Sponsor
Theodore Paul Budd
Senator · R-NC
Senator · R-NC
The bill makes membership fees for health care sharing ministries tax-deductible and clarifies their non-insurance status, benefiting members with tax relief and regulatory certainty while raising revenue costs and increasing the risk that members — particularly lower-income people — will be exposed to inadequate coverage and fewer consumer protections.
Taxpayers who participate in health care sharing ministries can deduct membership, sharing, and administrative fees as medical expenses on their federal tax returns, lowering their taxable income.
Members and operators of health care sharing ministries get clearer tax treatment because the bill explicitly excludes these ministries from being treated as health plans or insurance under the tax code, reducing legal and compliance uncertainty.
Individuals who enroll in health care sharing ministries may face substantial unpaid medical bills because these arrangements are not insurance and often lack comprehensive coverage, and the bill's tax treatment could encourage such enrollment.
Consumers, especially low-income individuals, could lose regulatory protections tied to insurance oversight because the bill explicitly excludes ministries from being treated as insurance, leaving them with fewer safeguards.
Treating ministry fees as deductible medical expenses will reduce federal tax revenue, which could increase the deficit or require spending offsets or tax increases elsewhere.
Based on analysis of 2 sections of legislative text.
Allows payments for qualifying health care sharing ministry membership (expense sharing and admin fees) to be treated as deductible medical expenses and clarifies such ministries are not insurance for tax purposes.
Official title: Amend the Internal Revenue Code of 1986 to treat membership in a health care sharing ministry as a medical expense, and for other purposes.
Introduced February 20, 2025 by Theodore Paul Budd · Last progress February 20, 2025
Allows payments for membership in a health care sharing ministry — including the portion that goes to share other members’ medical expenses and administrative fees — to be treated as deductible medical care under the tax code, and adds an explicit rule that such ministries are not treated as health plans or insurance for Internal Revenue Code purposes. Changes apply to taxable years beginning after December 31, 2025.