Health care in America, is a big scary mess. We spend more on healthcare than most, but manage to have poorer outcomes. Not good.
Mindy and I are fortunate to have had excellent health. We’re pushing 50, but only have to see the doctor for routine checkups. Same for our children. On top of this, we’ve been fortunate to have had excellent health insurance through Mindy’s work. Life is good.
But as we grow older, we’ll have to lean on health care more. At the same time, Mindy will leave her job before Medicare kicks in (65). What happens then?
I’ve been intrigued by health care sharing organizations for a long time. They’re a way to get health care and avoid most of the nastiness that comes with Big Insurance. However, many of them come with compromises or strange rules. Why should health care be tied to religious beliefs?
Anyway, a couple of years ago, my good friend Bill told me about a non-religious (secular), health care sharing organization called Sedera. I grilled him for a while, trying to poke holes in the organization or find The Catch, but it turned out that Sedera is the real deal.
While this guest post is mostly written with Sedera in mind, much of the information is applicable to other health care sharing organizations. I’ll stop here and let Bill and Jon take over.
How I Earned $75,000 By Dumping Health Insurance Without Losing Healthcare (or peace of mind)
Do you find yourself on autopilot, trusting in the systems you’ve created to keep your life on
track? Sometimes those systems are the result of efficient design and sometimes they’re the
result of just doing what everyone else is doing because it seems to work – until it doesn’t.
That’s the dilemma I found myself in six years ago when I received a notice from my health
insurer stating that my premiums would be going up. Again.
So I made a bold decision that saved my family lots of money and then a second, easy decision
that increased our net worth by $75,000. And the best thing is that we didn’t compromise one bit
on quality. In fact, everything got better.
As a 43-year-old self-employed dad, I knew I had to have health insurance. But since I didn’t
have an employer-provided plan, I was acutely aware of having to pay full sticker price. Being
frugal, I wanted the most affordable option. After all, insurance is something you never want to
use, so why pay more than you need to? It’s not pre-paid medical care. You don’t buy car
insurance for oil changes and brake pads; you buy it for the unexpected issues that stop the car
from working. The same goes for health insurance…or so I thought!
Like many who follow FIRE principles, my family had a catastrophic plan, one with an annual
deductible of around $10,000 to keep the premiums low. There was just one problem. Our
monthly premium had already gone from $700 to $1000 the year before. And now I was staring
down another increase, this time to $1300. Were we getting some extra benefits for these
year-over-year $300 a month price increases? New bikes? Discounts on gym memberships? A
membership in a local CSA? Of course not. But what exactly had changed in the system to
make things so much more expensive? I had no idea. All I knew was that I had a line item on
my budget that was starting to eat up all the other line items.
When you add $15,600 for annual premiums ($1300 x 12) to the $10,000 annual deductible,
that’s over $25,000 per year out-of-pocket before the insurer pays even a single dollar
towards our care. So my kid could break an arm and need surgery and we’d be on the hook for
the full amount! Something had to change.
What if we could find another way to accomplish the same goal of containing large unexpected
medical costs, but at a fraction of the cost?
The short answer is we did. We’re members of a secular health-sharing organization called
Sedera and also patients of a new type of primary care physician called Direct Primary Care
(DPC). And we couldn’t be happier with the result.
By choosing the health share model instead of conventional health insurance, we saved $800
per month. And by investing that in Vanguard’s S&P 500 VIAX Fund over the past several years
we have over $75,000 more in our portfolio! Here’s a calculation of the results:
$500 Sedera monthly membership vs. $1300 health insurance premium with the
difference invested in the Vanguard S&P 500 Fund (VFIAX) at an average return of 13.5%
(including the 2022 downturn).
Savings + investment return = $75k! (By the way, this is a calculation I like to run on most fixed
costs. If I save $X and invest that in the market, how much would those savings become? It puts
things into perspective.)
And in case you think I’m some rosy-eyed utopian who thought health sharing would work
because I just believed it in my heart, think again. I researched the hell out of this topic before I
made the jump. I GRILLED the Sedera team: sales staff, frontline support (amazingly helpful
people in Austin, TX who actually answer the phone!), head of sales, legal team, accounting,
and even the CEO (over the course of many months) before I made the decision.
I wanted to know how this model worked and what the catch was. Once I figured out that there
was no catch but rather just a different approach to the US healthcare industry overall, then it all
clicked. The more you understand about how the medical provider / third party payer system
works, the easier it is for you to make a change. Because right now, particularly if you’re paying
more as a self-employed person or you’re handcuffed to your job because you need their
healthcare plan, you’re operating from fear instead of good information. And I’m here to tell you
there’s another way to do this.
How Care and Payments Work (compared to insurance)
You’re probably already familiar with how health insurance works, and Sedera has some
similarities though it’s not officially insurance. Think of Sedera as a group of your healthy friends
who want to pool their resources to share health-related needs. In fact, with Sedera, when you
have a medical bill you submit it (online – you have your own private portal) as a “Need”. Once
approved, Sedera sends you your “Share”. You have an IUA (Initial Unshareable Amount – you
choose that at sign up) and just as you guessed, this is the dollar amount that you’re
responsible for before you can submit a Need to be Shared. There are many more details about
the number of Needs you are responsible for in a calendar year, what’s an acceptable Need,
how quickly your Share arrives and more – the best way to learn about that is to read some of
the FAQs below. If you need more info or something’s not clear, ask me (www.thefireguild.com)
or in the comments section.
Disclosure: After becoming members and seeing the value in all of this, my good friend Bill and
I started The Fire Guild and became a Sedera affiliate. We earn a small commission on Sedera
sign-ups. We won’t be staying at any 5-star resorts from this (and we wouldn’t if we could), but
you should know. We’re the lowest-cost way to sign up for Sedera since, unlike some affiliates,
we don’t charge admin fees or upsell you to other insurance products the way a broker might.
We want what you want: the cheapest, best option. (But if you’re interested in some pet
insurance for your brontosaurus, we can hook you up – Carl will tell you all about Sedera: the
One other thing: Sedera is not for everyone and that’s okay. We don’t want you to join if this
won’t work for you (because you’ll be unhappy and end up making the rest of us miserable!).
We want a win-win, and Sedera is definitely based on a sense of community and cooperation,
(*Carl Asked Questions)
Why would I sign up for Sedera?
Maybe you’re self-employed and insurance is too expensive. Or you hate your job but your
employer’s plan is keeping you there. Or you just quit your job and can’t deal with the hassle
and expense of COBRA. You’re an early retiree and need bankruptcy insurance. Maybe you’re
high-minded and prefer self-reliance but are drawn to a community of like-minded people. Or
you have a rebellious disposition and you want to disrupt the whole bloated American
What’s great for people like you is you can sign up any time – there is no open enrollment
period. Also, guess what? The prices are low. Like so low you’ll start to wonder why standard
insurance is so expensive (and that kind of wonder is probably why you’re here in the first place)
Which leads us to…
Can you give an example of what it really costs?
Yes. A quick example: 34 year old, single, member of a DPC, with a $2500 IUA (remember, this
is what most people think of as a “deductible”, or what Sedera calls the Initial Unshareable
Amount): $172 per month! (this is NOT a typo and is accurate as of Oct. 2022)
Do you know anyone who’s had experience submitting a bill?
Yes, Bill had some heart trouble and documents his experience here on our site:
This sounds scary. I need 110% assurance. What’s the guarantee?
There is none. Sometimes a good, verified reputation and well-placed trust are all you need. All
I can say is it works for me and my family (and for Bill and his) (and for Mr. Money Mustache, a
Sedera has upfront ALL CAPS disclaimers on their site to make sure you understand the risks
(and they want all members to actively CHOOSE to join). In order to keep their prices low, they
have limitations and some of those would run up against the rules surrounding insurance. As
such, they *have* to clearly post that they are NOT INSURANCE, etc.
If that scares you off as soon as you read it, then you can skip the rest and move on. However, if
you’re a discerning consumer (of course you are, you’re on this blog!), you’ll see that there’s a
lot to calm your concerns: They’ve been in business for over eight years (and their executive
team has decades of healthcare experience), with no lawsuits, no complaints and they were
even nominated for the coveted BBB Torch award for ethics. They have 35K members (and
growing) and if they were in the business of taking your money and not providing services, our
tried-and-true free market system would crush them like a bug. They’re totally transparent with
their pricing and their guidelines. Plus, all operations are 100% US-based in Austin, TX and you
can call them and they’ll answer. Think about how all of those points compare to your current
health insurance provider!
But I need regulation. I need a government-backed promise to raid the offices of anyone
who has agreed to pay my medical bill but fails to do so. Doesn’t sound like Sedera is
regulated. What gives?
I thought the same thing. But after some research, I saw that filing an insurance claim isn’t as
straightforward as you might think. Not to get all negative, but a lawyer friend in this field has
told me horror stories about clients having to sue insurers over coverage and out-of-network
As for Sedera, they’re not insurance in any legal sense, but they still have to worry about
regulation because states can easily shut them out. As a result, they work closely with
government officials in each state.
What’s with this Direct Primary Care business?
A doctor who knows you by name and not by patient ID. Win-win: happier patients, happier
doctors (in case you haven’t noticed many doctors are pretty burned out these days and are
looking for an ejector button of their own). PLUS: You get a 14.5% discount off your Sedera
membership upon DPC enrollment. We are planning an article on DPC membership on our site
What about dental/vision? What about free annual checkups?
Sedera helps you contain large unexpected medical costs. That’s it. With insurance, you may
get a “free” checkup. But if you’re paying $1800 a month when you could be paying $600, do
you really think that’s a good deal? You could buy a brand new flashy mountain bike with that
money. You could buy a truckload of organic kale and a Vitamix blender with that money. Every.
Okay, you’ve shown me the palaces, now show me your prisons.
Nothing bad that we’ve experienced or heard about. It’s pretty straightforward. Read the
guidelines. Don’t lie about pre-existing conditions. Don’t get injured while doing something
illegal. Take responsibility for your health to minimize risk.
But how can Sedera solve the problem of medical cost inflation?
It can’t. Apparently, this problem is like gravity in this country. We could rocket out, but we refuse
to. So Sedera, which has over 25 years of experience in negotiating medical bills, will negotiate
on your behalf. They’re good and they pay fast (14 to 60 days). Cash talks and you often get the
cash (self-pay) discount.
Remember, hospitals and doctors are just running a business and they are very interested in
reducing their costs by getting paid quickly. In exchange, they often give preferential pricing and
that’s what Sedera specializes in. Furthermore, being part of a community of members who take
personal responsibility for their health makes you less susceptible to carrying the cost of
irresponsible behavior. Just like car insurance, you pay less for a blue Honda Civic (low rate of
accidents/theft) than you do for a red Corvette…think of Sedera as a cohort of members with
good driving records and sensible vehicles (aka they make an effort to stay healthy and avoid
How long does it take to sign up, and what will I need?
If you’re a smart person (of course you are) who has filled out an online form before, then I’d
suggest setting aside 15 minutes to go through the educational materials and then sign up at
this link: sedera.community/thefireguild2. You’ll need your SSN, bank account info, a credit
card and some basic knowledge about your family.
When does membership start?
Membership starts immediately, just like signing up for car insurance, Spotify, etc. Alternatively,
you can sign up today and choose your future membership start date.
Are there limitations on when I can sign up? Can I jump in the day after I quit my job,
regardless of when that is? (Congratulations, btw!)
There’s no “open enrollment” or any other limitations – it’s very straightforward (as it should be).
Skip COBRA and join up, or finally get some peace of mind as a gig worker or self-employed
person. You can pay with a credit card or your bank account and you will be billed monthly on
the date you signed up. It’s all automated and very much like other memberships you’re familiar
with (and unlike the reams of legalese and paperwork you’ve maybe dealt with in the past).
What’s included without meeting my Initial Unshareable Amount?
Well-patient mammograms, colonoscopies, flu shots and other wellness events are included
100% – no need to reach your IUA first. You can read about what’s specifically allowed (and
not) in Sedera’s Membership Guidelines. My 54-year-old wife had a routine mammogram. She
made the appointment, stated she was an uninsured, cash-pay customer and secured a
fantastic price which she paid for with her credit card. We submitted the two bills (imaging and
the “reading” of the images) to Sedera via our private portal (snapped pics with the mobile
phone) and received payment (check or direct deposit, your choice) 18 days later.
What if I need a million dollar total head transplant? Are there any caps to how much will
There is NO UPPER LIMIT on a Need. Period. How can this be? Sedera has an entire group
that helps negotiate pricing on major health events, and as such, that huge price is usually
significantly reduced. Remember, hospitals and other health service providers are just running a
business and given the chance to negotiate for faster payment often means they’ll offer a better
I signed up for a $1500 IUA; does that mean I have to pay that much of each bill I submit?
No way! Your $1500 IUA is per Need. So if you have a heart attack, that counts as a single
need. You may continue to get treatment for that issue for a year (or more); all bills associated
with that Need are included under your single IUA. You pay $1500 and the rest is shared.
What about pre-existing conditions (PEC)?
You CAN sign up for Sedera if you have a PEC.
Sedera limits sharing for any PEC treated in the 3 years before signing up. You can totally sign
up and have everything else shared, just not that condition during your first year of Membership.
However, during the second year, you are eligible for $15k of Sharing, the third year $30k, and
once you start your fourth year of membership, it would be fully shareable.
What else is excluded?
A quick answer is: Anything illegal. For example, if you are injured doing an illegal activity or
from the use of illegal drugs, you’re on your own. I like this feature: It makes fellow members
accountable for their own actions. There are detailed specifics in the guidelines, which are
thorough but written in everyday language and are required reading before you sign up. Sedera
doesn’t want just anyone – members are committed to taking responsibility for their own health
and by extension, the other members of the community.
What’s my maximum annual expense?
You’re responsible for your IUA for each Need, but only for a maximum of three Needs per year
(including for Families). For example, if you have a $500 IUA you pay the first $500 for your
broken leg on January 1st, the first $500 for your kidney stones in March and the first $500 for
your broken arm in April. After that (what a bad year!), you are no longer responsible for any
more IUAs on subsequent needs (if you continue to have bad luck). Your total out-of-pocket
expense for your three bouts of bad karma payback will cost a total of $1500, regardless of how
long your recovery is or how much it costs.
In contrast, I know someone with conventional health insurance whose baby underwent multiple
procedures for ear implants. Because this occurred both in the fall of one year and spring of the
next, they got absolutely hosed when the bills came. The calendar year reset meant they had to
meet the deductible TWICE! That’s just stupid.
What about maternity and pregnancy costs?
This is a big question and deserves a big answer but here’s the quick and general response:
Sedera considers births, maternity and prenatal care shareable, but all pregnancies are subject
to a $5K IUA ($7500 for non-emergency C-sections). This is to discourage people who join just
to have their maternity costs shared, then leave the community. Non medically-necessary
terminations are not shareable.
What’s their stance on prescriptions?
Sedera separates medications into two groups: curative and maintenance. Loosely explained,
they share the former until you’re better. If a medication is initially prescribed to cure an ailment,
it’s included, but if it becomes a maintenance drug, then only 120 days of that prescription will
be shared. Some simple examples of curative drugs are antibiotics, pain meds and even
chemotherapy. Statins, insulin and birth control (unless prescribed for a curative issue) would be
considered maintenance drugs. Also, as an active member, you have access to Sedera’s RX
Marketplace, where you’ll find incredible resources for inexpensive prescriptions, diabetic
supplies and more (often cheaper than the co-pays you’re probably currently paying with
If you’re a reader: www.thefireguild.com has links to all of the Sedera guidelines, FAQs and
If you’re a talker: Go to our site and call us. We are two retired guys who like spreading the word
and if we can’t answer your question off the bat, we’ll get you an answer quickly.
If you’re a looker: Again, our site has some fun infographics about how Sedera works.
If you’re a lurker: Just watch the comments below and see what comes up!
Carl end note: When I first discovered FIRE, I thought it was a scam. I was certain that this MMM entity I had stumbled across on the internet was some kind of cartoon character promoting an MLM.
I was similarly skeptical of health care sharing organizations. However, I’ve come to believe Sedera is the real deal.
When the time comes for Mindy to leave her work, we’ll sign up without hesitation.
Health insurance in America is a mess and I like to ponder how it could be untangled. I believe that sharing organizations like Sedera may finally be the competition needed to give traditional insurance a kick in the ass.
If you’re skeptical or have further questions, please send a note to Jon and Bill.
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