Response to Frederic J. Fransen

by Herman Bontrager

Herman Bontrager grew up in a Beachy Amish home in Indiana. He received his M.A. in Sociology from the University of Florida. As secretary of the National Committee for Amish Religious Freedom he has worked with Amish on a variety of religious liberty and other legal matters affecting the Amish. He served 14 years with Mennonite Central Committee as Director of Latin America programs and the International Peace Office. Since 1990 he is CEO of Goodville Mutual Casualty Company in New Holland, Pennsylvania.

Fransen got my attention by mentioning Amish, Muslim, insurance and “two kingdoms.” I grew up Beachy Amish and have continued throughout life to work with Amish in areas of conflict between their way of life (holistic faith) and governmental regulations. The past year and a half I have been working with a Muslim community in Trinidad that wants to start an Islamic (faith-based) insurance, or mutual assistance, organization. Since 1990 I have been working in mutual insurance, including with Mennonite and Amish organizations that began as true mutual aid. And the two kingdoms discussion continues to intrigue me as I observe Mennonites and Amish struggle to hold to the “separate community” ideology while appropriating the economic, cultural, and political benefits of the dominant culture.

Was the Schleitheim statement really an Anabaptist manifesto making the case for state libertarianism on the one hand and communitarianism practiced within the faith community on the other, as Fransen implies? If so, was it a call to be “separate” in all things or only selectively? Does the “two kingdoms” stance have validity if it does not encompass all aspects of the faith community’s life? Fransen calls for Mennonites to set up a faith-based system (mutual aid) to pay for health care within the community of faith but he gives no hint as to whether other parts of our lives ought to be “separate” from the world. Rather than engage the theological and theoretical debate over the “two kingdoms” proposition, I will review how mainstream Mennonite efforts in the past to do insurance as mutual aid have failed.

From 1525 until today the descendants of the radical reformation practiced mutual aid in varying degrees, within the household of faith. Barn-raising became a symbol of the voluntary participation of faith community members in sharing the loss of any member. About 150 years ago Amish and Mennonites in North America began to institutionalize “barn raising” when they organized the first “fire aid” plans. Those plans were built on their religious belief that they must bear each other’s burdens but were also inspired, at least in part, by the mutual insurance company started by Benjamin Franklin in 1730. Many of those original fire aid plans adopted names with the words “mutual aid” or “sharing” or “aid” in them to signify the commitment to helping those of the household of faith.

These formal fire aid plans were available only to members of the church. Those from the church community who felt they were able or wanted to participate in the plans signed up. Annually, or more often if necessary, assessments of the members raised the funds needed to pay for losses. In such “assessable” plans the community chipped in whatever it took. If some were unable to pay their fair share others gave more. Widows received aid even if they could not pay assessments. Over time these plans shifted to setting assessment amounts based on the value of the property that a member wanted covered in the event of a loss.

As modern insurance developed, the members of these aid plans began requesting more comprehensive benefits and services like those available from commercial insurance companies. Sometimes members of these unregulated plans encountered problems such as banks not accepting their fire aid plan coverage for mortgages. Although they were exempt from government insurance regulation, the aid plans responded to this “worldly” competition by adopting standard insurance coverage forms (policies), by collecting premiums before losses occurred and by building up reserves to pay for future losses. Subtly, the emphasis shifted from the community pooling whatever resources it took to restore a member to underwriting members and accepting those who were acceptable risks according to the company standards. Higher risks paid higher premiums and unacceptable risks were not allowed to participate. This was prudent financial practice but no longer mutual aid where any member of the community was covered.

Mennonite Mutual Aid, which began after World War II to provide financial assistance to young men returning from Civilian Public Service, eventually organized a mutual aid plan for medical care. Anyone in the church was eligible to participate. Over time the MMA health care program was forced to implement underwriting to avoid financial ruin. That happened because better health risks discovered they could purchase adequate medical insurance from other companies at less cost. MMA was “selected against” and ended up with higher than average percentages of members with higher than average medical expenses. That drove premium costs higher which motivated even more participants to look for cheaper coverage somewhere else.

Several of these aid plans were started by Mennonite churches (e.g. Virginia Mennonite Aid Plans, Sharing Plans of Lancaster Mennonite Conference, Mennonite Mutual Aid) but most were started by interested groups of Mennonites. Whether official church organizations or not, many people in the Mennonite communities expected these organizations to respond on the basis of the individual’s needs and to accept all church members, not on the basis of their ability to pay or to meet limited risk criteria. Today most of these “mainstream Mennonite” plans have merged into larger regulated insurance companies or gone out of business.

Why have “mutual aid” and “sharing plans” changed or gone out of business? Comparison of mutual aid and mutual insurance may give some clues as to why the “church-wide mutual aid” plan Fransen calls for is not a viable ideal for Mennonites today. Compare the characteristics of “faith-based mutual aid” and mutual insurance in the chart below. The former is the pure form of “bearing one another’s burdens” within a defined faith community while the latter can be made up of any set of like-minded people who commit to spreading risk and sharing in each other’s losses according to officially sanctioned standards and regulations. Mutual insurance is an efficient and effective mechanism for spreading risk and minimizing the catastrophic loss potential for any individual, but it is not mutual aid.

Mutual Aid and Mutual Insurance: Comparative Values and Functions
Mutual Aid in the Faith Community	Mutual Insurance*
Koinonia, holistic community life	Financial contract between legal personalities (individuals or organizations)
Eligible because part of the community	Underwriting: eligibility determined by risk quality
Maintain wholeness of the community	Protect individual assets
Basic needs covered, equality of need	Protect excess wealth as well as basic assets
Sacrificial participation (assessable), whatever it takes	Limited cost (fixed premium payments)
Voluntarily contribute what able	Ability to pay (policy canceled if don’t pay)
Faith in God and community	Probabilistic: based on statistical calculations
Expects good stewardship practices	Promotes loss prevention, stewardship
Unconditional commitment	Financial viability
Community is the reserve; give more if needed	Monetary reserves set aside to pay future claims
Spontaneous, organic; concerned about participant’s total welfare	Formal organization; focus on specific task of economic restoration
Flexible, adaptive	Regulated by government, prescriptive
Treat according to need and ability	Requirement to treat everyone alike, according to contract and laws
Diakonia (service) for all members of the community	Service (Diakonia) to eligible, paying participants

*In mutual insurance companies the policyholders elect the directors and all profits stay in the company. Stock insurance companies serve the same functions as mutual companies, to spread risk, but investors determine who leads the company and are paid dividends (profits).

Some of the reasons Mennonites have moved away from the true, New Testament practice of bearing one another’s burdens for health, property and liability expenses, include:

1. We discovered equal or better insurance coverages are available from commercial insurance companies at a lower cost for people who are the best risks. Paying less became more important than bearing one another’s burdens in the faith community at any cost.
2. Flight of the better risks left our “mutual aid” plans with an abnormal concentration of members with higher loss costs which required higher premium costs. As the number of members declined, each one carried a bigger share of the burden. This resulted in financial losses that the aid plans could not sustain or premium costs members were unable or unwilling to pay.
3. The law of large numbers determines the viability of risk sharing plans. The Mennonite population is limited but possibly large enough to sustain a viable mutual aid plan if all members would participate, including the best, the average, and the poor risks. When loss costs inflate faster than the membership numbers the burden on each member increases. Jumbo claims can be financially catastrophic to a mutual aid plan, exceeding the group’s ability to pay. For many Mennonite plans the membership numbers have been too small to keep the costs affordable.
4. Mutual sharing plans work best when the members have similar lifestyles and economic assets. When the disparity between basic needs and the excess wealth of some members becomes great, the wealthiest lose trust in the plan’s ability to restore them should they suffer major loss and the poorest fear they will be called on to pay more than they can afford. Disparate lifestyles and levels of assets among the members erode commitment to mutual accountability and burden sharing even in the faith community.
5. Territorial and risk class differences (e.g., youthful drivers, urban traffic congestion, hurricane exposure, tornado alley) make it difficult for sharing plans to survive financially if they assess all members the same amount.
6. Loyalty to “church-related” institutions can no longer be taken for granted.
7. Social, occupational, economic, and even political integration of Mennonites into the dominant culture makes us feel at home in mainstream institutions and services and has eroded the sense of being a “separate people” that organize most of our social and economic functions within the faith community.

It is difficult to imagine that at a time when Mennonites in the United States are seeking ever greater acculturation into the dominant culture we could become motivated to break sharply with that trend and pursue a “two kingdoms” modality to cover our health care costs. Maybe if the cost were low enough, we could be persuaded! But it is unlikely such a plan would be less expensive.

In my work with Old Order Amish and Mennonites, I observe sincere efforts to live as separate communities. That includes taking care of their own health, property, and even liability expense needs. Most of the members of these groups claim the federal exemption from participating in the Social Security and Medicare programs. A growing number of the groups have their own aid plans, organized under state self-insurance laws, for auto liability. These plans operate on the basis of the biblical principles of bearing each other’s burdens but many of them are already encountering the same pressures that caused the mainstream Mennonite aid plans to change from mutual aid into regular insurance companies.

Fransen is correct in noting that the Amish have managed to keep control of their health care decisions better than other parts of the Anabaptist family. The Amish still see the “two kingdoms” commitment as applying to all of life, not just health care or use of force. But the mainstream Amish also are changing rapidly, spurred on by their vocational diversification and economic intercourse with the dominant culture. For example, they are discovering that the government exemption from Social Security comes into question as they participate more extensively in general economic and cultural practices of the dominant culture. Some of the Amish and plain Mennonite members are violating their own consciences or church rules as they buy commercial insurance to cover extensive assets that cannot be covered by their aid plans. In other words, they also are succumbing to pressures to be “selectively separate.”

I do not see evidence from our past experience that a “two kingdoms … Non-Resistant Separatist” view helped us preserve mutual aid in health care, or in other insurance areas. Maybe the result would have been different if we were more separate in all of life, for example, in resisting materialism and the inequities in a capitalist economy. Fransen has done us a service in prodding us to search for radical solutions to the health care crisis in our country. But our inability to keep true mutual aid in health care alive in our church and the 45 million people in our country without access to adequate health care call for more than another plan that serves only us.

Maybe we would do better to explore the issue of health care, as all other issues, from the perspective of “how can we be in the world, but not of the world?”