This post was written by Michael J. Wynne.
Last week, in Provena Covenant Medical Center v. Department of Revenue, the Illinois Supreme Court issued a decision in which it denied a property tax exemption for a Catholic hospital. The Court denied the exemption, in part, because the amount of charity care provided by the hospital was insufficient. However, the chilling national repercussions some portend for the Provena Covenant decision, with its inquiry into how much charity is enough to justify a property tax exemption, may ultimately be dwarfed by the repercussions of the new federal health care legislation. By 2014, under the new federal legislation, the extended coverage offered under Medicaid and the insurance exchanges will displace much of the charitable patient care that hospitals have traditionally dispensed. As hospital charitable patient care ebbs, so too may ebb the state and local grants of exemption for hospital properties.
To learn more about property tax implications of the Provena Covenant decision and the new federal health care legislation, read our full alert.