S.653 - 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. (119th Congress)
Summary
S.653 aims to amend the Internal Revenue Code to treat membership in health care sharing ministries (HCSMs) as a medical expense. It also clarifies that HCSMs should not be considered health plans or insurance for the purposes of the code. The bill was introduced in the Senate by Mr. Budd on February 20, 2025, and referred to the Committee on Finance.
Expected Effects
If enacted, this bill would allow individuals who are members of HCSMs to deduct their membership costs as medical expenses on their taxes. It would also provide legal clarity by explicitly stating that HCSMs are not to be treated as insurance companies under federal law. This could potentially increase the appeal and accessibility of HCSMs as an alternative to traditional health insurance.
Potential Benefits
- Allows members of health care sharing ministries to deduct their membership fees as medical expenses, potentially reducing their tax burden.
- Clarifies the legal status of health care sharing ministries, distinguishing them from traditional insurance plans.
- May increase enrollment in health care sharing ministries, providing an alternative healthcare option for some individuals and families.
- Could potentially reduce the demand on traditional health insurance markets, offering a different model for healthcare financing.
- Provides greater financial flexibility for individuals who choose to participate in health care sharing ministries.
Potential Disadvantages
- May reduce tax revenue for the government due to increased medical expense deductions.
- Could potentially lead to adverse selection in the health insurance market if healthier individuals opt for health care sharing ministries, leaving sicker individuals in traditional insurance pools.
- May create confusion among consumers regarding the differences between health care sharing ministries and traditional insurance, potentially leading to misunderstandings about coverage.
- Could potentially lead to less comprehensive coverage for individuals relying on health care sharing ministries compared to traditional insurance plans.
- May not be subject to the same regulatory oversight as traditional insurance, potentially leaving members with fewer legal protections.
Most Disadvantaged Areas:
Constitutional Alignment
The bill's alignment with the US Constitution is primarily related to the power of Congress to tax and spend, as outlined in Article I, Section 8. By amending the Internal Revenue Code, Congress is exercising its authority to establish and modify tax laws. Additionally, the bill could be argued to indirectly relate to the First Amendment's guarantee of religious freedom, as health care sharing ministries often have a religious basis. However, the bill does not directly establish or prohibit any religion, so the connection is tenuous.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).