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Health insurance companies got $34 billion in tax reform savings

September 6, 2025

Medical costs have gotten a lot of attention lately.

Healthcare activists are still parsing what exactly the One Big Beautiful Bill (OBBB) Act means for popular federal medical plans.

Most of the new law’s cuts will affect Medicaid, the public insurance program that helps cover medical costs for low-income families, some older adults, and people with disabilities. But it also changes who is eligible to receive Medicaid and Medicare benefits, as well as affects access Affordable Care Act plans, still called Obamacare by many.

All these new provisions could increase health care costs for all Americans.

That news alone can make a lot of us feel queasy. But there’s a new medical tax symptom.

TCJA tax benefits for health care giants: A just-released report charges that major health care companies used the Tax Cuts and Jobs Act (TCJA) of 2017, the major Republican tax reform bill that preceded the OBBB, to pad their bottom lines at the expense of patients.

Those charges are detailed in Sick Profits: How Healthcare Companies Have Gotten Richer From The Trump Tax Cuts While Submitting Their Customers And Patients To Higher Costs And Substandard Care.

The joint report is from Americans for Tax Fairness (ATF) and Community Catalyst is based in part on the tax analysis of the Institute for Taxation and Economic Policy (ITEP). As regular readers of the ol’ blog have already guessed, it gets this weekend’s Saturday Shout Out.

And yes, there’s a tax angle. In the report, public advocacy groups say seven major health care corporations were able to avoid $34 billion in taxes thanks to the TCJA corporate tax rate reduction.

That tax benefit, adds the report, came while the companies were increasing costs, denying care to customers, and cutting staff.

Major medical’s major tax savings: As usual, I’ll let you read the document at your leisure this weekend. But here are a few highlights.

The seven firms examined in the report include four health insurance companies (Centene, Cigna, Elevance [formerly Anthem], and Humana, two hospital operators (HCA Holdings and Universal Health Services), and CVS Healthcare, which in addition to its signature pharmacy chain owns the insurer Aetna and various clinics.

These companies saw their average annual collective profits rise by 75 percent, from around $21 billion to roughly $35 billion, between the four-year stretch prior to the major tax reform law enacted during Donald Trump’s first term and the seven years after, according to the report.

Health care company profits after TCJA

But, the report adds, together these companies paid essentially the same average annual federal income taxes in the latter period as the former, representing a collective tax savings of $34 billion due to the law.

Finally, the report notes that in passing the OBBB, Congressional Republicans rejected raising the corporate rate to help pay for the $4.5 trillion price of extending other TCJA laws that were set to expire at the end of this year.

“Contrary to the promises made by the 2017 tax law’s advocates, healthcare corporations (like the rest of Corporate America) failed to use their tax savings to lower costs for customers or meaningfully boost worker pay,” write the report’s authors. “Instead, much of their windfall was used to hike the salaries of top executives and increase shareholder payouts through stock buybacks and dividends.”

Now, I’m off to take a Tums and watch some Navy football.

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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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