Healthcare Giants Avoid $34 Billion in Taxes Post-2017 Tax Law, Patient Care Impacted
A recent report by Americans for Tax Fairness and Community Catalyst reveals that seven major U.S. healthcare corporations have collectively avoided over $34 billion in federal taxes following the 2017 Tax Cuts and Jobs Act, commonly known as the Trump-GOP tax law. The study focuses on four leading health insurers—Centene, Cigna, Elevance (formerly Anthem), and Humana; two for-profit hospital chains—HCA Holdings and Universal Health Services; and the CVS Healthcare pharmacy conglomerate.
The report identifies a 75% increase in average profits for these companies, rising from approximately $21 billion pre-legislation to around $35 billion afterward, while their effective federal tax rates remained largely unchanged. This enhanced profitability stems chiefly from the reduction of the corporate tax rate from 35% to 21%, combined with expanded opportunities to exploit tax loopholes and offshore profit shifting provisions introduced by the law and subsequent GOP tax extensions. For example, Cigna reportedly saved an estimated $181 million in taxes through offshore holdings of $2.5 billion. The groups found that these tax savings were not channeled into customer cost reductions or meaningful wage improvements for employees. Instead, the surplus funds were primarily allocated to shareholder returns—including a 42% rise in stock buybacks and a 133% increase in dividends averaging $5.6 billion—and substantial executive compensation increases averaging $100 million for the leading executives, contrasting with modest average employee wage increments.
Furthermore, the report highlights an uptick in insurance claim denials in Medicare Advantage plans operated by the major insurers, with overturn rates upon appeal reaching as high as 93% for Centene, indicating potential compliance and coverage issues. The Cigna-owned utilization management provider, EviCore, reportedly supports a business model of increasing denials to reduce insurer costs, affecting coverage decisions for over 100 million insured individuals.
Additionally, the hospital chains HCA and Universal Health Services, despite significant tax savings, have faced repeated allegations of patient overbilling and substandard care environments. The advocacy groups recommend congressional oversight to ensure that highly profitable healthcare companies contribute fair tax revenues and enhance patient care quality, underscoring concerns that prioritizing financial returns may compromise healthcare outcomes for the American public.