A recent article from the Johns Hopkins Bloomberg School of Public Health asks a question that deserves far more attention:
Nonprofit hospitals receive billions of dollars in tax exemptions every year. What are their communities actually getting in return?
The Johns Hopkins article, “Nonprofit Hospitals Get Billions in Tax Breaks. What Do Their Communities Get Back?”, highlights an extraordinary disparity between the value of nonprofit hospital tax exemptions, the amount hospitals report as community benefit, and what actually reaches patients and communities in the form of charity care and measurable improvements in health.
This should not simply be a debate about whether hospitals are doing enough. It should also be a discussion about whether we are using these enormous financial resources in the most effective way possible.
Billions in Tax Benefits But What Counts as Community Benefit?
Most community hospitals in the United States, about 58%, operate as nonprofits. In exchange for their tax-exempt status, they are expected to provide benefits to the communities they serve.
The numbers are substantial.
Johns Hopkins cites research estimating the value of nonprofit hospital tax exemptions at $37.4 billion in 2021. Even more striking, just 7% of nonprofit hospitals received more than half of the total value of those exemptions.
Yet researchers found that approximately one in four nonprofit hospitals received more through its tax exemption than it reported spending on total community benefits. About three-quarters received more in tax benefits than they provided in free care alone.
That does not necessarily mean hospitals are failing their communities. It does mean we should ask exactly what taxpayers are purchasing through the exemption.
That question becomes more difficult because there is no universally accepted definition of community benefit.
Johns Hopkins researcher Hossein Zare estimated that nonprofit hospitals spent approximately $94 billion on community benefits in 2022. Include disputed categories such as bad debt and the figure can rise to approximately $121 billion. The American Hospital Association has calculated an even higher figure of approximately $129 billion.
When reasonable people can differ by tens of billions of dollars over what constitutes a community benefit, we have an accountability problem.
Hospitals Have a Defense And Some of It Is Legitimate
The hospital industry’s response should not simply be dismissed.
Hospital representatives argue that the accounting system does not capture everything nonprofit hospitals contribute to their communities.
Deidre Griffith of BJC Health System told the Johns Hopkins conference that she was “99% sure” hospitals are underreporting their community-benefit contributions because preventive and community-health activities are not always captured by existing reporting mechanisms.
The Catholic Health Association offered another important argument: nonprofit hospitals reinvest their surpluses in their patients, facilities and communities rather than distributing profits to shareholders. Its representative cited an industry estimate suggesting nonprofit hospitals provide approximately $2 in community benefits for every $1 in forgone taxes.
There is also the reality that hospitals increasingly serve as the healthcare safety net in communities where public-health infrastructure is weak. Hospitals fund screenings, education, prevention programs and other services that may never appear as traditional charity care.
Those arguments have merit.
But they do not resolve the central issue.
Are these billions of dollars producing measurable improvements in community health?
Johns Hopkins researchers found only a small association between community-benefit spending and health outcomes. That should concern hospitals, taxpayers, policymakers and community leaders alike.
There Is Another Problem: Who Is Really Paying?
One of the most interesting observations in the Johns Hopkins discussion came from health economist Gerard Anderson.
Private insurers, he noted, pay hospitals approximately two-and-a-half times Medicare rates for the same services. Anderson consequently raised an uncomfortable question: Are commercially insured employers and employees effectively financing some of these community benefits through higher hospital prices?
That matters enormously to small businesses.
Higher hospital prices contribute to higher insurance premiums. Higher premiums make employer-sponsored health insurance more difficult for small employers to offer. Employees then face larger payroll deductions, and some employers ultimately stop offering coverage altogether.
The irony is hard to miss.
We can spend billions addressing the consequences of people lacking affordable healthcare while simultaneously allowing the underlying cost of healthcare to push more working families out of insurance.
There may be a better way.
What If Community Benefit Helped People Buy Health Insurance?
Instead of asking hospitals to invent more programs, conduct more health fairs or absorb more uncompensated care, why not use a portion of community-benefit resources to help low- and moderate-income working people obtain and maintain comprehensive health insurance?
That is where a premium-assistance model such as TexHealth Central Texas offers an alternative.
TexHealth does not operate another health plan or duplicate the healthcare delivery system. Instead, it helps eligible employees of small businesses afford private health insurance by subsidizing a portion of their monthly premium.
The concept is straightforward:
Employer + Employee + Community Assistance = Affordable Coverage
The employer continues contributing toward coverage. The employee continues contributing and has a personal stake in maintaining insurance. Premium assistance fills part of the affordability gap.
Instead of waiting until an uninsured individual becomes sick and arrives at a nonprofit hospital needing uncompensated care, community-benefit dollars could help keep that individual insured in the first place.
That changes the equation.
From Charity Care to Coverage
Consider what happens when community-benefit funding is directed toward premium assistance.
The employee gains access to an insurance network, primary care, preventive services, specialists, prescription benefits and hospital coverage.
The employer gains a more affordable employee benefit that can improve recruitment and retention.
The hospital gains insured patients rather than uninsured patients requiring charity care or generating bad debt.
The insurer gains additional covered lives.
And the community gains residents who have a better opportunity to establish relationships with physicians and obtain care before a condition becomes an emergency.
This is not charity in the traditional sense.
It is an investment in coverage.
And unlike some broadly defined community-benefit expenditures, the results are highly measurable. A hospital contributing to premium assistance can know how many businesses were supported, how many employees received assistance, how much money went directly toward premiums, and how many people maintained health insurance because of the investment.
Stop Treating the Emergency Room as the Safety Net
One of the most important points in the Johns Hopkins discussion came from Eva Stahl of Undue Medical Debt, who warned against expecting hospital financial assistance to compensate for weaknesses in insurance coverage.
Her point was simple: “Financial assistance is not a magic bullet. It is a safety net.”
Exactly.
We should not build health policy around catching people after they fall.
Premium assistance addresses the problem earlier.
For nonprofit hospitals, that creates an intriguing possibility: use community-benefit dollars upstream to help people remain insured rather than spending those dollars downstream after patients are already sick, uninsured or unable to pay their hospital bills.
A Potential Win for Hospitals, Employers and Communities
This does not require abandoning the nonprofit hospital model or accusing hospitals of failing their charitable missions.
It requires redefining success.
If nonprofit hospitals receive substantial tax advantages because society expects them to improve the health of their communities, then we should encourage investments with demonstrable outcomes.
Johns Hopkins’ Joshua Sharfstein offered perhaps the most important standard from the conference:
“No hospital is doing its job fully until its community is getting healthier.”
Premium assistance fits that standard.
A nonprofit hospital or health system could dedicate a portion of its community-benefit investment to a qualified premium-assistance organization. That organization could leverage the hospital’s contribution alongside employer and employee dollars to purchase actual health insurance coverage for working people who otherwise struggle to afford it.
The hospital would not have to create another insurance program, administer eligibility, collect employer documentation or manage monthly premium assistance. An established organization such as TexHealth can provide that infrastructure.
Most importantly, the investment would produce something everyone can count:
People with health insurance.
The Johns Hopkins article raises the right question: What are communities getting in exchange for billions of dollars in nonprofit hospital tax exemptions?
Perhaps we should add another:
What if we used more of those community-benefit dollars to make sure people were insured before they ever needed charity care?
For hospitals looking for a measurable, accountable and sustainable way to demonstrate community benefit, premium assistance deserves a place in that conversation.
Source: Johns Hopkins Bloomberg School of Public Health, “Nonprofit Hospitals Get Billions in Tax Breaks. What Do Their Communities Get Back?” August 31, 2026.