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Petitioner and Care ceased offering their respective Senior
Care plans effective December 31, 1998. Care terminated its
Senior Care plan in part due to the financial losses that it
incurred under the program.
C. Enrollment
As of September 30, 1997, petitioner had 26,424 enrollees,
including 26,355 enrollees in its SelectMed plan and 69 enrollees
in its Senior Care plan.
D. Lack of Free/Low Cost Services
Petitioner did not maintain a program designed to encourage
or assist low income persons, medically high-risk persons,
persons located in medically under-served areas, or elderly
persons to enroll in its health plans. Petitioner did not
subsidize premiums for persons who were unable to afford its
premiums, and petitioner did not retain existing enrollees who
failed to pay their premiums. Petitioner did not conduct any
medical, health care, or scientific research.
III. Petitioner’s Application for Exemption
In 1991, petitioner filed an application for recognition as
an organization described in section 501(c)(3) that is exempt
from taxation pursuant to section 501(a). Petitioner’s
application stated that it intended to operate for the charitable
purpose of promoting health for the benefit of the community.
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