This week’s picks for the best in personal finance from around the web.

10 things retirees won’t tell you (MarketWatch). One of the best ways to prepare for retirement is to learn from those who are already there.

After 30,000 posts, Big Picture blogger has figured a few things out (Washington Post). One of today’s best investment writers on cognitive dissonance and why he blogs.

Big retirement fear: outliving your savings (USA TODAY). We wrote about one solution to outliving your savings in the October issue of the Sound Mind Investing newsletter.

A common, costly slip: out-of-date beneficiary designations (CNBC). A potentially huge mistake with a relatively simple solution.

Working for justice will make you uncomfortable (Christianity Today). Faith may drive a desire for social change, but will it drive us to act?

And from the blogosphere…

Would a repeat of the 1987 crash really be that bad? (A Wealth of Common Sense). Reasons not to dread a downturn.

Biggest losses start with brilliance (Bloomberg View). Successful investing is about so much more than math.

Risk and the life cycle (The Retirement Café). The importance of building a retirement “human capital” account (the potential to work for pay).

Decaying beliefs (The Research Puzzle). Why it’s so important to have an investment philosophy that’s grounded in unchangeable truths.

How to pick the right Medicare drug plan (Encore – a MarketWatch blog). Good ideas to prep for the upcoming open enrollment season. (For more on this topic, read Medicare Users: It’s Time for Your Annual Coverage Check-Up)

We’d love to hear your responses to any of the above. To weigh in, just meet us in the comments section.

Matt Bell

By Matt Bell

Matt Bell is Sound Mind Investing’s Associate Editor. He is the author of three personal finance books published by NavPress, leads workshops at churches and universities throughout the country, and has been quoted in USA TODAY, U.S. News & World Report, and many other media outlets.

Say what you will about the Affordable Care Act (ACA), one thing is certain: it is significantly changing how health-care is paid for. One example of this can be found in the small, but fast-growing, segment of the healthcare world known as healthcare-sharing ministries.

Such ministries, the first of which began more than 30 years ago, don’t provide “insurance.” Instead, inspired by the biblical instruction to “carry each other’s burdens” (Galatians 6:2), all members of a healthcare-sharing ministry pay a monthly “share” amount (similar to an insurance premium). Those members with eligible health-related expenses receive money from other members’ shares.

Players in this space include Samaritan Ministries, Christian Care Ministry (more commonly known as Medi-Share, the name of its healthcare-sharing program), and Christian Healthcare Ministries. We’ll focus on the first two to demonstrate how healthcare-sharing ministries work, but anyone considering this type of service is encouraged to gather information from all three.

Impact Of The Affordable Care Act

The ACA requires most U.S. citizens to carry health insurance. It also makes it easier to do so by eliminating pre-existing conditions as a factor in qualifying for coverage and by lowering the cost of insurance through subsidies for those with low incomes.

While healthcare-sharing is not insurance, a provision within the ACA makes members of healthcare-sharing ministries exempt from the mandate to either purchase insurance or face fines. In fact, healthcare-sharing ministries credit the new law for recent spikes in their growth, whether for faith-related reasons, financial reasons, or both.

Faith Factors

To join a healthcare-sharing ministry, you must agree in writing to its statement of faith. In Samaritan’s case, your pastor also must sign your application, verifying your regular church attendance and Christian lifestyle.

Each healthcare-sharing ministry makes clear that certain costs are not eligible for sharing, including abortion-related expenses and treatment related to substance abuse. For some, knowing their “share” money will help provide for the needs of other Christians and will not support practices contrary to their faith, are important draws.

Dr. Andrea Miller, Christian Care Ministry’s Medical Director and VP of Sharing, said, “We really want people who understand the concept of a sharing ministry. We want people who want to pray for others and are interested in sharing each other’s burdens. This isn’t just another way to pay for healthcare.”

Cost Factors

Still, cost is a key consideration for most people, and healthcare sharing has long been viewed as a less expensive alternative to health insurance.

At Samaritan Ministries, a family’s monthly share price is currently $405 ($355 if both heads of household are 25 or younger). There is no added cost based on the number of children a family has, nor does the cost go up any further after age 25.

Shared funds are not available for needs under $300. Further, the first $300 of the first three eligible medical expenses that exceed $300 in a year are not covered—similar to a deductible in an insurance plan. Also, there is a $250,000 cap per eligible need unless the member pays extra to take part in Samaritan’s Save to Share program.

In contrast, with Medi-Share, you choose among seven annual household portion (AHP) options. For a family in which the oldest adult is 25, a plan with a $1,250 AHP (think of that as the family deductible) costs $610 per month. At age 45, the same plan would cost $637. After meeting the AHP, there are no caps, except in the case of pre-existing conditions (discussed below). Medi-Share also offers monthly share-price reductions if you meet certain good health standards.

Costs are kept low at both ministries, in part because certain procedures that might be covered by some traditional insurance policies are not eligible for sharing. These include routine physicals and screenings, such as mammograms and colonoscopies.

There are also limits as to what costs related to pre-existing conditions are eligible for sharing. At Samaritan, pre-existing conditions are not eligible unless there have been no symptoms or treatments for 12 months, or five years for heart disease and cancer.

At Medi-Share, pre-existing conditions are not eligible for sharing unless there have been no symptoms or treatments for 36 months. Even then, there is a $100,000 per-member annual cap, rising to $500,000 for members who have been with Medi-Share for five years and have been symptom- and treatment-free for that long. Cancer cost eligibility requires that a member be cancer-free for 84 months.

Medi-Share does help pay for certain expenses insurance doesn’t cover, such as adoptions and funerals.

Samaritan’s Process

Samaritan Ministries’ members have no restrictions as to which doctors they can see. But as self-pay patients, they do not receive the lower rates many insurance companies have arranged for their members. When a Samaritan member incurs a medical expense, he or she submits the bill for review. If it’s an eligible expense, Samaritan attempts to negotiate a lower price. The ministry then notifies certain other members to send their next monthly share amount directly to the member who had the expense.

Samaritan sends a checklist to those who are due to receive money from others so they know who is supposed to send money and can keep track as the money comes in.

If there are more needs than money available for sharing at any given time, those with needs may end up receiving a lesser pro-rated amount. Samaritan Ministries’ Anthony Hopp, Director of Membership Development, says that’s happened 10-12 times in the past four years, and in every case the full needs were eventually shared.

The direct-sharing process may sound unusual to someone accustomed to insurance, but Craig, who has been a Samaritan member for a little over a year, likes writing checks to other families. “It’s a greater blessing than saying, ‘Here, insurance company, here’s another $400.’ I feel like I’m doing something a Christian should be doing, sharing in the needs and burdens of others.”

Medi-Share’s Process

Medi-Share members are part of a preferred provider organization (PPO), which means they receive pre-negotiated rates (which are often significantly lower) if they use providers that are in its network. Members are responsible for a $35 provider fee, similar to the typical office co-pay. Then medical service providers bill Medi-Share, just as they would a traditional insurance company. Once a member household has met its AHP, all other eligible costs are available to be shared.

Each member deposits the required monthly share amount in a checking account set up with America’s Christian Credit Union, and gives Medi-Share limited power-of-attorney to access the account. This enables Medi-Share to move money in and out of the account, depending on whether the member is receiving money from, or sending money to, other members. Ultimately, Medi-Share pays a member’s bill directly from that member’s account.

To make sure there’s enough money to meet its members’ needs, Dr. Miller says Medi-Share constantly evaluates how much is coming in, how much is needed, and what their past experience has been. When needs run high, the ministry slows the bill-pay process while trying to stay within a 30-day time frame, or it may increase members’ monthly share prices. She points out that since the ministry was founded over 20 years ago, every eligible need has been fully met.

Is Healthcare Sharing For You?

Healthcare-sharing ministries have traditionally appealed on the basis of their low cost and faith-friendly policies. While the Affordable Care Act has driven renewed interest in the ministries, lower-income families may find that significant government subsidies (where available) on policies available through the health-insurance exchanges make those policies a less expensive option than healthcare sharing. Still, anyone comparing insurance with healthcare sharing should consider their total out-of-pocket costs, including deductibles and co-pays.

Samaritan’s Anthony Hopp points out that their value proposition has never been solely based on price. “There’s a lot of ‘one-anothering’ that went on with the early church. This is similar in that it’s a way for like-minded believers to bear one another’s burdens—not only financially, but emotionally and spiritually.”

This article appears in the October issue of the Sound Mind Investing monthly newsletter. See what other articles are unlocked this month or sign up for a web membership, which will give you access to SMI’s market-beating investing strategies, including this month’s specific recommendations.

Matt Bell

By Matt Bell

Matt Bell is Sound Mind Investing’s Associate Editor. He is the author of three personal finance books published by NavPress, leads workshops at churches and universities throughout the country, and has been quoted in USA TODAY, U.S. News & World Report, and many other media outlets.

This week’s picks for the best in personal finance from around the web.

How your personality affects your investment choices (Morningstar). Take the test and find out.

Parents, the children will be fine. Spend their inheritance now. (NY Times). There are far more parents who intend to leave an inheritance than there are kids who expect to receive one.

Now is a tough time to retire (Financial Advisor). When you’re on the cusp of retirement, historical stock market returns matter least of all.

Financial simplicity should be a retirement priority (US News). Now’s the time for a little financial house cleaning.

Reverse mortgages no fast ticket to retirement easy street (Washington Post). Even a mortgage that pays you could lead to foreclosure.

And from the blogosphere…

Enduring lessons from the financial crisis (A Wealth of Common Sense). Never let a crisis go to waste. At very least, learn from it.

The top secrets of successful retirees (PT Money). Real retirees on what they did well and wish they had done better.

A fireside chat with Charlie Munger (Money Beat – a Wall Street Journal blog). Buffett’s right hand man on the importance of knowing what you don’t know and why Benjamin Graham wasn’t all he was cracked up to be.

Retirement – a luxury good (The Aleph Blog). Why modern retirement is an exercise in compromise.

Must, should, and financial freedom (My Money Blog). How money can be a bridge to the life you must live.

We’d love to hear your responses to any of the above. To weigh in, just meet us in the comments section.

Matt Bell

By Matt Bell

Matt Bell is Sound Mind Investing’s Associate Editor. He is the author of three personal finance books published by NavPress, leads workshops at churches and universities throughout the country, and has been quoted in USA TODAY, U.S. News & World Report, and many other media outlets.

I know, I really should be writing about investing. After all, Janet Yellen is speaking today! When are interest rates likely to go up? What will it mean for the markets? What else could possibly matter?

But I keep thinking about gratitude. In part, that’s because in the small group my wife and I are part of we were just talking about ways to foster hearts of gratitude in our kids.

It’s also because of some good news I received today. On the heels of some shocking news earlier this year that a good friend of ours has cancer came word today that treatments over the summer have been successful and she is cancer-free. I’ve been so happy and thankful that it’s been hard to concentrate.

Of course, it’s easy to be thankful when things are going well.

Today also brought some difficult news from other friends. Their health-related journey appears to be headed in a very different direction. And yet, throughout their experience, what’s been evident is the depth of their faith, the strength of their marriage, and their heartfelt gratitude for the gift of each day.

At a time when so many others might want to draw inward, they’ve wanted to move outward—toward relationships and encouraging others. At a time when so many others might feel the need mostly to receive, they’ve been motivated to give. At a time when so many others might be tempted to doubt, they’ve been moved to trust.

Their story has been amazingly inspiring. I’m so thankful to know them.

Thinking about gratitude reminded me of a story told by the Reverend Dr. John Westerhoff in a booklet called “Grateful and Generous Hearts.”

Writer Fulton Oursler had vivid memories of an old woman named Anna who helped care for him as a child. When she sat down to eat she would say, “Much obliged, dear Lord, for my vittles.”  Oursler wondered why she thanked God since she would get the food regardless of whether she gave thanks or not.

“It makes everything taste better to be thankful,” Anna said. “You know, it’s a game an old preacher taught me to play. It’s about looking for things to be thankful for. Like one day I was walking to the store to buy a loaf of bread. I look in all the windows. There are so many pretty clothes.”

“But Anna, you can’t afford to buy any of them!” he interjected.

“Oh, I know, but I can play dolls with them. I can imagine your mom and sister all dressed up in them and I’m thankful. Much obliged, dear Lord, for playing in an old lady’s mind.”

Many years later, when Anna was dying, Oursler remembered standing by her bedside.  Deep in pain, her old hands were knotted together in a desperate clutch. “Poor old woman,” he thought. “What had she to be thankful for now?”  Just then, she opened her eyes and looked at him and said, “Much obliged, dear Lord, for such fine friends.”

Dr. Westerhoff believes we can all learn much from Anna, who viewed life as a gift. “Taking nothing for granted, demanding nothing as her due, she recognized that we come into this world with nothing, we go out with nothing, and in between we are given all we have.”

While the busyness, responsibilities, and news of the day can easily obstruct our view, none of us has to look very far to find a reason to be thankful. Living with an attitude of thankfulness is honoring to God, good for the soul, and infectious.

What are you thankful for?  Try making a list of ten things—the first ten that come to mind.  Then give Anna’s prayer a try: “Much obliged, dear Lord.  Much Obliged.”

“Give thanks in all circumstances; for this is God’s will for you in Christ Jesus.” – 1 Thessalonians 5:18

Matt Bell

By Matt Bell

Matt Bell is Sound Mind Investing’s Associate Editor. He is the author of three personal finance books published by NavPress, leads workshops at churches and universities throughout the country, and has been quoted in USA TODAY, U.S. News & World Report, and many other media outlets.

This week’s picks for the best in personal finance from around the web.

For some, ’tis a gift to be simple (NY Times). Michelangelo once said, “Simplicity is the ultimate sophistication.” Some of the happiest retirees are those who take that wisdom to heart.

Parallels to 1937 (Project Syndicate). Shiller’s view of the world is as dismal as the science for which he won the Nobel Prize.

Financial schemes against the elderly are increasing (NY Times). Power of attorney often gives caregivers the power to steal.

Student debt over $50k is on the rise (MoneyCNN). Almost as disturbing: Some 2 million Americans age 60 and older have student loan debt.

It’s all gift (Christianity Today). Rethinking stewardship at work.

And from the blogosphere…

Buying stocks based on how other people feel (Bloomberg View). Why Barry Ritholtz frowns on using sentiment to guide investment decisions.

Be humble, become wealthy (The Psy-Fi Blog). Our culture may not value humility, but the markets do.

Beguiled by narrative (Above the Markets). On this 9/11 anniversary week, a fitting reminder about the dangers of seeing what we want to see.

Never delegate understanding (The Research Puzzle). Each of us is ultimately responsible for how well we manage what’s been entrusted to us. How well do you know what’s in your portfolio and why?

Ron Blue on perpetual generosity (Acton.org). An hour’s worth of wisdom from one of the greatest teachers of biblical money management. Well worth watching.

We’d love to hear your responses to any of the above. To weigh in, just meet us in the comments section.

 

Matt Bell

By Matt Bell

Matt Bell is Sound Mind Investing’s Associate Editor. He is the author of three personal finance books published by NavPress, leads workshops at churches and universities throughout the country, and has been quoted in USA TODAY, U.S. News & World Report, and many other media outlets.