools of customers, he says.
Participation in Everence’s individual health insurance plans has declined the past two decades, as more Mennonites get health care coverage through their employers.
“A generation ago, many of our members would have been involved in agriculture or self-employed. … Those folks needed to have their own health coverage,” Gautsche says.
Nowadays, members are steering away from the self-employed model and opting for employer health plans.
“In most situations, if you’re employed and have access to an employer-based plan, there is not a lot of good business sense why you would choose to turn that down,” Gautsche says.
Some Mennonite seniors also are using Everence’s Medicare supplement plan, which Gautsche says is becoming more popular. The Medicare plan helps cover all or part of a patient’s co-payments and deductibles.
Immergrün, an Ohio-based nonprofit founded in 2002, works with uninsured Amish and Mennonite people to negotiate discounts on elective surgeries such as gall bladder removal, tonsillectomies, and hysterectomies. Immergrün seeks to negotiate hospital and physician fees based on Medicare rates, says Cindy Siedler, administrator for Immergrün.
Immergrün, which was started by Ohio physician Dr. Edwin Nirdlinger, has relationships with doctor’s offices, hospitals and labs in Ohio, Indiana, Illinois, Iowa, Wisconsin, Michigan and Missouri.
“We’re not an insurance company. Patients don’t pay premiums,” Siedler says. “We have contracts with hospitals and physicians. They bill Immergrün. We pay 100 percent of the amount. We bill the patient then for the services.”
But Amish and Mennonite people who use Immergrün can get substantial savings, even if they have to travel out of state for surgery. Siedler says savings vary, but she has seen discounts up to 50 percent to 75 percent for surgery. In 2011, Immergrün saved patients an estimated $6.4 million, according to Siedler.
Ignoring other insurance?
Buying homeowner’s insurance from an outside vendor is not ordinarily permitted in Amish or Mennonite communities. It depends on the community; a few communities might allow it for members who own businesses, if fire coverage is required to obtain a bank loan, Kraybill says.
Traditional Amish people who drive horse and buggies also don’t get insurance for those vehicles. States such as Georgia have passed laws exempting Mennonites from buying auto insurance.