Tax break for faith-based health sharing — but no insurance protections

What it does

This bill allows people to deduct membership fees and medical expense-sharing payments to health care sharing ministries (religious or faith-based cost-sharing groups) as medical expenses on their taxes, the same way they can deduct insurance premiums and out-of-pocket medical costs. It also explicitly states that these ministries are not insurance or health plans for tax purposes, which shields them from insurance regulations and requirements.

Why we flagged it

The bill's operative mechanism is a targeted tax deduction for a specific category of non-insurance health-cost-sharing entities, combined with an explicit regulatory exemption. It is not a broad tax reform or a general medical-expense expansion; it is a carve-out for faith-based ministries.

What the text implies

• Members of health care sharing ministries will no longer have access to state insurance commissioner oversight, solvency guarantees, or claims-handling dispute resolution — protections that apply to licensed insurers. If a ministry becomes insolvent or refuses to pay a claim, members have no regulatory recourse.
• The tax deduction may incentivize migration away from regulated insurance toward unregulated sharing ministries, potentially fragmenting the insurance risk pool and raising premiums for those who remain in traditional insurance.
• Sharing ministries are not required to cover pre-existing conditions, maintain reserves, or meet actuarial standards. A member could pay years of fees and then be denied coverage for a major illness if the ministry deems it outside their sharing guidelines.
• The bill references section 5000A(d)(2)(B)(ii) 'without regard to subclause (IV)' — this carve-out language suggests the bill is deliberately narrowing the definition of what qualifies, but the full scope of that narrowing is not visible in this text alone.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

Members of health care sharing ministries gain a tax deduction (a concrete benefit), but the bill simultaneously exempts these ministries from insurance regulations, meaning members lose consumer protections (coverage guarantees, solvency requirements, claims-handling standards) that apply to licensed insurers. The trade-off is real: lower taxes for participants, but reduced legal recourse if a ministry fails to pay claims or becomes insolvent.

Who stands to gain

• health care sharing ministries
• members of faith-based cost-sharing organizations

Named in the bill

Internal Revenue Code of 1986, Section 213(d)(1), Section 5000A(d)(2)(B)(ii), Chapter 79, Section 7702B, Section 7702C, health care sharing ministries, Senate Committee on Finance

Where it stands

• Feb 20, 2025 — Introduced · Congress.gov: “Introduced in Senate”
• Feb 20, 2025 — Referred to Senate Committee on Finance · Congress.gov: “Read twice and referred to the Committee on Finance”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

1 lobbying clients named this bill on 1 disclosure filings across 1 quarter, Dec 2025 to Dec 2025. Those filings disclosed $30,000 in lobbying spend. A filing names 2 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 0% of bills with at least one filing.

Ted Budd, the sponsor, reported $300,250 in PAC receipts in the 2026 cycle.

• Solidarity Healthshare — $30,000 on 1 filing

Lobbying Disclosure Act filings through Jan 19, 2026. A filing shows who paid to lobby on a bill it names, not what changed.