California Health Care Corporations are Reaping Billions in Trump Tax Breaks 

Corporate Cash Haul Will Grow as Millions of Californians Pushed Out of Health Care Under HR1 and State Cuts 

Sacramento, CA – A new report from the California Pan-Ethnic Health Network (CPEHN) reveals health care corporations in California are reaping tens of billions of dollars in federal tax breaks from Donald Trump’s 2017 tax law, at the very same time Californians are going without care or are forced into debt because they don’t have health coverage. H.R.1 extended and expanded lavish tax cuts for corporate CEOs and the ultra-wealthy – and millions of Californians are expected to lose health care access as a result. 

“CPEHN’s report underscores two facts California leaders can no longer ignore,” CPEHN Executive Director Kiran Savage Sangwan said. “First – the same giant health care corporations that are squeezing our wallets and driving up health care costs are hauling down billions in tax giveaways that will continue under H.R. 1. Second, California must not sit idly by and let health care corporations get richer while Californians get sicker; Governor Newsom and lawmakers can protect health care by requiring health care companies flush with cash to prioritize patients over profits.”

Among the companies reaping enormous benefits from Trump tax cuts are six for-profit health care corporations with a significant California presence. Their 2024 profits in the state totaled nearly $3B from insurance products alone.  These jaw-dropping profits come as health care costs are squeezing Californians – forcing families into unthinkable choices between food and medicine – with more devastating consequences for our health on the horizon.

• In a California Health Care Foundation poll released last month, seven in 10 Californians reported that health care expenses place a financial strain on their household. 
  
• The same survey found four in 10 Californians have medical debt, including 55% of those with low incomes. Almost half of Latines and those who speak Spanish have medical debt.
  
• Putting further financial strain on California people and families already facing extreme hardship now, H.R.1 will further enrich these corporate CEOs and wealthiest Americans. This federal legislation makes additional 2017 tax cuts permanent, and health care giants, which already pocket billions in profits from California workers and families each year, are among the corporations that stand to benefit from nearly $1 trillion in tax breaks – paid for by slashing health care vulnerable families and workers rely upon. 
  
• State officials estimate that up to 1.8 million Medi-Cal members will lose coverage in the next few years. These people will be forced to pay out of pocket for doctor’s visits, tests, medicines, and treatments or go without the care they need while getting sicker.  
  
• 1.5 million lower-income Californians are forced to pay an average 97% increase in premiums to stay enrolled in Covered California because the Republican-led Congress refused to extend enhanced tax credits that lowered costs for these families. 

On top of this, state policy changes made last year will deny Medi-Cal coverage to an additional one million Californians who are immigrants. Governor Newsom has proposed additional cruel cuts this year; under his plan, 200,000 assylees, refugees and survivors of torture would be kicked out of the Medi-Cal program and separated from their doctors and counselors. 

“State lawmakers last year prioritized maintaining tax breaks and ensuring multi-million dollar profits for corporations over protecting the lives and health of Californians who pick our food, clean our buildings, and do other back-breaking jobs. With care for millions more Californians on the line, state leaders must put all options on the table to ensure corporations pay their fair share,” Savage-Sangwan concluded.

The report calls for elected officials to look for mechanisms to capture profits and tax savings from these companies to support the health care safety net. This could include capping profits in Med-Cal, requiring community investments, robustly regulating hospital staffing to ensure quality patient care, and scrutinizing healthcare mergers and acquisitions that drive up the cost for Californians. 

“What’s happening in California is being replicated across the country: health care corporations are gaining billions in tax cuts while patients suffer,” said David Kass, ATF’s executive director. “Californians’ workers and families should not bear the consequences of unsustainable health care costs while multibillion-dollar corporations are further enriched. All Americans will be better off when health insurers and other health care companies are held to the highest standards of patient and customer care and are expected to pay their fair share of taxes.”

The report was developed by CPEHN, with data assistance from Americans for Tax Fairness.