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A Christian (and legal) Alternative to Obamacare

9/3/2014

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Recently, I've had a number of people approach me asking about lowering the cost of their insurance. Most have seen large increases in their premiums accompanied by higher out-of-pocket costs too (increased deductibles). Some have even seen their policies cancelled. All this due to Obamacare. 

For some time now, I have been aware of, and from time to time have even recommended, a concept known as Christian medical cost sharing. As Obamacare continues to exact its price on consumers, I've felt compelled to look more closely at this alternative. Before you ask, know that each of these companies (ministries) are specifically exempted from the requirements of the Affordable Care Act (Obamacare). So, these are legal, non-insurance alternatives to Obamacare. It is important to note - these are the only four entities that can ever meet the statutory requirements of the ACA.

The ideology behind medical cost sharing is rooted in scripture, specifically Galatians 6:2 which reads, "Share each other's burdens, and in this way obey the law of Christ." Hebrews 13:16 also reads, "And do not forget to do good and to share with others, for with such sacrifices God is pleased."  Simply put, this concept allows Christians to put the principle of sharing one another's burdens into action. 

Who are they?
Christian Healthcare Ministries (founded in 1981)  http://www.chministries.org/
Liberty Healthshare (founded in 1988)  http://www.libertyhealthshare.org/
Medi-Share or Christian Care Ministries (founded in 1993)  http://mychristiancare.org/
Samaritan Ministries (founded in 1994)  http://samaritanministries.org/

How do they work?
The concept of Christian medical cost sharing asks participants to assert that they live a lifestyle consistent with biblical teaching (Liberty being an exception as they accept people of a variety of faiths, as well as sexual orientations). In general, however, if participants are living a more Christ-like lifestyle, it is reasonable to assume they will have less health issues - resulting in lower costs for everyone. And, that is a good thing, right? These plans also have significantly lower overhead and no profit incentive which helps keep your monthly costs down too.

Are there deductibles?
All of the plans require participants to bear personal responsibility for some portion of their medical costs - the equivalent of an insurance deductible - albeit much lower than most deductibles. Liberty and CHM both have individual and family annual amounts (as low as $500/$1500 per year), Medi-Share has only a household annual amount (as low as $1,250) and Samaritan requires that the participant cover the first $300 of each incident of care. That being said, discounts that you negotiate with your doctor or medical facility ordinarily count toward that personal responsibility amount, which is certainly NOT the case with traditional insurance. Once that amount has been met, the additional amount is "shared" with other members for payment.

How are premiums handled?
While medical cost sharing providers do not charge premiums as an insurance company does, they assign each household an amount to "share" each month. The monthly pool of shares submitted by all participants is used to satisfy the needs shared by participants during that month. How they handle the exchange differs from company to company, with some having participants sending their "share" directly to another participant. At least one establishes a "share account" to which you deposit your share, which is then distributed to meet other's needs. Those who fail to share monthly as scheduled are not eligible to share their own needs when they arise, so there are no free-loaders. 

Can I choose my own doctor or provider?
All but one of the plans allow you to choose your own doctors and hospitals (Medi-Share is a PPO). You simply see your medical provider, negotiate a lower price (often 40% or more lower when you advise that you are "self-pay"), obtain a receipt, submit it to your sharing provider and await the payment, which ordinarily arrives within 30-60 days.

Are there limits to coverage?
Each of the plans have per incident limitations, which range from $125,000 to $250,000. But, for a small increase in monthly share, the limits can be extended to $1 million per incident (Liberty) or UNLIMITED with any of the other three.   

How does the monthly cost compare to traditional insurance?
Even the most gold-plated family plans (extended benefits, maximum limits and lowest personal responsibility amounts) run less than $485 per month at all but Medi-Share, which tops out around $650. Gold-plated individual rates range from $162 (CHM) to $344 (Medi-Share). One of the programs, Samaritan, also boasts single-parent rates. 

Are they large enough to survive?
Just like in insurance, anytime you discuss sharing costs, there must be a pool of people (participants) with whom to share those costs. The size of the pool of participants is an important factor in deciding on a sharing plan. If you are sharing with a relatively small pool of participants, there is considerably higher risk that the funds remitted in a given month may not be sufficient to cover all the needs that arise. Only one of the four plans (Liberty) is small enough to be concerned. With around 3,000 participants, Liberty is tiny compared to its big brothers - Medi-Share (82,000+), CHM (100,000+) and Samaritan (120,000+). Liberty has also shared just $20 million since its founding in 1988, compared to around $1 billion each for the other organizations. Samaritan, for example, shares more in three months than Liberty has in its entire history. From a size perspective, I would be concerned about Liberty. Each of the other organizations have demonstrated, over time, that they are large enough to handle whatever comes along. 

So, what is the bottom line?
To simplify things a bit, I'd like to eliminate the lessor choices and focus on the strongest alternatives. First, I would eliminate Liberty for two specific reasons - their loose adherence to biblical teaching (inclusion of other faiths and inclusion of lifestyles that are clearly anti-biblical), and their size which poses considerable risk to participants. I would also eliminate Medi-Share because of their prohibitive and non-competitive "pricing", which is as much as 45% higher than the others, and due to the PPO structure.

After elimination of Liberty and Medi-Share, we are left with CHM and Samaritan. With these two, pricing is relatively similar. The fundamental differences lie between first-dollar (think deductible) costs and pre-existing conditions, which are not covered (shared) under the Samaritan program. In either case, read the plan's definition of pre-existing conditions to determine if your situation is classified as pre-existing. If pre-existing conditions are a concern, then CHM, which covers such conditions on a sliding scale, may be your best alternative. If not, then it really boils down to monthly expense and your preference for how your first dollar (think deductible) costs are handled. 

Regardless of your choice, CHM and Samaritan both offer an attractive and affordable alternative to the Affordable Care Act (aka Obamacare). They also give Christians a real chance to live out a biblical model for sharing with fellow believers. And, there is just something good about knowing where your money is going and praying for those who benefit from it - and for being on the other end of that too. 








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Abortion on Wall Street, Part 2

10/5/2011

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Unfortunately, abortion is alive and well on Wall Street. And, many pro-life investors are unwittingly making a killing from this killing business.

While Planned Parenthood and other women’s rights groups have been extremely successful in a campaign to draw support from America’s corporations, Wall Street support for abortion comes in a variety of formats. 

Some companies, such as Pediatrix, are direct participants in the abortion business. Some, such as Stericycle, indirectly provide critical services needed by the industry (Stericycle contracts with PP clinics to dispose of aborted babies). Danco Labs, and similar companies, manufacture abortion inducing drugs. Yet others, like Starbucks, provide financial support through corporate giving to organizations like Planned Parenthood - America's largest provider of abortion services.

So, you ask, “What’s a pro-life investor to do?” In short, the same thing liberal investors have been doing for years - participate in a Values-Based Investing (VBI) program - specifically a Biblically-Responsible Investing (BRI) program. 

Until recently, VBI funds have been dominated by socially- liberal causes. Now, however, conservative-minded investors can take advantage of this concept. Many Christian financial advisors now have tools to screen companies and mutual funds that contradict biblical values.
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Abortion on Wall Street, Part 1

10/5/2011

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There's a moral dilemma facing many Christian investors. The question surrounds the concept of moral investing. Where does a Christian investor draw the line? We are sometimes encouraged to forego purchases by boycotting companies that engage in anti-Christian behavior. And, while the intent is noble, I would suggest that there is an even greater (and more important) consideration.

Certainly, there is Biblical support for avoiding (where possible) doing business with such companies, but what about OWNING such a company? Should a Christian OWN a company that produces pornography or participates in the abortion industry? 

As stockholders in such companies, Christians ARE owners. Each share of stock represents a proportional ownership interest in the company. Shareholders in a company have bought that company's stock because they have expressed an interest in profiting from the company's business activities. 

So, I ask again. Should a Christian OWN stock in such a company? Is it possible to own stock in the porn or casino industries, and at the same time genuinely pray for an end to porn and gambling? What about a company in the abortion business? Can we OWN it and pray for an end to the holocaust that makes it profitable? 

You say, "But I just own mutual funds or a variable annuity." Guess what... ownership of shares in a mutual fund or variable annuity represents proportional interest in the underlying stocks - so we remain stockholders in every company that mutual fund holds in it's portfolio. Do you know what you OWN? 
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Is Gold Set to Crash? The Answer...

9/28/2011

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As gold has soared, there has been much speculation as to when the gold bubble will burst.  And, with its recent slide, many wonder if its already bursting. 

Is gold overvalued?  Taking into consideration its historic pricing in inflation-adjusted dollars, gold is actually nowhere near its previous highs.  At its inflation-adjusted peak in 1980, gold was trading at about $850/ounce.  Based on today’s prices, one would assume that gold is trading at multiples over its historic highs.  In reality, gold would have to reach almost $2,420/ounce to match its inflation-adjusted 1980 high.  

With such widespread uncertainty in the world economy and a deepening concern over the stability of the world’s major currencies, investors are turning to gold as a safe haven.  As a result, gold's prices have skyrocketed.  That being said, is there really any reason for investors to feel any better about the world markets and economy?  In fact, the current pullback is likely no more than a brief respite before the next shoe drops on the economic news front.

Since President Nixon removed the US Dollar (USD) from the gold standard in 1971, our currency has been manipulated by the Federal Reserve to the point of near worthlessness.  Over the 24 months proceeding September 2011, the USD lost as much as 31% against the currencies of Japan, Switzerland, Australia and Canada, and lost more than 20% to the much maligned Euro in the last 18 months alone.  There's no realistic reason to believe this devaluing isn't going to continue.

With the USD and other major currencies in a tailspin, investors are turning to gold as a trusted store of value and the increased demand has driven its prices northward. 

So, will gold's trend continue?  Adjusted for inflation, it would appear there is more room for growth.  Any significant trend downward would depend largely on the world’s economic powers exercising good stewardship.  Given their track record, I’d bet on gold!
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Your 401(k): Take It or Leave It?

9/24/2011

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Many workers routinely leave their retirement plans behind when they leave for another job, or when they retire.  And, in the interest of full disclosure, there are some legitimate reasons for doing so.  On the whole, however, holding onto an old 401(k) is not the wisest strategy.  Here’s why…

EXPENSES

By conservative estimates, disclosed and hidden plan expenses cost participants an average of 3-5% annually, with as many as 14 different entities profiting from literally dozens of potential charges. 

Discussing 401(k) expenses in a PBS interview, John Bogle, founder of Vanguard, said, “The financial system puts up 0% of the capital, takes 0% of the risk and gets almost 80% of the return… That is a financial system that is failing investors…”

And, as the industry increasingly markets fee-stacked Asset Allocation and Target Date offerings, average total expenses could easily soar beyond current estimates to 5, 6 or even 7%.

LIMITED INVESTMENT CHOICES

If your plan is like most, it probably offers fewer than 20-25 investment options.  How those particular funds found their way into your plan should concern you.  

Conflicts of interest may be influencing fund selection recommendations.  In some cases, Providers manage or own the funds they are recommending.  In other instances, they are receiving compensation from the recommended funds.  Too often, these conflicts result in the inclusion of inferior investment options inside your plan.

Additionally, these limited offerings often provide investors with little opportunity for proper, high-quality allocation among small, mid, large and international sectors. 

WASHINGTON MONEY GRAB

Congressional and White House debate concerning a potential government takeover of 401(k) plans has created quite a stir over the last few months.  Most of the discussion has surrounded the idea of consolidating 401(k)s into something akin to the Social Security system, a plan that presents many problems. 

As proposed, the government would become the beneficiary of your plan at your death – not your family or heirs.  Essentially, the government would give you an annuity payment, and eliminate your access to the cash value of your account.  And, finally, the government would also select the investments. 

Is this possible?  The government might attempt to justify the seizure under ERISA, the law that governs employer plans.  There are many motivations for such a wealth confiscation.  Aside from the obvious, politicians could see this $6-8 Trillion source of wealth as a resource to shore up the struggling Social Security and Pension Benefit Guaranty Corporation programs.  

THE SOLUTION

In most cases, rolling over your 401(k) to a personal IRA is the optimal choice.  Done properly, you maintain the tax advantages, while opening your account to a universe of investments.  Proper allocation, utilizing higher quality investments, becomes more realistic.  And, many, if not all, of the hidden expenses associated with 401(k) plans are eliminated, increasing your opportunity for greater returns.  A rollover into an IRA will give you and your advisor the tools to manage risks, return and expenses more effectively.

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Solutions to Health Insurance Cost

9/8/2011

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Guest Blogger: Nick Smith nick@smithhealth.org

There’s one thing no one is telling you about our current healthcare problems…
Whether you’re working for a large corporation, running a small business, or happen to be unemployed, there’s a good chance you are paying more for healthcare than you should. 

So what is the solution?  I could get really boring and impress you with a bunch of insurance jargon, but instead I’ll sum it up this way.  Over the last 10 years, Congress has passed several laws and tax incentives that could easily decrease your out-of-pocket healthcare expenses by $2,000 to $8,000 annually.  For a variety of reasons, most health insurance agents have not taken the time to adequately understand these changes.

We believe that the key to fighting extreme health insurance costs is YOU, the American consumer, who throughout history has been able to adapt and overcome all types of obstacles. We believe that with the right tools and knowledge everybody can play a role in busting up the currently broken system. 

As we launch new consumer health insurance solutions, we have made some commitments.  We are dedicated to busting up the “old school” approach of the greedy, commission-focused insurance agent. We will team with businesses and individuals, providing them with the knowledge and innovative resources they need.  Together, we will become the solution to out-of-control health insurance costs.
                                                                                                                                                                                                   
ABOUT NICK: Nick Smith, founder of Smith Health, has spent much time and energy learning the nuances of the health insurance industry, as well as the intricacies of the laws and IRS regulations that govern it.  Nick’s innovative solutions for driving down costs aren’t winning many fans in the insurance industry, because they put the client’s needs ahead of the agent’s.  Discover how Nick can help you control the cost of your healthcare.

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Death by Taxation - The Tax Man Cometh

4/5/2010

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Someone said that there are only two certainties in life: death and taxes. Will Rogers once said, “The only difference in death and taxes is that death doesn’t get worse everytime Congress meets.”  Rogers also proclaimed, “The income tax has made more liars out of the American people than golf has.”  No wonder.   

As of 2006, a mere $1,153 (shipping included) would have bought you a copy of the IRS Code and Regulations from the US Government Printing Office.  At that point, the document numbered an astounding 16,845 pages, more than seven times the size of the Holy Bible.  Comparatively, the 1913 Tax Code was a mere 400 pages in length.  No wonder Americans fail to minimize their tax bill year after year.  It’s no surprise that taxpayers often leave money on the table at tax time.

While it’s unlikely you can reverse the effects of your current tax bill, a review of your tax return may prove profitable for the coming year.  Why is that?  IRS Form 1040 is one of the most important financial planning tools available.  By reviewing your 1040, and discovering hidden money, you may convert unnecessary taxes into money to fund your retirement, payoff your home or meet other important financial goals.

So, where do you start?  When looking at your 1040, there are a number of red flags that should be cause for concern.  One of the most common questions concerns interest and dividend income.  If you report significant interest and dividend income and are simply re-investing those earnings, a tax-free or tax-deferred investment vehicle might be worth consideration.  Doing so would allow those funds to grow without the impact of current taxation. 

Capital Gains is another area that presents opportunities.  Through the 2010 tax year, many taxpayers will enjoy a 0% Capital Gains tax rate.  Yes, you read that correct.  If you have been holding onto highly appreciated assets just to avoid paying the Capital Gains tax, this may be your best opportunity to divest and move those assets into more stable investment vehicles.  Recent passage of the Health Care reform bill also created new taxes on Capital Gains in the future, so… there may be no time like the present to cash in on Capital Gains!

If you are required to take Required Minimum Distributions (RMD’s) from your IRA’s or other retirement accounts, but are not spending that income, you might benefit from a strategy which seeks to expose those retirement funds to taxation now rather than later.  The current environment of lower stock market valuations might make this strategy especially appealing to some.

The concepts mentioned above represent just a few of the many opportunities that may be present on your tax return.  As with any financial decision, not all solutions are suitable for all investors.  Before investing, always consult with your tax or legal professional to determine suitability for your specific circumstances.
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    Stephen R. Arnold
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    About the author...

    Stephen Arnold is the Founder of Storehouse Advisory Group, a Tennessee-based financial planning and investment advisory firm specializing in Biblically-Responsible Investing. 

    Storehouse Advisory Group is registered with the Securities Division of the Tennessee Department of Commerce and Insurance.

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