Taxation 'hammer' is poised over IHC

The tax man is knocking again on the door of Intermountain Health Care.

His name is Sen. Michael Waddoups, R-Taylorsville, who said late Tuesday he plans to revive his efforts in an overnight drafting of SB61 for introduction today in the Senate.

The new bill, he said, will no longer require IHC to divest itself of its insurance business. Instead, Waddoups said his new bill would threaten to take away the company's tax exemption in 2008.

"There'll still be a hammer," he said. "It will remove the tax exemption." That exemption applies to the entire corporate umbrella, Waddoups said, including the company's insurance business. The intent, he said, is to focus the company on cooperating with a task force to decide what is ultimately best to do.

"The hammer is not intended to be the end result," Waddoups said. "It's to make sure everybody's at the table."

The approach is puzzling to IHC spokesman Daron Cowley, who said the health care organization has been a willing player since the issue first surfaced several weeks ago.

"IHC believes it is appropriate to carefully study major changes in public health care," he said, but added the proposed substitute causes pause.

"We would be concerned that the bill now proposes a tax regardless of the findings of the task force. Such a requirement would seem to predetermine the outcome of the task force and seems at odds with the spirit of objective inquiry."

IHC, with its integrated health-care system of insurance, hospitals, clinics and health-care providers, has come under attack this session because of allegations it monopolizes the market.

Its tax-exempt status has been repeatedly challenged over the years but ultimately upheld by multiple governmental entities because of the millions of dollars it delivers in charity care.

Because of that, Cowley said IHC officials are left without answers as to why some members of the Legislature have taken aim at the organization, seeking to dismantle a system they say is working and keeping costs low.

Critics, on the other hand, say IHC is less about charity and more about directing its "reserves" to accounts that pay for capital improvements, reinforcing an exclusionary system that unfairly dominates the market and leaves other hospital chains paying taxes.