Are Medical Cost-Sharing Programs Tax Deductible?
Medical cost-sharing programs are becoming a cost-effective alternative to conventional health insurance, although they are not insurance themselves. Like-minded members make monthly contributions to a common health-sharing organization. These health-sharing contributions are not deductible for federal income tax purposes.
What is a Medical Cost-Sharing Program?
Healthsharing programs are a voluntary Christian-based alternative to conventional insurance facilitated by non-profit 501(c)(3) organizations. Members contribute "monthly shares" based on their needs and preferred health-sharing program. This enables the cost-sharing of eligible medical expenses among the members.
Note that a healthsharing program is not insurance. It is a group of people who share common beliefs and values and contribute a certain amount of money to make medical care affordable.
Are Health-Sharing Programs Tax Deductible?
Under the current law, members' monthly shares to their healthsharing organizations are not deductible as medical expenses for federal income tax purposes.
But many people join healthsharing ministries because the monthly contribution is much lower than paying for a traditional health insurance plan, even after accounting for the tax deduction.
Is a Healthsharing Program Worth it?
A medical cost-sharing program offers lower monthly shares compared to traditional commercial health insurance premiums. Monthly share amounts for members of Christian-based ministries are up to 50% less than what conventional insurance companies charge in premiums.
Example: Data from the Kaiser Family Foundation indicates that the current yearly cost of a family health insurance plan without an Affordable Care Act subsidy is more than $22,000. This amounts to an out-of-pocket premium of $16,500 after tax for self-employed families in the 25% tax bracket.
If a family with an effective 25% tax bracket joins a healthsharing ministry and contributes monthly shares of $11,000 a year, it saves $11,000 before tax and $3,500 after tax per year.
Plus, the health-sharing programs offer flexibility in choosing your doctor, specialist and medical facility. Members are not limited to a network or location and need no referrals when choosing their doctors.
In a healthsharing ministry, you're supported by like-minded members who value a Christian lifestyle, advocate for healthy living and are good stewards of their resources.
How Does a Healthsharing Program Work?
A healthsharing program involves selecting a cost-sharing option based on age, family size and income. Members contribute a monthly share amount based on their selection. For instance, Liberty HealthShare's monthly share amount for a single individual starts as low as $119.
The program includes an Annual Unshared Amount—the amount you are responsible to pay before sharing can take place. After sending your share, it is matched to eligible medical expenses submitted by other members in a secure online portal.
What Expenses are Eligible in Healthsharing Programs?
The Liberty HealthShare ministry upholds Christian values that help lessen the financial health burdens of its members. The ministry allows only healthy lifestyle options for cost-sharing. Eligible medical expenses include the following:
- Wellness and screening appointments
- Ancillary therapies
- Physical and clinic visits
- Home health care
- TeleHealth visits
- Medical testing
- Ambulance transport
- Urgent care
- Emergency care
- Surgery and hospital care
- Prenatal and maternity care
The ministry's pre-existing conditions and restrictions on sharing apply—limiting medical expense sharing eligibility. Check the Sharing Guidelines online for more information.
Explore Liberty HealthShare's Sharing Programs
If you're looking for a ministry that connects you to a healthy lifestyle community, look no further than Liberty HealthShare. Liberty HealthShare is not insurance. We offer Christian healthshare programs for singles, couples, families and seniors.