section 223(d) of the Internal Revenue Code of 1986, as amended by section 4, is further amended by adding at the end the following new subparagraph: (D) Inclusion of medical care service arrangements The term qualified medical expenses shall include— (i) periodic fees paid to a physician for a defined set of medical services or for the right to receive medical services on an as-needed basis, and (ii) amounts prepaid for medical services designed to screen for, diagnose, cure, mitigate, treat, or prevent disease and promote wellness. . (b) Arrangement not To be treated as health insurance Subsection (c) of section 223 of the Internal Revenue Code of 1986, as amended by section 2(b), is further amended by adding at the end the following new paragraph: (4) Treatment of medical care service arrangements An arrangement under which an individual is provided medical services in exchange for a fixed periodic fee or payment for such services shall not be treated as a health plan, insurance, or arrangement described in paragraph (1). . (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2023. 6. Periodic provider fees treated as medical care (a) In general Section 213(d) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (12) Periodic provider fees Periodic fees paid for a defined set of medical services provided on an as-needed basis shall be treated as amounts paid for medical care. . (b) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2023. 7. Restoring lower penalty for nonqualified distributions (a) In general Section 223(e)(4)(A) of the Internal Revenue Code of 1986 is amended by striking 20 percent and inserting 10 percent . (b) Effective date The amendments made by this section shall apply to distributions made in taxable years beginning after December 31, 2023. 8. Treatment of health care sharing ministries (a) Inclusion as medical expenses