Oklahoma lawmakers advanced a bill that would create an income tax deduction for members of a community-based option to cover medical expenses, called health care sharing ministries.
What are health care sharing ministries?
These ministries are not insurance. They are nonprofits where members have a common set of ethical or religious beliefs and share each other's health care costs. The groups have decades of history in the U.S., with the earliest established in 1981, and are regulated by the IRS and state attorneys general.
The Alliance of Health Care Sharing Ministries said 107 groups have been certified by the Department of Health and Human Services as meeting the federal definition of these ministries.
As of January 2025, the alliance counted 10,832 Oklahoma ministry members, including 3,813 households. But that only covers groups that are members of the alliance, with additional organizations existing outside of it.
The monthly amount members pay is typically lower than full-price premiums for individual major medical coverage. Some Oklahomans are choosing this option amid the expiration of enhanced premium tax credits for the Affordable Care Act Marketplace, which, in combination with rising health care costs, caused premiums to soar for consumers.
But the groups can choose not to share patients’ bills and aren’t subject to regulation by state insurance commissioners.
“If you have a problem with your Marketplace health insurance policy – a claim being denied, and you don't think it should be denied – you can contact the insurance commissioner, and they will get involved on your behalf. They can't do that for a sharing ministry plan because it's not insurance,” said Louise Norris, a Healthinsurance.org health policy analyst.
What would the legislation do?
House Bill 2942, authored by Rep. Derrick Hildebrant, R-Catoosa, and Sen. Julie McIntosh, R-Porter, is one of many policies lawmakers filed this year addressing these ministries. It would allow members to deduct the contributions they make to these ministries on their state income tax returns starting in tax year 2027.
The legislation was passed unanimously out of the House Appropriations and Budget Finance Committee. It now heads to the full Committee on Appropriations and Budget, where it must advance by March 5.
Hildebrant filed the measure last year as a freshman lawmaker, but said he was at his capacity coming in and decided not to run it all the way through.
“I wanted to run it this year,” Hildebrant said. “I've got my legs under me, and I'm really excited to run the bill.”
The legislation title is the “Health Care Sharing Ministry Tax Parity Act,” because Hildebrant said he is seeking to create parity relative to traditional insurance. Employer-paid premiums for health insurance are, for example, exempt from federal income and payroll taxes.
A fiscal analysis forecasts a $477,000 annual decrease in income tax collections based on membership data from the Alliance of Health Care Sharing Ministries. It reported average annual required sharing contributions of approximately $1,500 to $1,600 per member.
The measure would also exclude the funds people receive from these ministries to assist with medical expenses from Oklahoma taxable income. The analysis states the magnitude of this cannot be reliably estimated because of limited data on the amount and frequency of such receipts.
Because the definition of these ministries includes ethical beliefs, Hildebrant said they do not have to be faith-based. Part of the legislation also requires the ministry to have an annual audit.
Hildebrant said this policy began as a constituent request, as he has people in his life who use them. One friend, for example, shared a story with him of how his son cut his leg open on a piece of glass. He was a cash-pay customer. His son got treated, and he submitted the invoice to his ministry, which was paid within 30 to 60 days.
Hildebrant said he’s found people want options on where they go for health care and transparency in where their money is spent.
“And with many health care sharing ministries, you get to see those dollars actually impact the lives of people," Hildebrant said.
The legislation was run through the American Legislative Exchange Conference, where it was adopted as model legislation, Hildebrant said. He added that other states, including Missouri and Indiana, have had similar legislation on the books for years, and states like Ohio and Kansas are considering it.
Hildebrant said he had Gov. Kevin Stitt's recent executive order on medical freedom in mind. He hopes this policy will help more people participate in this alternative form of covering medical bills.
“There are people who have freedom of conscience issues with traditional insurance and paying premiums towards traditional insurances that might cover certain procedures that would violate their consciences,” Hildebrant said. “And so that's one of the benefits that health care sharing ministries offer, is that we are going to assure you that we don't fund certain procedures that might violate your conscience.”
Norris from healthinsurance.org said, although there are stories of people having successful experiences with these ministries, buyers should beware, because some members get left “high and dry.”
She said her concern with lawmakers setting up parity between ACA-compliant and non-ACA-compliant options is that it “muddies the waters” for consumers.
“It's definitely a situation where people just need to be really aware of what they're buying,” Norris said. “Read every fine print detail. I mean, you should do that with regular insurance, too. But if you're buying something that's not ACA-compliant, definitely pay attention to the details.”
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