By Grant Williams

Washington

Sen. Charles E. Grassley, senior Republican on the Senate Finance Committee, asked a provocative question at a roundtable discussion Tuesday on “Financing Comprehensive Health Care Reform” held by his committee.

“Over the last 40 years, with the creation of federal and state insurance programs such as Medicare and Medicaid, and the growth of private insurance, it has been increasingly difficult to distinguish the activities of for-profit hospitals from the activity of charitable hospitals,” Mr. Grassley said.

If plans of President Obama and Congress to revamp the country’s health-care system wind up providing everyone with health insurance, “presumably hospitals should see a steep decline or the elimination of uncompensated care,” Mr. Grassley said. If so, the senator asked, “does it make sense to retain tax exemption for hospitals?”

Jonathan Gruber, professor of economics at the Massachusetts Institute of Technology, told Mr. Grassley that he agreed with the “spirit of the question.”

But he added: “I will say that there will be, under any reform, some remaining need for uncompensated care. About one-third of uncompensated care today goes actually to the insured who don’t pay their co-payments and deductibles. And the number of uninsured is not going to go to zero” under any changes fashioned by Congress and the president.

Gerald M. Shea, assistant to the president for governmental affairs at the AFL-CIO, in Washington, urged Congress not to tackle the matter of hospital tax exemptions at the same time it makes big adjustments to the country’s health-care system.

“We are concerned about the destabilizing effect of this kind of tax change at the same time as we are asking enormous change from the hospital industry in terms of restraining costs,” he said. “I would suggest to you we ought to focus on that and later, perhaps, once we have universal coverage, look at this question. And not try to do the two things together.”