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Senators ponder varied tax increases, including non-profit hospital tax
Well, hospital executives, this may be it. After years of harassment by Sen. Chuck Grassley and others over the amount of charity care they provide--but virtually no action--Congress may finally take seriously the notion of taxing non-profits that aren't playing nice. Desperate to finance healthcare reform, legislators know that something's gotta give, and opponents have done a pretty good job of painting not-for-profit hospitals as bad guys.
Sure, not all proposals planned in Congress are quite that bad for the hospital industry. Among the ideas floating around the Hill are taxing health benefits, cutting back tax advantages for health savings accounts, lowering the amount employees can contribute to flexible spending accounts and cutting back the itemized tax deduction for medical expenses. Senators are also considering raising taxes on alcoholic and sugar-sweetened beverages--so-called "sin taxes"--that may sound better to many members of the public.
While those notions might spare the hospital industry some major pain, Congress is also seriously considering legislative language that would lower or even eliminate special tax deductions for non-profit Blue plans, or impose an excise tax on non-profit hospitals that don't meet minimum levels of charitable activity or limit charges to the uninsured and indigent. You can be sure that the AHA would send out a veritable army of lobbyists to resist the latter, but they'll face a harder battle than usual. These are unique times.
To learn more about health reform funding:
- read this Wall Street Journal item
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Non-profit tax exemptions under heavy fire
Grassley wants charity care standards in stimulus
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Plan would tax well-insured to cover uninsured
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