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Peer-to-Peer Insurance Sharing: Unleash the Power of Social Payments


If I would have told you five years ago that teenagers would use their cellphones to summon strangers off of the internet and then hop into their car for a ride would you have believed me?


Would you have thought that parents would actually prefer their kids get rides with strangers over the possibility of a friend drunk driving?


From ride sharing applications like Uber to the constant buzz about blockchain cryptocurrencies like Bitcoin, there is no doubt that distributed networks have reshaped our world. Unfortunately traditional industries have not followed suit. While Americans once had to rely on a sprawling and centralized health insurance companies they can now benefit from healthcare sharing built on a distributed P2P network.


It’s no secret that insurance companies are heavily regulated at the local, state, and federal level, and there is a substantial cost involved with backing their policies and overhead costs. Even as insurance works to be more affordable, the current payment model simply doesn’t allow for it.


Health care sharing is a medical financing and payments model that serves as an alternative to the high cost of health insurance. Based on biblical principles and proven in the faith community, health care sharing has quickly become the most effective way for communities to access affordable care.


What is Peer-to-Peer Sharing & Why It Will Revolutionize Healthcare


With the economic prospects many Americans face and the uneven roll out of the Affordable Care Act (ACA) throughout the US many families are wondering whether better healthcare options exist. Luckily the efficiencies of cutting edge technology and peer driven networks can create better insurance options for individuals and communities.


What Does Peer-to-Peer Mean?


Traditionally in computing or networking, Peer-to-Peer or (P2P) implies a distributed network application whose architecture splits tasks & workloads between “peers” in the network. All of the peers, or nodes, in the system can share in the work. From a computing standpoint the benefit is that every individual node in the system only needs to be as strong as the average workload. In a P2P network, when a single peer gets overtaxed it can rely on a helping hand from another member node.


P2P networks share the same concept as the old saying, many hands make light work. In the Peer-to-peer sharing model the overall system can be far more efficient because a single peer, or node, only needs a minimal amount of processing power and can rely on other nodes in the system when it is overworked.


Conceptually P2P networks function much like great societies. Members all contribute and help each other whenever it is needed. If you keep reading, you’ll see how this concept embedded within insurance makes healthcare exponentially more efficient.


Insurance Works, But Insurance Companies Don’t Work For You


People often forget that traditional insurance companies exist to make a profit. They have shareholders, and workers to pay like any other company. And that’s fine.


But the problem comes when it’s time to make sure you, or your family member, or even your child has the best quality care.


Unfortunately profit margins, and quality care don’t always mesh.


In terms of first principles insurance is perfectly logical. Given a large enough group, a small contribution from every member can cover an occasional large need from a small number of claimants.


Naturally traditional insurance companies have collected a fee for the administrative costs of this system. The conflict of interest might arise, for you the buyer, once you realize that in order to increase their profits, this company has every incentive to limit the amount of claims paid out.


Worse still, government regulations around Medical Loss Ratios (MLR)  actually give companies incentives to raise prices, or prevent their interest from participating in certain markets.


P2P Insurance Sharing is Fundamentally Better

Traditional insurance is efficient, but it also leave individuals at the mercy of a few insurance players. Hierarchical and highly efficient systems generated tremendous wealth for humanity throughout the 19th and 20th Century. Given the technology at the time, centralizing bargaining power with one single “node” in the system made total sense. But with the help of modern technology the P2P Insurance model can distribute the risk of insurance throughout the network without the profit motive of a single company.

The value of distributed networks is that no single node  matters than any other. Your neighbor, that family down the block, or your own kids all have equal prioritization within the network. Since the system covers the entire network, you don’t insurance agents or costly infrastructure. You get the satisfaction of lending a helping hand within your community as easily as you could send a payment over a tool like Venmo.

Social Payments Conquer Medical Bills Without Insurance


Peer-to-peer insurance models can gain further efficiencies when you consider other fundamentals of the system. This system is essentially a “social payment” model that gives members the option to customize what their health care covers, as well as have 100% of their premium dollars go towards medical services rather than an insurance company’s administrative overhead costs.

Social Payments through Peer to Peer Insurance Will Disrupt the Insurance Industry


To understand the advantages of peer-to-peer health care sharing, it is critical to know that it is more than just a fad—it is a working concept that is proven to save money and transform how people pay for medical expenses.


The key benefits of the P2P sharing model includes decreasing overhead costs, increasing transparency, reducing inefficiencies across the board, and minimizing the conflict that exists between insurance carriers and policyholders throughout the claim filing process. Best still members who form their own groups get the personal satisfaction of directly aiding members of their own community.


Four Benefits of Peer-to-Peer Healthcare Sharing that Traditional Insurance Can’t Match:


  1. Health care sharing has no profit expectation. Traditionally insurance companies function to generate revenue. This incentivizes them to limit claims wherever possible, not provide the best quality care.
  2. Health care sharing isn’t insurance. This saves health care sharing organizations from intense regulatory pressures and the cost burden of a traditional company. Better still there are no mandated plans you have to buy into, or coverage that you’re forced to carry as a result of regulation.
  3. P2P insurance gives you the satisfaction of easily helping your community through social payments.
  4. Health care sharing organizations satisfy the ACA individual mandate. Exempting you from penalties and taxes, without forcing you to participate in a plan you don’t want.


Why is Peer to Peer Insurance Such a Powerful Concept?


People are all too aware that the insurance industry is not cost-efficient or easy to navigate.  Most people can agree that the insurance process is daunting and it often doesn’t feel like it protects the best interest of the people paying into it. Many Americans have had enough. But luckily P2P insurance is also easier to use than traditional insurance.


Peer-to-Peer Coverage is Simple


Different shared coverage organizations operate in slightly different ways and they can be religious healthcare sharing or secular in nature. For example, some may only offer one type of insurance, such as home or car insurance, while another may require that the group have a similar focus, such as an interest in heart disease. Some companies also differ in how they use unused claim funds. Some return the money to the policyholder, which is a popular option, while others donate it to charity. The incredible thing about such differences is that people can elect to be part of a group that aligns with their specific interests. It’s the ultimate form of insurance freedom.


Forming A Membership Group


When forming a peer to peer sharing group, members have the unique opportunity to gather like minded individuals such as family members, church or community members, fellow co-workers or employees, etc. This allows peers in the group to craft a policy that aligns with their specific interests.


Monthly Share Contributions


People that follow traditional insurance payment models are already paying premiums every year and often get nothing but peace of mind in return for their financial investment. That investment is usually significantly higher if there are claims. Meaning that if you actually use your insurance, you have to pay more.  This is by far the biggest complaint from insurance policy holders.


It’s frustrating to spend hundreds or thousands of dollars per year for a service that ends up not being used over the course of the year, or having to pay extra in the case that you do need to use it. Depending on the sharing organization you’re a part of you might see extra funds returned or sent to charity. But either way, you as the member just have to pay a set monthly fee that keeps the entire network going.


Member & Peer Matching Becomes Easy at Scale


You might think that this system sounds too good to be true. But given the P2P nature of the system, and the magic of modern technology, receiving and sending payments to other members is as easy as the click of a button.


The Importance & Value of Community Norms


Peer-to-peer sharing relies heavily on quality group formation to achieve affordable and quality care. Group members will know and care for each other, so it’s only reasonable to believe that they will each work in the best interest of the group. The communal nature of the coverage lends health care sharing another advantage over traditional care. As Kaenan Hertz, insurance innovation and financial technology leader at Ernst & Young sums it up, “If you have a group of people who know each other and are willing to pool their funds, this means they have faith in each other’s ability to keep losses down to a minimum, benefiting everyone financially.”


P2P Insurance: Feels Better & It Works Better.


People are gravitating to peer-to-peer insurance, especially for medical costs simply because it makes them feel better. The current state of medical insurance leaves people feeling spent and hopeless. Not only is P2P more affordable when you get down to the bare bones of the operation, but there is the personal aspect of sharing costs with people that they know and love.  This unique method allows people with similar views and values to join their resources, giving a sense of humanity to the often cold and calculating nature of traditional health care coverage.


The major hurdle for P2P insurance sharing has traditionally been technological in nature. Luckily with modern infrastructure a company like Sharable can equip communities  with a transparent payment model for their needs.


You might imagine that health care sharing would be a lot of work, but that is not the case.  Sharing-as-a-ServiceTM supports peers within the health care sharing community by directly matching medical expenses with peers in the system. It’s as easy as sending cash with any  social payment app on your phone. Better still an application like Sharable ConnexTM provides a direct platform for all part of the system to interact directly with each other.


The Rising Tide of Health Care Sharing


Centuries ago, groups of people would pool their money together to pay for the burial costs of members of their groups. Everybody contributed, and everybody benefited. P2P is the same tried and true concept. As Robert Hartwig, Chief Economist and president at the Insurance Information Institute states, “To call your company ‘the first peer-to-peer insurer ‘is off by several centuries.”


With 55% of insurance seekers willing to consider P2P Health insurance

Tim Kunde, co-founder, and managing director or Friendsurance describes, “From the customer view, it is not fair to pay insurance fees year after year, even if you have not made any claims.” Health sharing organizations embrace and understands the root concerns of current insurance, and offer peer-to-peer health care sharing as a solution.


In the last year, $2.5 billion has been raised in the startup efforts to get the P2P model out there as a mainstream insurance payment option. Peer-to-peer companies, such as Lemonade and Friendsurance are listening to consumer complaints, and they are ready to create the solution people are looking for.  As Dan Ariely, Lemonade’s Chief Behavior Officer and Psychology Professor at Duke University indicates, “If you tried to create a system to bring out the worst in humans it would look a lot like the insurance of today.” Ariely went on to say that Lemonade is committed to rebuilding insurance to become the “social good, rather than a necessary evil.”  Similarly, Kunde expresses that Friendsurance’s vision, “is to make insurance more affordable, customer-friendly and fair. There is a great need for user-focused innovations.” With principals such as these being the forefront of P2P companies across the board, people finally have access to insurance that not only works, but that cares.


Peer to Peer Insurance – A Bold New Solution


Peer-to-peer sharing is an option that breathes life back into the insurance industry. People prefer the peace of mind of knowing that their money is going to help fellow members of their group rather than paying the inflated prices of giant insurance companies. It’s a solution that merges the gap between affordability and quality resources while incorporating a sense of humanity missing in traditional insurance options.