Tax break for faith-based health sharing — but no insurance protections
S. 653 — A bill 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. · Filed by Ted Budd (R-NC) · Introduced Feb 20, 2025 · Referred to committee
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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.
The full analysis lists 4 implications of this text.
Who stands to gain
health care sharing ministries; members of faith-based cost-sharing organizations