Congress quietly expands tax breaks for unregulated health ministries

What it does

This bill expands Health Savings Accounts (HSAs) by allowing people covered by government health plans (Medicare, Medicaid, CHIP) and health care sharing ministries to open HSAs, loosens the definition of qualifying high-deductible health plans, permits HSA funds to pay for health insurance premiums directly, and expands what counts as a medical expense to include direct-pay physician arrangements and over-the-counter drugs. The primary beneficiaries are higher-income individuals who can use HSAs as tax-advantaged savings vehicles and the health care sharing ministry sector.

Why we flagged it

The bill's core function is to expand HSA eligibility and tax benefits for higher-income savers, but it also creates a significant regulatory carve-out for health care sharing ministries by exempting them from insurance regulations while allowing their fees to be treated as medical expenses. This dual mechanism—tax expansion plus regulatory exemption—is the bill's true character.

• Sections 5–6 treat health care sharing ministries as non-insurance entities eligible for HSA funding, effectively exempting them from insurance regulation while subsidizing them via tax code.

What the text implies

• Health care sharing ministries are unregulated entities that do not guarantee coverage or payment of claims; allowing HSA funds to pay their fees shifts financial risk from regulated insurers to individuals, particularly lower-income savers who may not understand the difference.
• Expanding HSA eligibility to Medicare and Medicaid beneficiaries may incentivize higher-income seniors and dual-eligible individuals to shift to HSA-compatible plans, potentially destabilizing traditional Medicare and Medicaid risk pools by removing healthier, wealthier enrollees.

The full analysis lists 5 implications of this text.

Who stands to gain

health care sharing ministries; high-income individuals and families; concierge medicine providers