For Philly's nonprofit hospitals, GOP tax bill would inflict real pain

Sunday, 12 November 2017, 10:30:24 AM. Nonprofit hospitals here and across the nation face a new threat in the tax reform plan unveiled recently by House Republicans. Nonprofit hospitals include most of the largest and most prestigious ones in the Philadelphia area.
Nonprofit hospitals have had much to fear from Congress recently. The Senate came within one vote of repealing much of the Affordable Care Act, which would have left millions of patients uninsured and unable to pay for hospital care. And Congress may soon consider major cuts to Medicare and Medicaid, which could slash reimbursement for many hospital services. Now, nonprofit hospitals face a new threat in the tax reform plan unveiled recently by House Republicans. Nonprofit hospitals include most of the largest and most prestigious ones in the Philadelphia area. Like all major tax changes, the Republican proposal would create winner and losers.  Some of those winners and losers had been expected, but the changes that put nonprofit hospitals in the loser’s column came as a surprise. They would be in for significant hits in at least two ways. First, they would lose an important source of financing for expansion. Nonprofit hospitals raise money for construction projects by issuing tax-exempt bonds that allow investors to avoid paying income tax on the interest. This reduces the interest rates they have to pay to attract investors, which saves them large amounts in project costs. The tax plan would eliminate the exemption for interest on many of these bonds, which would force the hospitals to pay prevailing market rates. For many of them, major new construction could become unaffordable. Second, they stand to lose many of their donations. Donors to nonprofit hospitals receive a...Read more
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