Kansas committee hears bill to allow state tax subtraction for health care sharing ministry contributions

The House Committee on Taxation held a hearing on House Bill 24-45 on an income tax subtraction for certain ‘‘health care sharing’’ contributions, hearing proponents who said the programs provide an affordable, voluntary alternative to insurance and opponents who warned of discrimination and limited consumer protections.

Reviser staff told the committee the bill would create a subtraction modification beginning with tax year 2027 for qualified health care sharing expenses and qualified health care shares received by Kansas residents who are members of qualifying health care sharing ministries. The reviser said the measure is written to prevent ‘‘double dipping’’ with any federal tax treatment.

Joel Noble, representing Samaritan Ministries, described how sharing operates ‘‘member to member,’’ saying, “Health care sharing is not insurance,” and explaining that members send monthly shares directly to other members with medical needs. Noble said Samaritan is a 501(c)(3), that the ministry provides share-history reports for members, and that Samaritan directs about 89.3% toward member needs and roughly 10.7% to administration. He also gave examples of scale, saying Samaritan handles roughly $30 million in monthly sharing and recounting cases including a preemie whose shared costs approached $1.7 million.

Noble told lawmakers the bill ‘‘would allow health care sharing members to deduct these shares and the fees they send to the ministries on their Kansas state return,’’ and suggested the state budget impact could be modest — noting that some members otherwise would be on KanCare (Medicaid) and that a reduction in KanCare use could offset costs.

Several committee members pressed on administration and auditability. Representative Sawyer asked how payments are tracked; Noble said ministries provide share-history reports and that electronic transfers or checks create a record members could use if audited. On federal treatment, Noble said proponents are working at the federal level but have not secured nationwide tax parity, so states are pursuing relief in the interim.

Rebecca Schwartz, who participated remotely, spoke about her family’s decision to use Samaritan Ministries for affordability and values alignment, urging the committee that ‘‘even a little bit goes a long way’’ for a family of five.

Opposition testimony came from Laurel Burchfield, advocacy director at Mainstream Coalition, who urged the committee to reject the bill. Burchfield said many ministries require statements of faith, attendance at religious services and other membership criteria and argued that the groups ‘‘are discriminatory organizations’’ able to restrict membership on moral or religious grounds. She also said ministries are not regulated like insurers, are not bound by HIPAA, and may deny a large share of claims; in written materials cited a 2022 Massachusetts study she said found roughly half of submitted claims were deemed ineligible.

The committee did not take a vote on HB24-45 during the hearing. Chair Representative Smith noted the fiscal note in the packet showing an estimated FY27 impact of $400,000 and FY28 impact of $1,200,000. The bill’s proponents and opponents asked lawmakers to weigh consumer protections, state fiscal impact and parity with insurance when considering the measure.

What comes next: the hearing closed without committee action that day. If advanced, the bill would move to committee work and floor scheduling where lawmakers could consider amendments, fiscal estimates and any further guidance requested by members.