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AHA urges Congress to protect charitable deductions as it considers major tax reform

February 22, 2013


 

 As it considers comprehensive tax reform, the House Ways and Means Committee should exclude charitable giving from any limitations it may propose on federal tax deductions, Pam King Sams, Children’s National Medical Center’s executive vice president for development, told the committee last week.

“The ability to obtain taxexempt financing and to accept tax-deductible charitable contributions are two key benefits of hospital tax-exemption that work to make hospital services available where needed,” she said.

Testifying on behalf of the AHA at a hearing on tax reform and charitable contributions, Sams said hospitals operate in a tough financial environment and “rely on community support more than ever because other funding sources have become increasingly limited.”

She cited a January report from Moody’s Investor Service that maintained a negative outlook for nonprofit health care for 2013, with federal cuts to health care spending, limited reimbursement increases from commercial insurers and a tepid economy as causes.

“Since 2010, Medicare hospital payments have been reduced by $250 billion over 10 years,” she said. “As a result, hospital Medicare margins stand at an average negative 7%.” In 2011, Sams noted that Medicaid overall paid hospitals $6 billion less than the cost of treating Medicaid patients.

“Think of the incentive of the charitable contribution tax deduction as a key that helps provide continued access to hospital services in communities across the country,” she told the committee.

For more on Sams’ testimony, click on: http://tinyurl.com/abrvcxx.
The table on the right shows the growth in uncompensated care provided by America’s hospitals since 1995.