This is a golden arrangement.
For North Carolina’s working and middle-class families, the cost of this arrangement is both direct and diffuse.
The most obvious impact is the inflated cost of care. Despite their tax benefits, nonprofit hospitals routinely charge commercial insurance plans, and their patients, the same, if not higher, prices than for-profit competitors. This drives up premiums and out-of-pocket costs, especially for families whose income disqualifies them from subsidies but cannot absorb $1,500 ER bills without financial strain.
The indirect burden is equally damaging.
Every dollar these hospitals avoid in taxes is a dollar unavailable to counties and municipalities who maintain roads, fund schools, and staff police departments. When a hospital system sits tax-free on hundreds of millions in prime downtown property, the rest of the tax base picks up the slack.
In theory, the trade-off is justified: nonprofit hospitals are expected to provide charity care — free or reduced-cost services for those who can’t pay. In practice, many spend far less on such care than they receive in tax breaks.
The result is a net outflow of public wealth into privately governed institutions with little oversight.