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Joseph Slife

Joseph Slife

Writer/researcher

Joseph Slife has been a news writer for the Associated Press, a college instructor, and a radio host.

From 1990 to 2003, he was a writer/researcher for Larry Burkett at Christian Financial Concepts and Crown Financial Ministries, and he served as the executive producer for CFC/Crown Radio from 2000-2005.

He first joined SMI's writing team in 2008, before going on to serve nearly six years as senior producer/co-host for WORLD Radio. He returned to Sound Mind Investing in 2017.

Joseph and his wife Joye have three grown sons.

Most Recent Articles

SMI on the Radio: Investing Basics You Can Learn at the Beach (audio and transcript)

You can take a beach vacation and get a pretty good education about investing basics all at the same time.

SMI's executive editor Mark Biller explains on Moody Radio's MoneyWise Live. He also takes caller questions.

To listen, click the play button below. Scroll down for the transcript.

(And for more radio appearances by members of the SMI team, visit our Resources page.)

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Money Roundup: Why Inflation Is Difficult to Forecast, Helping Mom and Dad, and More

Spring gives way to summer this weekend! Grab a cold beverage, find a shady spot, and enjoy our latest collection of interesting articles on investing, personal finance, and stewardship.

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The Apostle Most Keenly Attuned to the Financial Implications of Following Christ

The upcoming issue of the Sound Mind Investing newsletter will focus on giving and generosity, as is our July custom.

Working on the issue this week, I was struck by a passage in our cover article by pastor Charles Stanley. He notes that it is Matthew, the gospel writer who was once a tax collector (see Matthew 9:9), who gives particular emphasis to the financial aspects of discipleship.

[Matthew] is the gospel writer who knows from personal experience a great deal about money and whether it is being used righteously or unrighteously.

Matthew is the one who gives us the details about the gifts brought to Jesus. He is the one who records Jesus’ condemnation of the Pharisees for allowing people to avoid caring for their parents financially, and who tells us about what the Pharisees did with the thirty pieces of silver that Judas returned to them after he had betrayed Jesus.

As you look at the Gospel of Matthew, you will find a great deal of information about money, finances, material possessions, and the proper use of our resources.

What Matthew preserved for us

Intrigued by what Dr. Stanley wrote, I decided to do additional research. With the aid of a topical concordance that lists biblical passages that touch on money and possessions, I discovered that Matthew's gospel has about 70 references to financial matters (depending on how you count them). Many are from the Sermon on the Mount found in Matthew 5-7.

Mark's gospel (much shorter than Matthew's and likely a reflection of information from Peter) has only 23 such references. John's gospel has even fewer — only 16. And while Luke comes close to rivaling Matthew for references to money and possessions, Luke was not among Jesus's 12 disciples. He compiled his narrative based on details from "those who from the beginning were eyewitnesses" (Luke 1:2). He doesn't name those eyewitnesses, but certainly, they included (either directly or indirectly) various apostles — Matthew likely among them.

So we are indebted to Matthew, who (under the inspiration of the Holy Spirit) passed on to us, from Jesus Himself, such life-changing teaching as this:

  • “Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal, but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. For where your treasure is, there your heart will be also" (Matthew 6:19-21 – a similar passage is in Luke 12).
     
  • "No one can serve two masters, for either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve God and money" (Matthew 6:24, cf. Luke 16:13).
     
  • "Therefore do not be anxious, saying, ‘What shall we eat?’ or ‘What shall we drink?’ or ‘What shall we wear?’ For the Gentiles seek after all these things, and your heavenly Father knows that you need them all. But seek first the kingdom of God and his righteousness, and all these things will be added to you" (Matthew 6:31-33).
     
  • "As for what was sown among thorns, this is the one who hears the word, but the cares of the world and the deceitfulness of riches choke the word, and it proves unfruitful" (Matthew 13:22).
     
  • "The kingdom of heaven is like treasure hidden in a field, which a man found and covered up. Then in his joy he goes and sells all that he has and buys that field" (Matthew 13:44).
     
  • "Then Jesus told his disciples, 'If anyone would come after me, let him deny himself and take up his cross and follow me. For whoever would save his life will lose it, but whoever loses his life for my sake will find it. For what will it profit a man if he gains the whole world and forfeits his soul?'" (Matthew 16:24-26).
     
  • "His master said to him, 'Well done, good and faithful servant. You have been faithful over a little; I will set you over much. Enter into the joy of your master'" (Matthew 25:21).

The July "generosity issue" of the Sound Mind Investing newsletter will be released Friday, June 25. We trust it will encourage you as you seek to be a "good and faithful servant" of the Lord.

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Now Available: Personal Portfolio Tracker & Fund Performance Rankings With Data Through 5-31-21

We've just updated SMI's Personal Portfolio Tracker with performance data through May 31, 2021, and we've posted the latest edition of our monthly Fund Performance Rankings (FPR) as well.

For those new to the Tracker and FPR, here is an overview:

• The Tracker: SMI's fund-performance database tracks the monthly returns of thousands of traditional mutual funds and ETFs. The Tracker can filter that large amount of data and produce a concise report covering only the funds available via your employer-sponsored retirement plan, thus making it easier to apply our Fund Upgrading strategy to a 401(k), 403(b), or similar plan.

Important: There are differences between the fund categories used in the Tracker and those used in the SMI newsletter.

The newsletter's Upgrading formula for domestic funds guides users toward either growth or value funds as appropriate, rather than maintaining both growth and value allocations at all times. Accordingly, the newsletter uses only two domestic categories: Large Company and Small Company. 

Tracker portfolios, however, classify holdings according to four domestic stock-fund categories: Large/Growth and Large/Value plus Small/Growth and Small/Value. This helps members who use alternatives to our "official" fund recommendations gauge (using the Tracker's percentile-ranking column) how each fund they own is performing relative to its same-category peers. Because Upgrading calls for selling a fund when it drops below the 25th percentile, having a clear view of a fund's relative performance is important to maintaining that selling discipline.

Also, unlike the newsletter, Tracker portfolios show a separate Foreign category. In the newsletter, Foreign is a subset of the "Situational" category.

The Tracker will display any fund that doesn't fit within the five categories mentioned above (Large/Growth, Large/Value, Small/Growth, Small/Value, and Foreign) in a category labeled "Other Funds."

If you are new to the Tracker, watch our tutorial videos. Go to the Tracker page and click the Video Tutorials tab.

• Fund Performance Rankings (FPR): The FPR report is a 37-page downloadable PDF file featuring performance data and SMI's momentum rankings for more than 1,600 no-load traditional funds and ETFs.

We choose which funds to list in the FPR based on asset size, brand familiarity, and brokerage availability.

The Fund Performance Rankings report displays domestic stock funds (both traditional funds and ETFs) across four common categories: Large/Growth, Large/Value, Small/Growth, Small/Value. Like the Tracker, the FPR also uses the Foreign category. Other FPR categories include Bond funds, Target-Date funds, and Sector funds. 

Check page 2 to learn how to use the FPR report. Page 3 includes a listing of 70+ risk categories that will help you compare "apples to apples." (Each category shown on page 3 is hyperlinked, enabling you to jump to specific sections within the rankings quickly.) Page 4 of the FPR has explanations of the various data-column headings.

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Money Roundup: Mistakes Fund Investors Make, Big Tuition Discounts, and More

Here is our weekly collection of worthwhile reads on investing, personal finance, and stewardship.

Comments? Let us hear from you below!

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SMI on the Radio: Is Higher Inflation Here to Stay? (audio and transcript)

Inflation is ramping up. Is that something to be concerned about? How might it affect your portfolio?

SMI's executive editor Mark Biller discussed those matters last week with host Rob West on Moody Radio's MoneyWise Live.

To listen, click the play button below. Scroll down for the transcript.

(And for more radio appearances by members of the SMI team, visit our Resources page.)

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A Prayer for Memorial Day

This prayer was written several years ago by author and speaker Mark D. Roberts, now of Fuller Theological Seminary's DePree Center. It appears here in slightly abridged form.

Gracious and Sovereign God, Lord of all nations, on this Memorial Day we reflect upon our blessings as a nation and the high cost of those blessings.

Thank you for the freedom we enjoy in this country, for opportunities to flourish, and for the security of our land. Thank you for those who have given their lives in service to our country. Thank you for a day set apart, not just for celebration, but also for solemn remembrance as we consider the sacrifices of so many.

Even as we remember those who have given their lives in the past, we think of those whose lives are on the line today. Protect them. Encourage them. Bring them home safely and soon.

Guide those who lead our nation in international affairs. Help them to pursue diplomatic paths that prevent needless conflict. May they have your wisdom about when and how to use the military might you have entrusted to us.

We know, dear Lord, that ultimate peace will not come until your kingdom is here in all of its fullness. Nevertheless, we pray for a foretaste of the future. We ask for the growth of peace throughout our world today, so that fewer and fewer men and women will have to risk, and even to sacrifice, their lives.

We long for the day when people will "beat their swords into plowshares, and their spears into pruning hooks; nation shall not lift up sword against nation, neither shall they learn war any more" (Isaiah 2:4 ESV).

May your kingdom come, Lord, and your will be done on earth, as it is in heaven! 

All praise be to you — God of grace, God of mercy, God of justice, God of peace, King of kings, and Lord of lords! Amen.

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Health Care Sharing Ministries: A Christian Alternative to Health Insurance

Taking up a collection for people in need is a time-honored approach to benevolent giving. Whether the cause is disaster relief, food for the hungry, or clean water for a remote village overseas, the needs of the relatively few can be met by pooling the resources of the many.

Interestingly, this “let’s all pitch in” model, perhaps nearly as ancient as human history, has become an increasingly popular method of meeting healthcare expenses in the 21st century.

Ten-year-old pitcher Luke Collier had the opposing batter in the hole on an 0-and-2 count. He got the sign and served up what he hoped would be the strikeout pitch. It wasn’t. Seconds later, Luke lay on the ground, dazed and disoriented. The batter had hit a screaming line drive that struck Luke square in the face, just below his left eye. The crowd gasped, then fell silent. Luke’s dad rushed from the stands.

A hospital examination showed that the impact damaged Luke’s eye, and he had two broken bones. Treatment and recovery, which involved hospitalization and a dozen follow-up visits with specialists, dragged on for months. Although Luke’s father, Eric, was grateful for his son’s progress, he worried about the mounting bills. A few months before the injury, Eric had abandoned his family’s costly traditional health insurance and signed up with a “health care sharing ministry” known as Medi-Share. Its members voluntarily help each other cover large medical bills. Would his fellow members come through? Would health care sharing work?

The answer, as Eric was relieved to discover, was “yes.” Almost all of Luke’s medical bills were covered by fellow Medi-Share members.

Sharing ministries are “a modern-day version of what the church started back in the book of Acts,” Eric says, referring to passages in the New Testament describing how early Christians provided for each other’s needs. He describes the ministry as “a community of like-minded believers who pray for each other, supported by an organization that provides health education and promotes biblical living.”

This story recounted above is true. We know — because Eric is a portfolio manager at SMI Advisory Services, a company affiliated with but separate from the SMI newsletter. His positive experience with health care sharing influenced several others in the SMI family to sign up. (Some, like Eric, joined Medi-Share. Others have chosen other sharing ministries.)

However, the purpose of this article isn’t to endorse or promote any particular health care sharing ministry (HCSM) or even to recommend that SMI readers choose an HCSM over traditional health insurance. But we want you to be aware of these organizations and their crucial role in helping people afford health care. It’s up to you to decide if joining an HCSM is suitable for you and your family.

Each health care sharing ministry has its particular membership requirements and detailed sharing guidelines. This article provides only an overview. We encourage you to visit a ministry’s website and study its policies carefully before deciding to become an HCSM member.

Background

Some religious groups, notably Mennonites, Anabaptists, and the Amish, have long shared health costs within their faith communities. But in recent decades, broader-based health care sharing ministries have come on the scene, opening up their membership to Christians from various denominations and communions.

Until the Affordable Care Act (ACA) became law in 2010, most HCSMs remained small. But one side effect of the ACA, known colloquially as “Obamacare,” was to spur the growth of health care sharing. Initially, this may have been because the ACA required all Americans to have health insurance or face a fine unless a person qualified for an exemption. The legislative language exempted members of health care sharing ministries from the mandate.

At the time of the law’s passage, an estimated 200,000 Americans participated in health care sharing ministries. Today, a little more than a decade later, that number has swelled to roughly 1.5 million, a more than sevenfold increase — even though Congress ultimately repealed the ACA fine.

People continue to turn to health care sharing ministries because HCSMs provide coverage at a much lower cost than traditional health insurance. A report last fall from the Congressional Budget Office, the federal agency that provides financial information to Congress, suggested traditional insurance is increasingly unaffordable for many people. Among them, those who 1) aren’t covered by an employer-provided health plan and 2) earn too much income to qualify for premium subsidies available through government-run health insurance exchanges.

To be clear, health care sharing ministries are not providers of low-cost insurance. Instead, they are voluntary cooperatives that facilitate sharing health care expenses among members — much like taking up a collection to assist someone in need. Each HCSM acts as an administrator, matching those who give with those who have incurred health expenses they can’t cover from their own resources. Unlike insurance companies, HCSMs do not guarantee coverage or maintain financial reserves to pay claims, nor are they bound by law to cover pre-existing conditions (more on this later).

To qualify as an HCSM under federal law, an organization must be recognized as a nonprofit (under Section 501(c)(3) of the IRS code), conduct an annual audit “performed by an independent certified public accounting firm,” and have been in operation since Dec. 31, 1999. (This “grandfather” provision, included in the Affordable Care Act, allowed existing HCSMs to continue operation but precluded the creation of others.) Further, group members must “share a common set of ethical or religious beliefs” and “share medical expenses among members in accordance with those beliefs.”

Federal law also requires such ministries to retain members “even after they develop a medical condition.” In other words, an HCSM can’t cancel a person’s membership due to an emerging health issue.

How HCSMs work

Although health care sharing ministries are not insurance companies, many aspects of HCSM programs mirror typical insurance plans. For example, members have either an “unshareable amount” (annual or per-incident) similar to a deductible. This is the amount a member will pay out-of-pocket before other members are asked to help.

HCSM members also contribute a monthly dollar amount (their “share”), much like paying a premium for an insurance policy. The size of the monthly contribution is based on 1) whether a membership covers a single person, a couple, or a family, and 2) which share plan a member chooses. Some sharing ministries also consider a member’s age in setting the monthly share amount. (Under current law, monthly-share contributions to HCSMs are not tax-deductible. Also, health sharing may not be used in conjunction with tax-advantaged Health Savings Accounts​.) 

When a member has a “sharing request” — similar to an insurance claim — he or she submits details of the expense to the HCSM, which determines if the request falls within the ministry’s sharing guidelines. Money to meet approved needs then comes from the contributions of other members. Some sharing ministries ask members to send money directly to fellow members (via check or online transaction). Other HCSMs act as a go-between for the payments, helping ensure that sharing requests are met.

Bear in mind that health sharing ministries are voluntary. Although members pledge to be faithful in making contributions and paying any other fees, there are no legal contracts or guarantees (and, therefore, no guaranteed coverage). Any member who fails to fulfill a ministry’s requirements (including making monthly contributions) is removed from membership.

According to the Alliance of Health Care Sharing Ministries, a trade association, more than 100 health care sharing ministries are in operation in the U.S. Most are small organizations that restrict membership to particular faith groups. At present, only nine offer open membership. This article discusses four of those nine — the four largest: Christian Healthcare Ministries, Medi-Share, Samaritan Ministries, and Liberty Healthshare.

Christian Healthcare Ministries

The nation’s oldest broad-based health care sharing organization is Christian Healthcare Ministries, founded in 1981 under the name The Brotherhood Newsletter. The ministry’s early growth was jumpstarted by Christian financial teacher Larry Burkett, who showcased the organization several times on his daily national radio program. Today, CHM has more than 300,000 members.

Membership is open to any Christian who lives by “biblical principles” (including attending worship regularly if health permits) and agrees to abide by the group’s published guidelines. Although CHM “has no restrictions based on age, weight, geographic location, or health history,” sharing limitations apply for pre-existing conditions (specifics are available in the ministry’s guidelines).

Pricing is done by “unit” — a single person constitutes one unit, a couple is two units. However, all children in a family comprise only one unit. So, for example, a mom and dad with four children would be considered three units, not six.

CHM offers three levels of membership: Gold, Silver, and Bronze (see table below for monthly contributions at each level). Pricing remains the same across all age groups — e.g., a 60-year-old member pays the same as a 30-year-old member.

Members send their contributions to CHM, which in turn forwards the money to members who’ve submitted needs. (Other HCSMs take a more hands-off approach to transferring funds from members to members, as explained in the following sections.)

As one moves down CHM’s Gold/Silver/Bronze scale, the unshareable amount — CHM calls it a member’s “personal responsibility” — increases (see CHM table below). At all three membership levels, the maximum share request per “any medical incident” is $125,000, although members can opt-in to CHM’s “Brother’s Keeper” program that provides higher levels of support for catastrophic bills.

CHM members are free to choose their doctors, labs, and other providers, rather than being restricted to providers within a particular network. Patients are responsible for negotiating the best deal they can get from providers, although the ministry does offer coaching to help members negotiate more effectively. Once a price is negotiated, the bill is submitted to CHM for processing.

While waiting for a share request to be fulfilled, the member may have to go ahead and pay the bill in full or set up a payment plan. The sending of money in response to a share request can take “up to 120 days.” That’s not quick, but it’s not much different than the timeline for the payment of traditional health-insurance claims. CHM sends money directly to the member, who pays the provider (if the bill hasn’t been paid already).

For more detailed information about Christian Healthcare Ministries, visit www.chministries.org.


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Medi-Share

Medi-Share, founded in 1993, bills itself as the “nation’s largest health care sharing community” (more than 400,000 members), and it boasts of “98% customer satisfaction.” An applicant must agree to Medi-Share’s statement of faith and “have a Christian testimony indicating a personal relationship with the Lord Jesus Christ.” Members must also refrain from using tobacco and illegal drugs and not engage in sexual contact outside of man/woman marriage.

Among the major HCSMs, Medi-Share looks the most like traditional health insurance. For one thing, Medi-Share steers its members toward medical providers that belong to a large nationwide PPO network. (Members typically will pay more if using a provider outside the network.)

If a member uses an in-network provider, the provider submits the bill directly to Medi-Share. The Medi-Share staff reviews and discounts the bill and sends the member an Explanation of Sharing (similar to an insurance company’s Explanation of Benefits). If the member hasn’t met his or her “annual household portion,” the member pays the provider directly. Otherwise, the need is shared among other members.

Another insurance-like feature is that Medi-Share members pay $35 out of pocket for a doctor’s visit and $200 for emergency-room treatment.

Medi-Share has no per-incident maximums (as Christian Healthcare Ministries does) but rather an “Annual Household Portion” (AHP), similar to a yearly deductible in a traditional health insurance plan. Monthly share amounts are based on the AHP a member has chosen — AHPs range from $3,000 to $12,000.

A member can reduce the required monthly share by choosing a 70/30 “co-share” option, in which 70% of an eligible need is shared while the member covers 30%. In addition, Medi-Share members who are in good health (no obesity, no high blood pressure, etc.) are eligible for a “Health Incentive Discount” of up to 20% off the usual monthly share.

Pregnancy and childbirth are covered but with some restrictions. Pre-existing conditions are not covered until a member has been with Medi-Share for 36 months.

For seniors, Medi-Share offers an option other HCSMs don’t: a low-cost plan that supplements Medicare Parts A and B — i.e., a health care sharing version of a Medigap plan.

The actual sharing among Medi-Share members is done using individual member accounts at America’s Christian Credit Union. Medi-Share has a limited power of attorney that allows it to move funds from one member account to another.

Learn more about Medi-Share at mychristiancare.org.


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Samaritan Ministries

America’s third-largest HCSM is Samaritan Ministries, founded in 1994 with only 10 families. Today, Samaritan’s membership stands at 300,000 members across more than 90,000 households.

Membership requirements include regular church attendance (which must be confirmed by a pastor). Applicants must pledge to limit consumption of alcohol to “moderate amounts,” not take illegal drugs, and “abstain from any sexual activity outside of traditional Biblical marriage.”

At present, Samaritan offers two levels of membership, “Classic” and “Basic,” although it is beta-testing a third app-based option (“Samaritan Given”). Samaritan’s optional “Save to Share” program helps cover catastrophic costs.

The monthly share required to participate in Samaritan’s Classic program ranges from $227 for a single person to $555 for a household of eight or more. Special rates are available for young adults and single parents.

Share amounts for the Basic program are less overall, but they rise as age increases. For example, a young couple (under 30) pays $200/month for Samaritan Basic, while a couple in their early 60s pays $320/month.

Like CHM (and unlike Medi-Share), Samaritan has no provider network. The ministry encourages members to use doctors and other providers of their choice and to negotiate prices. To assist members in finding the best prices, Samaritan provides online access to the cost-comparison “Healthcare Bluebook.”

Members pay their medical expenses upfront (or set up a payment plan), then submit copies of bills to the Samaritan office for review. Expenses deemed eligible (based on Samaritan’s published guidelines) are then “shared” with other members. Samaritan is unique among the big four HCSMs: members send money to each other directly — i.e., without any centralized system (such as CHM uses) or a common financial institution (the Medi-Share approach). Although the bulk of Samaritan sharing now occurs via individual PayPal accounts, many members continue to use the old-school method of sending fellow members paper checks in the mail — often accompanied by handwritten notes of encouragement.

Under Samaritan’s guidelines, pre-existing conditions are not covered unless a condition seems to have been cured and 12 months have passed without symptoms, treatment, or medication.

See the Samaritan Ministries table below for information about unshareable amounts under the Classic and Basic programs.

The Samaritan website is www.samaritanministries.org.


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Liberty HealthShare

Although Liberty HealthShare has been in existence since the mid-1990s, it didn’t start using that name until 2014. Initially, it was called the Gospel Light Mennonite Church Medical Aid Plan. Since rebranding and reorganizing, Liberty has experienced steady growth and now has more than 200,000 members.

Liberty says it is “specially tailored for individuals who maintain a Christian lifestyle, make responsible choices in regards to health, and believe in helping others.” To become a member, one must “strive to live in accordance with biblical principles,” including not abusing legal drugs and abstaining from the use of illegal drugs. Members also pledge to “exercise regularly and eat healthy foods that do not harm the body.”

Liberty has four membership levels: Liberty Complete (the most comprehensive), Liberty Plus, Liberty Share, and Liberty Select (the least expensive month-by-month).

Liberty Complete shares medical bills up to $1 million per incident. Shareable amounts are significantly less — $125,000 per incident — at the Liberty Plus and Liberty Share levels. Interestingly, Liberty Select — the tier with the lowest monthly contribution — has a $500,000 maximum sharable amount.

As with other HCSMs, members have a deductible-like “Annual Unshared Amount” (see the table below).

Liberty membership includes annual wellness visits (covered at up to $400 per year and not subject to the Annual Unshared Amount). Most maternity and prenatal needs are sharable (except at the Select level). Immunizations are eligible for sharing, too.

During the first two months of membership, sharing is limited to expenses resulting from accidents, injuries, and acute illnesses. During the initial year of membership, a member may not share a need related to a pre-existing condition.

Liberty doesn’t steer members to a provider network. Members can select any provider they choose. Some providers submit bills directly to Liberty HealthShare. In other cases, it’s up to the member to do so.

Liberty’s sharing process is somewhat similar to that used by Medi-Share. Each member sends monthly shares to a “Sharebox” — a designated account over which Liberty has a limited power of attorney that allows it to move funds to another member’s Sharebox as needed. This arrangement facilitates member-to-member sharing, but Liberty itself never takes possession of the money.


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Other ministries

In addition to the four large ministries highlighted above, other broad-based HCSMs include Share Healthcare, Altrua Healthshare, OneShare Health, MCS Medical Cost Sharing, and Sedera Health. Because of state regulations, some groups do not operate in all 50 states.

Not perfect but helpful

We want to stress again that health care sharing is not health insurance. As one HCSM states in its published guidelines, “[We do] not assume any legal risk or obligation for payment of member medical expenses. Neither [the ministry] nor its members guarantee or promise that medical bills will be paid or shared by the membership.”

Even so, HCSMs — now with well over one million members — have a decades-long track record of sharing health-related expenses among people bound by a common Christian commitment. As noted by the Alliance of Health Care Sharing Ministries, “This moral, but not legal, obligation is the glue that holds HCSM communities together.”

As traditional health insurance costs continue to rise, health care sharing ministries fulfill a crucial role for families and individuals who can’t afford health insurance, and those with moral objections to certain government-mandated benefits in traditional health plans.

Protecting against the financial fallout of an unexpected health issue is wise. Many Americans will continue to do so via traditional health insurance. But for others, that protection will take another form — one that is both ancient and timeless: “Bear one another’s burdens, and so fulfill the law of Christ” (Galatians 6:20)

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Money Roundup: Keep Bond Expectations in Check, Your Personal Inflation Rate, and More

Here's our latest collection of interesting reads on investing, personal finance, and stewardship.

We welcome your comments. "Join the Discussion" below!

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Your Tax Dollars at Work

Today is the tax-filing deadline for your 2020 income taxes — a bit later than normal because of COVID. (Taxpayers in areas affected by the February storms that hit Texas, Oklahoma, and Louisiana have until June 15.)

Maybe you're curious about how much money the federal government raises via income and other taxes and how the is money spent.

That information can be quite detailed (federal tax and budget data are voluminous), but here is an overview courtesy of the Congressional Budget Office (CBO), the budgetary arm of Congress.

Last month, the CBO released a series of infographics about Uncle Sam's Fiscal Year 2020 income and spending. Here is the summary chart:

As you can see, the government spent almost twice as much last year as it took in! About 70% of the spending was "mandatory" — i.e., Congress has set certain types of spending on autopilot, including spending on Social Security, Medicare, and various social welfare programs. Such spending isn't subject to the annual appropriations process, and therefore it isn't considered "discretionary."

Coming and going

Where did 2020's revenue come from? Here's the CBO graphic with that information:

As the graphic notes, "payroll taxes" fund Social Security and Medicare. Adding payroll taxes and income taxes together (a total of $2.9 trillion) gives a clearer representation of how much is coming from individual taxpayers. (Strictly speaking, a portion of the payroll tax comes from employers, not directly from workers.)

One could argue (as conservatives often do) that the corporate income tax is paid by individuals, too, since the cost of that tax is passed on to consumers.

Next, here is the spending summary for Fiscal Year 2020:

 

 

This graphic shows some of the COVID-related expenditures that began last year, including the Paycheck Protection Program and the first round of Recovery Rebates (i.e., stimulus payments) sent to individuals and households.

Footing the bill

Here is one more chart — this one from www.federalbudgetinpictures.com (a site run by the Heritage Foundation). It's based on 2018 IRS data and it shows how the income-tax burden was spread across various income groups:

 

Can you balance the budget?

As Congress debates changes in tax policy and another sharp increase in federal spending, these graphics will help you put those debates in context. On the revenue side, the top 10% of earners pay more than 70% of all income taxes. On the spending side, "mandatory" expenditures account for more than two-thirds of the federal budget, while "discretionary" spending is less than 25% percent. The cost of interest accounts for the rest. 

Want to try your hand at balancing next year's federal budget? There's an online tool for that. Let us know if you can do it!

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