The Waiver III: Out of Our Purview

OUT OF
PURVIEW
★

Series · Post III of III — Out of Our Purview  ·  Forensic System Architecture  ·  Sub Verbis · Vera

Out of Our Purview

What a woman dying of cancer, a family that had already run this exact scheme once before, and a state regulator on the record all confirm about the gap Congress left in the law in 2010

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Randy Gipe · Claude / Anthropic  ·  2026  ·  Trium Publishing House Limited  ·  Forensic System Architecture

Layer III · Insulation

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Bonnie Martin kept her illness quiet for as long as she could. In October 2018, at a family gathering in Annapolis, Maryland, she began hemorrhaging — a tumor had burst through the wall of her uterus. Doctors performed an emergency hysterectomy. She needed chemotherapy and radiation. She wasn't religious, but she'd joined Liberty HealthShare for her coverage, and found comfort in its pledge to carry one another's burdens.

Treatment pushed her cancer into remission. Eighteen months later it returned, in her lungs. She was dying. Liberty had covered her bills at first. Then, without warning or explanation, the payments stopped. She faced $10,000 in unpaid charges. A lifetime of pristine credit gave way to creditors calling constantly. She forwarded the overdue notices to Liberty, writing across one of them in pen: "WHY HAS THIS NOT BEEN PAID?" Martin died in July 2022, at 63. Liberty never settled the bills she'd spent her last months begging them to pay.

What Martin didn't know was that her money had gone to a family with direct, documented experience in exactly this outcome. Court records identify Daniel J. Beers, the patriarch who later helped build Liberty, as a leading figure in a separate scheme in the 1990s that siphoned tens of millions of dollars from a different health-sharing ministry's members. It wasn't Beers' first time watching a ministry's books get creative, either — the Brotherhood's own board eventually discovered that Hawthorn's newsletter had been concealing payments to an outside vendor, Benevolent Health Systems, in its filings to the IRS.

Liberty ran the same play. Between 2015 and 2021, the ministry paid at least $105 million to Cost Sharing Solutions — a marketing and enrollment firm owned by Beers' sons and a family friend, Brandon Fabris — and at least $35 million more to Medical Cost Solutions, a bill-negotiation firm that passed from Liberty's own CEO to Fabris' father. Comparing Liberty's internal accounting against its public IRS filings from 2017 to 2019, investigators found some of those payments reported instead as direct medical costs paid to members. The concealment method wasn't new. It was inherited.

$140 MILLION

Paid to vendors owned by Beers family members and friends, 2015–2021

During those same years, thousands of members' medical bills went unpaid — including the woman whose sisters now lead the class-action lawsuit against the ministry and the family that ran it.

Fabris was a Liberty official at the same time he helped determine how much Liberty paid his own company. When another executive raised questions about the size of the payments to Cost Sharing Solutions, Beers confronted him and yelled at him for asking, according to a complaint later filed with Ohio fraud investigators. None of this required deception at the level of the individual transaction. It required only that nobody with authority to intervene was positioned to ask.

What an Insurer Must Do vs. What a Ministry Never Has To

The same $140 million, measured against two entirely different sets of rules.

A Regulated Insurance Company

Federally required to spend at least 80 cents of every dollar collected on members' actual medical care, or refund the difference. Must cover pre-existing conditions and a defined set of essential health benefits. Must cap members' annual out-of-pocket costs. A denied claim can be appealed to a state insurance commissioner with authority to investigate and enforce.

A Certified Health Care Sharing Ministry

No spending floor of any kind. Not required to cover pre-existing conditions or any specific benefit. No cap on a member's out-of-pocket exposure. A denied or simply ignored claim has no regulator with authority to intervene — by design, not by oversight.

From a Family Compound to a Class Action

EARLY 1990s

The Brotherhood's board discovers concealed payments to an outside vendor in its IRS filings. Daniel J. Beers is separately identified in court records as central to a distinct scheme that siphoned tens of millions from a ministry's members.

2014

Beers and family incorporate Liberty HealthShare (Post II). It begins directing tens of millions of dollars a year to two vendors the family and friends also own.

2015–2021

Liberty pays at least $140 million combined to Cost Sharing Solutions and Medical Cost Solutions. Internal accounting compared against IRS filings shows some of it concealed as direct medical costs paid to members.

OCT 2018

Bonnie Martin is diagnosed and joins Liberty for coverage. The Ohio Attorney General's office opens its investigation into Liberty the same year.

2021

Liberty settles with the Ohio AG for roughly $6.5 million over five years and severs all ties with the Beers family. A group of members, led by Martin's sisters, files a class-action lawsuit against Liberty, the family, and both vendors.

JUL 2022

Bonnie Martin dies at 63. Her bills — roughly $10,000 — are never paid, even after the settlement and the severance.

TODAY

The family is in arrears on its own settlement payments. The IRS has placed liens on Beers' sons and Fabris for millions in unpaid taxes. Ranch acreage and the family's stake in a small airline have both been sold to raise cash.

Evidence from the Edges What Makes This Structural Rather Than Personal

Liberty is not the only certified ministry regulators have had to act against. Sharity Ministries, once among the industry's largest, filed for bankruptcy and dissolved in 2021 under multi-state investigation for failing to pay members' bills. The Department of Justice separately seized the assets of a small Missouri ministry, Medical Cost Sharing Inc., over allegations of fraud and self-enrichment. None of these organizations share ownership. What they share is the exemption that lets all of them operate the same way.

The $6.5 million Liberty's leadership agreed to pay in 2021 is real money to the members who might eventually see some of it. Set against the $140 million already documented moving to family-controlled vendors, it is roughly 4.6 cents on the dollar — and the family has since fallen behind on paying even that.

Washington State's insurance regulator has taken formal action against health care sharing ministries and still describes its own authority as narrower than most members assume. Consumer complaints against the industry there have piled up specifically because the office that receives them cannot compel a ministry to pay what it owes — a gap built into the exemption itself, not a failure of enforcement.

"They want us to go after the health care sharing ministry, for them to pay their claim. That's out of our purview."

— Michael Marchand, Deputy Commissioner, Washington State Office of the Insurance Commissioner

This post does not argue that every health care sharing ministry operates the way Liberty did, or that Cost Sharing Solutions and Medical Cost Solutions were the only vendors capable of exploiting the gap Congress left open in 2010. The finding across all three parts of this series is simpler, and by now should be unsurprising: a religious exemption built for a bounded, three-century-old community that polices its own was widened, with no verification mechanism attached, for anyone able to file the right paperwork. The people who walked through first were a family whose earlier generation had already run this exact play once, using the same concealment method, on the same kind of victim.

The Amish and Mennonite communities whose name gave this exemption its original legitimacy are not in this story at all, past the first post. That absence is the finding.

This concludes a three-part series. Post I — The Signature — traces the exemption to its origin in a 1965 tax provision built for the Amish. Post II — Two Hundred Words — follows it into a 2010 law that required no verification of who used it. This post is where those two threads converge.

FSA Wall — The Waiver, Part III

Bonnie Martin's diagnosis, the collapse of Liberty's payments toward her treatment, her handwritten and emailed pleas, and her death in July 2022 are drawn from ProPublica's February 2023 investigation, "How Liberty HealthShare Left Thousands With Debt as It Built a Family Empire," Tier 1, corroborated by its syndicated republication at Cleveland Scene, Talking Points Memo, Salon, and MinistryWatch — treated as one source, not several. The vendor payment figures — at least $105 million to Cost Sharing Solutions and at least $35 million to Medical Cost Solutions between 2015 and 2021, and the concealment of some of those payments in IRS filings from 2017 to 2019 — are drawn from the same investigation's direct comparison of Liberty's internal accounting against its public tax filings. Daniel J. Beers' identification as a leading figure in a distinct 1990s health-sharing ministry fraud, and the Brotherhood's own concealment of payments to Benevolent Health Systems, are drawn from the same investigation's account of the family's history prior to Liberty's founding. The 2021 Ohio Attorney General settlement, the $6.5 million settlement figure, the family's subsequent arrears, the IRS liens against Beers' sons and Brandon Fabris, and the sale of ranch acreage and the family's airline stake are drawn from ProPublica's May and December 2023 follow-up reporting, corroborated by its syndication at HealthLeaders Media and Raw Story. The Sharity Ministries bankruptcy and the Justice Department's seizure of Medical Cost Sharing Inc.'s assets are drawn from the same set of ProPublica investigations. Washington State's complaint data, the $150,000 OneShare fine, and Deputy Commissioner Michael Marchand's on-record statement are drawn from KING 5 Investigators' February 2024 reporting, a separate Tier 1 source.

The Waiver II: Two Hundred Words

200
WORDS
★

Series · Post II of III — Two Hundred Words  ·  Forensic System Architecture  ·  Sub Verbis · Vera

Two Hundred Words

How a lobbyist, a senator, and a colleague's death carried a religious exemption into federal law — and delivered it, four years later, to a family already once implicated in the collapse of the model it was named for

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Randy Gipe · Claude / Anthropic  ·  2026  ·  Trium Publishing House Limited  ·  Forensic System Architecture

Layer II · Conduit

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In 2007, the trade group formed in the wake of the Christian Brotherhood Newsletter's collapse hired a lobbyist named Joe Guarino. His mandate was narrow and, on paper, unlikely to succeed: get health care sharing ministries carved out of whatever health care reform Washington eventually passed. He was, by his own account, badly outmatched by the health insurance industry's lobbying operation. He kept working anyway.

It wasn't the industry's first fight of this kind. In the 1990s, as state regulators began scrutinizing the Brotherhood directly — Arkansas's attorney general once said it had every mark of a "phony con job" — the ministry hired its own lobbyists and pushed state legislatures to pass safe-harbor laws exempting cost-sharing arrangements from insurance regulation entirely. By 1994, ten states had done so. Guarino picked up that same state-by-state campaign in 2007, hiring local lobbyists in state after state. By 2008, fifteen states had a safe harbor on the books. None of it drew national attention. It didn't need to.

The real opportunity came in 2009, when President Obama's health care overhaul put a federal individual mandate on the table — a requirement that every American carry insurance or pay a penalty. For an industry whose entire membership had joined specifically because they didn't want to carry insurance, this was existential. Guarino met with roughly 150 congressional staffers over the following months. The break came through an Iowa state legislator he knew, who connected him to her home-state senator: Chuck Grassley, a senior Republican on the Senate Finance Committee.

Grassley and Guarino built language exempting health care sharing ministry members from the mandate on religious grounds, and Grassley worked it into the Senate's version of the bill. The House version, favored by most Democrats, didn't include it. Had the House bill prevailed in the final negotiations between the chambers, the exemption — and, by the trade association's own later account, quite possibly the industry along with it — would have died in conference.

From State Safe Harbors to a Senate Vote

1994

Facing early state scrutiny of the Christian Brotherhood Newsletter, ministry-hired lobbyists secure safe-harbor exemptions from insurance regulation in ten states.

2001

The Brotherhood collapses in scandal (Post I). The Alliance of Health Care Sharing Ministries forms among its successor organizations.

2007

The Alliance hires lobbyist Joe Guarino to pursue a federal exemption ahead of anticipated health care reform.

2008

Guarino's state-by-state campaign brings the safe-harbor total to fifteen states.

AUG 2009

Sen. Ted Kennedy dies, costing Senate Democrats their filibuster-proof majority.

MAR 2010

Unable to reconcile a revised bill, the House passes the Senate's version unchanged. Guarino and Grassley's exemption becomes law.

2014

Dan Beers — Bruce Hawthorn's nephew — founds Liberty HealthShare under the new federal protection.

The mandate itself never touched most Americans' daily lives — a majority already had coverage through an employer, Medicare, or Medicaid. The exemption did something quieter and more consequential. Unlike Form 4029, it required no sect membership, no HHS certification, none of the verification an actual Amish applicant has to clear. It required a 501(c)(3), a shared statement of belief, and an operating history that reached back to 1999. Membership in health care sharing ministries went from roughly 100,000 people the year the exemption passed to over a million within eight years.

200 WORDS

The length of the exemption inserted into a 900-page bill

That was the entire legislative footprint required to reroute a fast-growing national industry around federal insurance regulation, for good.

The provision didn't specify who could walk through the door it opened. In 2014, one of the people who did was Dan Beers of Canton, Ohio — the nephew and mentee of Bruce Hawthorn, the same Ohio preacher whose newsletter collapsed in scandal thirteen years earlier.

Beers and his family incorporated a new sharing ministry that year, built by combining two existing nonprofit shells — the Gospel Light Mennonite Church Medical Aid Plan and the National Coalition of Health Care Sharing Ministries — under a new name: Liberty HealthShare. Its CEO, Dale Bellis, had been the Brotherhood's communications director. Its vice president, Drudy Abel, was Beers' sister and another Brotherhood alum. A former Liberty chief medical officer later told investigators he was troubled to discover that nearly every one of the ministry's top executives had worked at the Brotherhood before it collapsed.

Two Generations, One Ministry

What changed between the founding of the first organization and the founding of the second.

Christian Brotherhood Newsletter (1982)

Founded by Bruce Hawthorn after personal tragedy. No federal exemption existed yet, and only a handful of state safe-harbor laws. Collapsed in 2001 under an $34 million backlog, a state Attorney General lawsuit, and over $700,000 in undisclosed diverted funds.

Liberty HealthShare (2014)

Founded by Dan Beers — Hawthorn's nephew and mentee — four years after the ACA exemption made cost-sharing ministries federally viable nationwide. Leadership drawn substantially from former Brotherhood executives, operating under the exact federal and state protections Hawthorn's generation spent the 1990s fighting to build.

Evidence from the Edges What the Contested Record Actually Shows

At least three separate people have publicly taken credit for crafting the ACA's health care sharing ministry exemption — Guarino, in one investigation's account; a second lobbyist named Martin Hoyt, in a PBS interview; and congressional staff crediting then-Rep. Tom Perriello and Sen. Max Baucus, in earlier reporting. That the authorship itself is contested is not a contradiction — it's confirmation. A provision drafted in the open, fought over publicly, doesn't produce three separate people claiming sole credit years later. This one did, because almost no one outside the process was watching it happen.

The mechanism that actually delivered it was not persuasion. It was arithmetic. Sen. Kennedy's death in August 2009 cost Senate Democrats the votes needed to pass a revised bill through the normal process. A health event unrelated to health care policy is what put the exemption into law — not the merits of the argument for it.

Liberty HealthShare's founding shell wasn't invented from nothing, either. One of the two nonprofits merged to create it — the Gospel Light Mennonite Church Medical Aid Plan — carried a genuine Mennonite charter and history. The new venture didn't just inherit a legal exemption built in the name of communities like this one. It inherited an actual piece of one, folded directly into its corporate structure.

The 1965 statute asked who was in the community. The 2010 statute never had to ask.

— The Waiver, Part II

This post does not argue that Chuck Grassley or Joe Guarino set out to hand a family already implicated in one ministry's collapse the tools to build another. Legislative intent isn't the finding here, and nothing in the record shows either man knew who would eventually use the provision they built. What's demonstrable is narrower: the exemption they wrote required no verification of who was using it, and the first major test of that omission arrived within four years, wearing a familiar name.

This is Post II of a three-part series. Post III — Out of Our Purview — follows the money into Liberty HealthShare itself: the $140 million paid to vendors the Beers family also controlled, the coverage ratio that would be illegal for an insurance company, and what a state regulator says on the record when asked why none of it can be stopped.

FSA Wall — The Waiver, Part II

The Guarino lobbying campaign — his 2007 hiring by the Alliance of Health Care Sharing Ministries, the roughly 150 congressional staffer meetings, the connection to Sen. Grassley through an Iowa state legislator, and the exemption's survival through the mechanics of Sen. Kennedy's death — is drawn from ProPublica's December 2023 investigation, "How Obamacare Enabled a Multibillion-Dollar Christian Health Care Cash Grab," corroborated by its syndicated republication at Talking Points Memo, both treated as a single Tier 1 source rather than independent corroboration. The competing lobbyist-credit claim naming Martin Hoyt is drawn from a January 2018 PBS NewsHour report. The 1994 and 2008 state safe-harbor law counts, and the Arkansas Attorney General's characterization of the Brotherhood, are drawn from ProPublica's February 2023 investigation, "How Liberty HealthShare Left Thousands With Debt." Dan Beers' identification as Bruce Hawthorn's nephew and mentee, Liberty's 2014 founding through the merger of the Gospel Light Mennonite Church Medical Aid Plan and the National Coalition of Health Care Sharing Ministries, and the shared Brotherhood alumni among its founding leadership are drawn from the same investigation, cross-checked against its syndicated appearances at Cleveland Scene and MinistryWatch — again treated as one source, not several. Membership growth figures, roughly 100,000 in 2010 to over one million by 2018, are drawn from Wikipedia's health care sharing ministry entry, cross-confirmed against PBS NewsHour's reporting of Alliance-provided figures.

The Waiver I: The Signature

FORM
4029
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Series · Post I of III — The Signature  ·  Forensic System Architecture  ·  Sub Verbis · Vera

The Waiver

A 1965 tax provision built for a three-century-old religious tradition, and the newsletter — begun sixteen years later, three hundred miles away, by someone outside that tradition entirely — that borrowed its shape without inheriting what made it work

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Randy Gipe · Claude / Anthropic  ·  2026  ·  Trium Publishing House Limited  ·  Forensic System Architecture

Layer I · Source

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In 1965, the same year Congress created Medicare, it also wrote a narrow way out of it. Buried in that year's Social Security Amendments is a provision, now codified at IRC §1402(g)(1), that lets a self-employed person leave the entire system behind — at a price almost no one else would agree to pay.

The mechanism is a single federal form. To qualify, an applicant must belong to a religious sect whose established teachings oppose accepting insurance of any kind — not just health coverage, but life, disability, and retirement insurance too. The Secretary of Health and Human Services has to certify that the sect actually holds this belief, and separately certify that its members genuinely provide for their own dependents, elderly, and disabled without leaning on the public system they are declining.

For the Old Order Amish, and the conservative Mennonite and Brethren communities this provision was built around, the objection isn't financial. Accepting an insurance payout substitutes a contract with an institution for trust in providence and obligation to one's own community. When a barn burns or a hospital bill arrives, the community absorbs it directly — a deacon, a church notice, a collection taken on a Sunday. No actuary. No claims department. It has worked this way for over three centuries, because everyone in the risk pool knows everyone else, which is the entire reason it functions without a contract.

Two Signatures

What was actually required of the person signing, sixteen years and three hundred miles apart.

Form 4029 (1965)

Applicant must be a member of an IRS-recognized religious sect, certified by the Secretary of Health and Human Services as conscientiously opposed to insurance and structurally capable of caring for its own dependents. In exchange, the signer permanently and irrevocably waives any and all rights to Social Security or Medicare benefits — retirement, disability, survivor, and hospital coverage alike. Enforced, in practice, by a three-century-old community in which reputation and church standing are directly at stake.

CBN Subscription Card (1982)

Applicant must be willing to pay a monthly fee. No sect membership, no certification, no vetting of any kind. In exchange, the subscriber signs an acknowledgment that the newsletter has no legal obligation to pay any claim — sharing is voluntary and unenforceable. No outside body reviewed the arrangement until a state Attorney General intervened, sixteen years after it began.

Sixteen years after Congress wrote that exemption, a very different kind of mutual aid was born three hundred miles away — and it borrowed the outward shape of the Amish model without inheriting the structure that makes it work.

In October 1981, Bruce Hawthorn — the son of a Wesleyan Methodist minister, running a rescue mission for alcoholics in Barberton, Ohio — lost his wife and young daughter when a truck struck the family's car. Facing medical bills of his own, he mentioned the crash in his mission's newsletter. Strangers sent cash, citing Galatians 6:2: bear one another's burdens. The following year he turned that response into a business model — a newsletter subscription in which members' medical needs were published and shared voluntarily, with no underwriting, no contract, and no guarantee that anything would ever be paid.

From a Rescue Mission Newsletter to a Jury Verdict

1965

Congress passes IRC §1402(g)(1) — an exemption from Social Security and Medicare taxes for members of a certified religious sect, contingent on permanently waiving all benefits.

OCT 1981

Bruce Hawthorn's wife and daughter are killed in a car crash outside Barberton, Ohio. Word of his medical bills spreads through his rescue mission's newsletter.

1982

Hawthorn launches the Christian Brotherhood Newsletter — $75 a month, no underwriting, no contract, needs published and shared voluntarily.

1997

Backlogged, unpaid medical bills climb into the tens of millions. The Ohio Attorney General sues Hawthorn and the ministry.

2001

Investigators find more than $700,000 diverted to personal expenses, undisclosed in the ministry's IRS filings. The scandal becomes public.

2004

A jury returns a verdict of roughly $14.7 million against Hawthorn and family members for misappropriating charitable funds.

TODAY

The organization reorganizes and continues operating as Christian Healthcare Ministries — by its own account, the oldest health-sharing ministry in the country.

The newsletter looked like the Amish model. It even cited the same scripture. What it didn't have was the thing that actually makes the Amish version work — a bounded, intergenerational community where reputation, land, and church standing are on the line for everyone who doesn't pay in. CBN had a mailing list, a founder with sole signing authority over the funds, and, within fifteen years, tens of millions of dollars a year moving through accounts nobody outside the organization could see.

$34 MILLION

Backlogged, unpaid medical bills accumulated by the Christian Brotherhood Newsletter by the late 1990s

The organization that produced this backlog did not close. It reorganized and continues operating today, under a different name, as one of the industry's largest and oldest players.

What happened next is where this story usually ends, in most tellings. It's worth going one layer further.

Evidence from the Edges What the Certification Gap Actually Protected Against

Form 4029 requires two separate federal certifications before an exemption is even granted — that the sect's opposition to insurance is a genuine, established teaching, and that the sect can actually provide for its own dependents without the system it's declining. The Christian Brotherhood Newsletter satisfied neither requirement, because neither requirement applied to it. It was never a certified religious sect. It was a subscription product, open to anyone who could send a check.

The Amish system's real safeguard was never a form or a regulator. It was a closed, multigenerational community in which the person who doesn't pay their share is still going to be at church next Sunday, next to the people who covered for them. CBN had no equivalent mechanism, at any point in its history — its "members" were strangers to each other by design, which is precisely what let a backlog reach $34 million before anyone with authority to intervene noticed.

Christian Healthcare Ministries today describes itself as the nation's oldest continuously operating health-sharing organization — a framing that is accurate and, read carefully, also the entire point: the founding scandal is not a chapter this industry moved past. It's the chapter the industry's oldest and largest member organization was built directly on top of.

Only one of those was built to hold weight.

— The Waiver, Part I

This post does not argue that Christian Healthcare Ministries or its peers are frauds today, or that Amish and Mennonite communities bear any responsibility for what a newsletter three hundred miles away did in their tradition's name. The finding here is narrower and more specific: a legal exemption built for a certified, bounded, three-century-old religious community turned out to be available, without modification, the moment someone entirely outside that community decided to build a subscription business that merely looked like it. Nothing in the 1965 statute anticipated that. Nothing in it prevented it, either.

This is Post I of a three-part series. Post II — Two Hundred Words — follows the exemption from Form 4029 into the Affordable Care Act, where a lobbyist and a sympathetic senator wrote a far broader version of it into federal law in 2010, for an industry with almost no connection to the Amish. Post III — Out of Our Purview — documents what state regulators say, on the record, when asked why they can't force these organizations to pay a denied claim.

FSA Wall — The Waiver, Part I

The mechanics of IRC §1402(g)(1) and IRS Form 4029 — the dual Secretary of Health and Human Services certification requirement, and the full, permanent waiver of Title II and Title XVIII benefits — are drawn directly from the statute and the form's own instructions, Tier 1 primary sources. The theological basis for Amish and Mennonite objection to commercial insurance is corroborated across the Young Center for Anabaptist and Pietist Studies at Elizabethtown College and Anabaptist World's 2017 reporting on the growth of religious cost-sharing arrangements. Bruce Hawthorn's founding of the Christian Brotherhood Newsletter, the October 1981 accident, the newsletter's original $75 subscription fee, and its citation of Galatians 6:2 are drawn from Christianity Today's contemporaneous 2001 reporting, "Health Plan Accused." The scale of the backlog, the more than $700,000 in diverted funds, the 1997 Ohio Attorney General lawsuit, and the 2004 jury verdict are drawn from ProPublica's 2023 investigative reporting into the health-sharing ministry industry, cross-corroborated against Christianity Today's original coverage. Christian Healthcare Ministries' continuous operation and its own account of its founding are drawn from the organization's published institutional history — read here as a Tier 2 self-interested source, included as a data point rather than a verdict.