IHC Care, Inc. - Page 27




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          Health Association v. Commissioner, 71 T.C. 158 (1978).  In                 
          particular, we found that, like Sound Health Association,                   
          Geisinger HMO was operated for the charitable purpose of                    
          promoting health insofar as its class of possible enrollees was             
          practically unlimited, it had adopted a subsidized dues program             
          for its enrollees, it offered health care services to Medicare              
          recipients at a reduced rate, and it was not operated for the               
          private benefit of its enrollees.  Geisinger Health Plan v.                 
          Commissioner, T.C. Memo. 1991-649.                                          
               In Geisinger II, the United States Court of Appeals for the            
          Third Circuit reversed and remanded our decision in Geisinger I.            
          Geisinger Health Plan v. Commissioner, 985 F.2d at 1218-1219.               
          Although the Court of Appeals agreed with the Court that an HMO             
          seeking tax-exempt status must provide a community benefit, see             
          id., the Court of Appeals concluded that Geisinger HMO did not              
          provide a primary benefit to the community but, rather, provided            
          benefits solely to its members.  The Court of Appeals, looking at           
          the totality of the circumstances, stated:                                  
               GHP standing alone does not merit tax-exempt status                    
               under section 501(c)(3).  GHP cannot say that it                       
               provides any health care services itself.  Nor does it                 
               ensure that people who are not GHP subscribers have                    
               access to health care or information about health care.                
               According to the record, it neither conducts research                  
               nor offers educational programs, much less educational                 
               programs open to the public.  It benefits no one but                   
               its subscribers. [Id. at 1219.]                                        
          Further, the Court of Appeals attached little significance to               






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