Health care costs have risen as result of the Tax Reform Act of 1986. Prior to this law, not for profit health insurance companies such as Blue Cross Blue Shield Association were tax exempt under 501(c)(4) as social welfare plans. The Tax Reform Act of 1986 revoked that exemption and all not for profit companies became for profit. These not for profit companies provided low cost basic health insurance which kept a check on overall costs in the health care industry for almost 100 years prior to this tax code change.
How can congress justify its decision that not for profit health insurance does not provide a social welfare need under IRS rules, but Political Action Committees that donate money to them do fill a social welfare need?