Health Insurers Avoid $34 Billion in Taxes Amid Rising Claims Denials

What's Happening?

A report by Americans for Tax Fairness and Community Catalyst reveals that major health insurers, including Centene, Cigna, and UnitedHealth, avoided $34 billion in taxes due to the Tax Cuts and Jobs Act. These companies have increased profits by 75% since 2017, while simultaneously denying more claims, cutting staff, and raising patient costs. Centene, for example, increased Medicare Advantage prior authorization denials by 14% and repurchased over $3 billion in stock in 2024. The One Big Beautiful Bill Act further extended tax breaks for these companies, while cutting Medicaid and removing premium tax credits from the Affordable Care Act.

Why It's Important?

The avoidance of taxes by health insurers, coupled with increased claims denials and higher patient costs, highlights significant challenges in the U.S. healthcare system. The financial benefits gained by these companies have not translated into improved patient care or outcomes, raising concerns about corporate priorities. The extension of tax breaks and Medicaid cuts under the OBBBA could lead to millions losing healthcare coverage, exacerbating inequalities in access to medical services. This situation underscores the need for policy reforms to ensure that tax benefits are used to enhance healthcare delivery rather than shareholder profits.

What's Next?

The implications of the OBBBA and ongoing tax avoidance by health insurers may prompt calls for legislative changes to address healthcare inequities. Advocacy groups and policymakers might push for reforms to reinstate premium tax credits and protect Medicaid funding. Additionally, there could be increased scrutiny on insurers' practices regarding claim denials and stock buybacks. The healthcare industry may face pressure to prioritize patient care and transparency in financial operations, potentially leading to regulatory actions or public campaigns demanding accountability.