Oklahoma Bill Aims to Provide Tax Breaks for Health Care Sharing Ministry Members
Oklahoma lawmakers are considering a bill that would allow members of health care sharing ministries (HCSMs) to claim an income tax deduction, potentially offering a more affordable health care option for some residents. The legislation comes as Oklahomans grapple with rising health care costs and the expiration of federal premium tax credits for the Affordable Care Act (ACA) Marketplace.
What are Health Care Sharing Ministries?
Health care sharing ministries are non-profit organizations whose members share a common set of ethical or religious beliefs and voluntarily contribute to cover each other’s medical expenses. They are not insurance, and are regulated differently. The Alliance of Health Care Sharing Ministries reports that 107 groups have been certified by the Department of Health and Human Services.
As of January 2025, the Alliance counted over 10,800 members in Oklahoma, representing approximately 3,800 households. Although, this number only reflects ministries that are part of the Alliance, and other organizations exist independently.
How Would the Legislation Work?
House Bill 2942, similarly known as the “Health Care Sharing Ministry Tax Parity Act,” would permit Oklahoma residents who are active members of an HCSM to deduct their contributions from their state income tax. The deduction would apply to tax year 2027. HB2942 also stipulates that funds received from these ministries to cover medical expenses would be excluded from Oklahoma taxable income.
A fiscal analysis estimates this could lead to a $477,000 annual decrease in state income tax collections, based on average member contributions of $1,500 to $1,600 per year.
Why is This Bill Being Considered Now?
The move comes after enhanced premium tax credits for the ACA Marketplace expired, leading to increased health care costs for many Oklahomans. According to reporting by KGOU, premiums have surged, with some individuals facing monthly costs exceeding $1,000.
Representative Derrick Hildebrant, the bill’s author, stated the legislation aims to create parity with traditional health insurance, where employer-paid premiums are already exempt from certain taxes. He also noted that the bill originated from constituent requests and reflects a desire for more health care options and transparency in how funds are spent.
What are the Potential Concerns?
While proponents argue HCSMs offer a viable alternative, experts caution that they are not equivalent to insurance. Louise Norris, a health policy analyst with healthinsurance.org, warns that members may not have the same protections as those with traditional insurance plans. Unlike insurance, HCSMs are not regulated by state insurance commissioners, meaning there is limited recourse for members if claims are denied. Norris emphasizes the importance of carefully reviewing the terms and conditions of any HCSM before joining.
What’s Next?
HB2942 has already passed the House Appropriations and Budget Finance Committee and is now headed to the full Committee on Appropriations and Budget. It must advance by March 5th to continue moving forward in the legislative process.