Sponsors (10)
The bill makes HCSM membership fees tax-deductible for itemizers, lowering costs for some participants but increasing the risk that people will substitute unregulated sharing ministries for insurance, with potential consumer-protection, regulatory, and fiscal consequences.
Taxpayers who pay health care sharing ministry (HCSM) membership fees can deduct those payments as medical expenses, lowering taxable income for filers who itemize.
Members of HCSMs who itemize may face lower after-tax cost for sharing medical expenses starting in 2026, improving affordability for some who use these programs instead of traditional insurance.
People may be encouraged to choose HCSMs over regulated insurance, exposing members to uncovered claims and reducing consumer protections.
The deduction primarily helps taxpayers who itemize, so lower- and middle-income people who take the standard deduction see little benefit, while the resulting revenue loss could increase deficits or shift tax burdens.
Classifying HCSMs as not insurance for tax purposes may create regulatory ambiguity and complicate enforcement of state consumer-protection and insurance laws.
Based on analysis of 2 sections of legislative text.
Makes payments to qualifying health care sharing ministries deductible medical expenses and declares those ministries are not insurance for federal tax purposes.
Official title: To 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 March 11, 2025 by Mike Kelly · Last progress March 11, 2025
Allows payments to qualified health care sharing ministries to be treated as deductible medical expenses on individual income tax returns, and clarifies that such ministries are not "health plans" or insurance under the Internal Revenue Code. The change applies to taxable years beginning after December 31, 2025 (effectively Jan 1, 2026).