Healthcare Giants Avoid $34 Billion in Taxes Post-2017 Tax Law, Patient Care Impacted

Tax Breaks, Rising Profits, and What It Means for Insurance

When the 2017 Tax Cuts and Jobs Act went into effect, it reshaped corporate tax obligations across industries. Few sectors have felt the ripple effects as dramatically as healthcare and insurance. A recent analysis from advocacy groups Americans for Tax Fairness and Community Catalyst puts hard numbers behind the trend, showing how tax savings have translated into record profits for major insurers, hospitals, and pharmacy conglomerates.

Billions Saved, Profits Soaring

The report reveals that seven large U.S. healthcare corporations—including four leading insurers (Centene, Cigna, Elevance, and Humana), two major hospital chains (HCA Holdings and Universal Health Services), and CVS Healthcare—avoided more than $34 billion in federal taxes after the law’s passage.

Average profits for these companies jumped by 75 percent, climbing from about $21 billion before the law to nearly $35 billion afterward. Yet, their effective tax rates barely shifted. The savings were fueled by the corporate tax rate dropping from 35 percent to 21 percent, combined with new opportunities to move profits offshore and exploit loopholes.

“The promise was that tax cuts would benefit consumers and workers. What we’ve seen is that the gains flowed mainly to shareholders and executives.”
— Americans for Tax Fairness report

Where the Money Went

Despite massive savings, the windfall did not translate into reduced premiums or broad wage growth. Instead, the funds largely benefited Wall Street and C-suites.

• Stock buybacks jumped 42 percent

• Dividends rose 133 percent, totaling an average of $5.6 billion

• Executive pay packages grew by more than $100 million collectively

• Employee wage growth was modest by comparison

For insurers, this raises a difficult question: How do profit strategies square with the industry’s responsibility to provide accessible, affordable care?

The Claims Denial Problem

One of the more troubling findings centers on Medicare Advantage plans. Insurers like Centene, Cigna, and others have faced sharp criticism for denial practices. In Centene’s case, 93 percent of denied claims were overturned when appealed.

Cigna’s utilization management subsidiary, EviCore, has also been flagged for a business model that appears to incentivize denials. With more than 100 million insured lives affected by such decisions, this is more than a customer service issue—it strikes at the heart of compliance, trust, and healthcare outcomes.

“When denial rates are overturned at such high levels, it suggests the system is not working as intended for patients.”
— Community Catalyst

Hospitals in the Spotlight

Hospitals are not immune from scrutiny either. HCA and Universal Health Services benefited from the same tax advantages but have faced repeated allegations of overbilling and poor care environments. For insurers, these hospital practices can directly affect claims costs and provider negotiations, creating additional tension in an already strained system.

Why This Matters for the Insurance Industry

For insurance professionals, these findings underscore a dual challenge. On one hand, industry profitability ensures financial stability and shareholder confidence. On the other, the perception of prioritizing profits over patients is increasingly under the microscope from lawmakers, regulators, and the public.

The advocacy groups behind the report are urging Congress to revisit corporate tax oversight and hold healthcare giants accountable for reinvesting in care quality. Whether or not legislation changes, the narrative is clear: the industry must demonstrate that its success aligns with the well-being of the customers it serves.