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Opting-out of Obamacare through medical-sharing ministries

Patrick Herrera | E+ | Getty Images

The tweets from popular syndicated radio host Ken Coleman were enticing:

"Worried about #Obamacare? Don't! Reform your own healthcare with #Medishare. I did, you should."

"You can afford healthcare for your family! We chose #MediShare—options average less than $300/month."

Most interesting from Coleman, who lists Medi-Share as a sponsor, was this: "My family is immune to #ObamaCare and we are saving money! Join us with #MediShare."

Each tweet contained a link to a Melbourne, Fla.-based nonprofit called Medi-Share, which bills itself as "Christian Care Medical Sharing." With family plans that start as low as $282 a month, this faith-based cooperative approach to sharing medical expenses promises big savings over traditional health insurance.

"Haven't you heard about Medi-Share?" a pitchwoman asks a friend complaining about insurance costs in a commercial for the plan. "It isn't insurance; it's a nationwide network of Christians who save money by sharing each other's medical bills. We get to pick our own doctors, and our share is almost 40 percent less than our old premium. ... Medi-Share is a health-sharing ministry, which makes it exempt from the health reform laws."

(Read more: Red states could beat blues in Obamacare sign-up)

It's gotten little attention, but it's true: The individual mandate in the Affordable Care Act requires all Americans to have health insurance or face penalties, but members of medical-sharing ministries are exempt from the individual mandate that will be enforced beginning in 2015.

It's there because of the work of then-Congressmen Tom Perriello, a Virginia Democrat and Sens. Max Baucus, a Montana Democrat, and Republican Charles Grassley of Iowa, who fought to add the exemption to the law. It's the same principle that allowed for the Amish to be exempted from the individual mandate—with the crucial difference that it's a lot more practical to join Medi-Share than it is to become Amish.

Founded in 1993, Medi-Share historically grew at roughly 10 percent a year. Since the Obamacare passed in the 2010, growth has ticked up to 15 percent as some Americans look to end-run the mandate. About 150,000 people are members of medical-sharing ministries, and 60,000 of them belong to Medi-Share, according to Medi-Share President and CEO Tony Meggs.

The exemption requires qualifying health-sharing ministries to have been in operation before Dec. 31,1999, which gives something of a monopoly to Medi-Share and the two other qualifying organizations, Samaritan Ministries and Christian Healthcare Ministries.

Here's how it works: To join Medi-Share, members must pledge their Christian faith and promise not to drink, take drugs or have sex outside of a traditional marriage. A reference from a minister may also be requested. Certain pre-existing conditions render applicants ineligible, while chronic issues such as obesity sometimes lead to acceptance into the program contingent on undergoing wellness counseling.

The coverage doesn't include products of "un-Biblical lifestyles," such as contraception or substance rehab, or some preventive medicine, including colonoscopies and annual mammograms. Those policies lead to lower costs for all members, Meggs said.

(Read more: Obamacare's big win on health-care exchanges)

When you have a medical bill, you submit it to the organization. If it meets the eligibility requirements and your annual medical expenses have exceeded the threshold in the plan you signed up for, the bill is "shared"—that is, covered.

If your submission is rejected, you have the right to file an appeal. A randomly selected jury of seven of your Medi-Share peers will consider the facts of the case and determine whether to cover the expense.

"Sharing medical bills through Medi-Share has saved individuals an average of 32 percent (or $945) per year and families an average of 47 percent (or $2,944) per year when compared to paying an average insurance premium," Medi-Share said in a 2011 press release.

Sound good? The catch comes in the disclosure at the bottom of the website.

"Medi-Share is not insurance. It is a not-for-profit ministry and is not guaranteed in any way. Medi-Share is exempt from regulation."

Members of Medi-Share who forgo health insurance send in hundreds of dollars each month in exchange for no guarantee of anything and a service that isn't subject to regulation.

Medi-Share responds that in the current fiscal year, 76 percent of bills submitted for sharing were deemed eligible and that all bills deemed eligible for sharing were covered. The organization produces an audited annual report each year and as of June 30, 2012, had net assets of $1.4 million. That works out to less than $25 for each member. Since its founding in 1993, MediShare has remained solvent and shared $725 million in medical expenses among its members.

Some experts aren't fans.

"The whole goal of health-care reform is to ensure that people are protected against risk and illness, and this violates that fundamental goal," said John Gruber, an MIT economics professor and the director of the health care program at the National Bureau of Economic Research. He also served as a technical consultant to the Obama administration on the Affordable Care Act.

"One big set of issues is that they're not regulated for solvency," said I. Glenn Cohen, a professor at Harvard Law School and co-director of the Petrie-Flom Center for Health Law Policy, Biotechnology and Bioethics. "They can go bankrupt. If it gets too many claims and they can't pay them, [it's] 'too bad, so sad.' "

Meggs doesn't see it that way.

"In insurance, you're placing your faith in a company to manage themselves well; you're placing your faith in that regulator to ensure that it's properly reserved—you're placing that faith somewhere," he said. "With health-sharing ministries, you're placing your faith in people just like you."

(Read more: Look out below! Work more, get less in Obamacare 'cliff')

Meggs cites Acts 2:44-45: "All the believers were together and had everything in common. Selling their possessions and goods, they gave to anyone as he had need."

Whether that's an adequate substitute for health insurance is something that, under current law, you'll get to decide for yourself.

—By CNBC contributor Zac Bissonnette.

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