piles of one-hundred-dollar bills

How do you go about getting “charity care” or financial aid for healthcare from the hospital?

There are many ways to reduce costs — a challenge to the bill itself, an appeal to the insurance company, bargaining for lowered cash or prompt-payment prices.

This post, though, is specifically about the type of hospital financial aid broadly referred to as “charity care,” which is discounted or free care based on income.

You may not think of yourself as a charity case, but this is a term used by hospitals, regulators and others to describe policies for giving free or discounted care to people who meet certain criteria, including but not only because of limited income for the size of their household. Separate from hospitals, discounted care may be given by doctors, non-hospital clinics and others, but this post is specifically about hospital charity care.

Many people would be surprised to discover that they qualify for this kind of discounted or free care. But — much like tax credits for health insurance via the Affordable Care Act — charity care is based on income, and is available to many people who do not think of themselves as qualifying for such aid. The amount you’ll pay depends on the hospital’s policy and on your income, household size and other factors.

A.C.A. requirement for nonprofits

The Affordable Care Act requires nonprofit hospitals wanting to preserve nonprofit status to establish financial assistance or charity care policies for consumers who are unable to pay medical expenses. Frequently eligibility is calculated on a combination of income and household size. Some state laws have established eligibility thresholds for charity care as a percentage of federal poverty levels, which are based on both income and household size.

While nonprofit hospitals are required to have policies, it is clear from anecdotal reports that many people can’t find those policies, and as a result incur medical debt that they might be able to avoid.

“Even though many low-income consumers are eligible to receive financial assistance, a large percentage of consumers with low incomes have medical collections on their credit reports,” the Consumer Finance Protection Bureau wrote in a brief about charity care and medical debt. “We lack the data to identify debts incurred from nonprofit hospitals, so many of these debts may come from for-profit and other providers. Nonprofit hospitals, however, make up approximately 49 percent of all hospitals . These hospitals must provide financial assistance and other community benefits in exchange for the significant tax benefits they receive, yet our results suggest that many consumers do not receive the financial assistance they need.”

Why does it matter? A recent Kaiser Family Foundation brief said: “About four in ten adults (41%) in the United States — and about six in ten (57%) of those with household incomes below $40,000 — have some level of medical debt, owing an estimated $195 billion or more in total.  Many adults who report medical debt cite costs associated with emergency care (50%) and hospitalizations (35%) as sources of unpaid bills.”

It can be hard to find the right information. “Nearly half (45 percent) of nonprofit hospital organizations are routinely sending medical bills to patients whose incomes are low enough to qualify for charity care, according to a Kaiser Health News analysis of reports the nonprofits submit annually to the Internal Revenue Service,”  Jordan Rau wrote for The Washington Post.

How to find information

How do you find out if you qualify? One way to start is to search the name of the hospital and the words “financial aid” or “charity care.” That should take you to the hospital’s eligibility page. You can also call them to find out.

The income limits vary from place to place. Nonprofit hospitals in Texas have different policies from nonprofit hospitals in New York.

Beyond that, the hospitals themselves will have different rules and procedures, so your best bet is to go straight to the hospital.

When you go to the hospital website, you’ll see the rules. Keep a record of what you found, and then call the hospital to make sure you qualify. You’ll have to go through an application process, which is likely to require tax returns or pay stubs as proof. Note that income requirements based on tax returns will require a previous year’s tax documents; current income can be reflected on current pay stubs. Requirements will be specific to your situation and to the hospital and state.

Also, and this is really important: Be careful. If you search for “financial aid” on the website, you may not get to the right place.

Some hospital and other healthcare sites will send you to a consumer credit application — like CareCredit, for example — if you search on financial aid. CareCredit is not “charity care,” but rather basic consumer credit, like a credit card, only for medical care. There can be strict rules on repayment, and consumer debt of this sort is treated differently on your credit reports than is strictly medical debt to a hospital. CareCredit is one of the best-known consumer credit offerings for medical expenses, but it’s not the only one.

State regulations vary

Criteria and practices vary from state to state, and from hospital to hospital.

An overarching guide from the Consumer Finance Protection Bureau goes into general rules.

Another guide from the National Consumer Law Center also goes into general rules, with a state-by-state breakdown.

In Washington State, the state hospital association has this web page explaining criteria. “Providing health care to those that cannot afford to pay is part of the mission of Washington’s hospitals. State law requires hospitals to provide free and discounted inpatient and outpatient care. Each hospital is responsible for maintaining its own charity care program,” the page says.

Individual policies are listed by hospital on this page on a Washington State government website.

To help Washingtonians navigate, WashingtonLawHelp.org has this page, maintained by the Northwest Justice Law Project. “Federal and state laws require hospitals to provide you certain types of medical care for free or at a reduced cost if you cannot afford to pay for the medical treatment. Charity Care covers ‘medically necessary’ treatment, including inpatient hospital stays and emergency room visits,” the page says, offering information about eligibility guidelines, sample letters and a link to the Law Project for legal help.

At Long Island Community Hospital, in New York City’s suburbs, the charity care policy applies between 200 % and 425% of the federal poverty level, depending on family size and income. Cosmetic surgery is not covered.

You can find federal poverty income guidelines here.

In some states, such as New Jersey and Massachusetts, the income threshold for free care eligibility is 200% of the federal poverty level. In New Jersey, according to state law, financial assistance “is available to low-income residents with no health insurance, or with health insurance that pays only part of a medical bill, or for patients ineligible for private or government-sponsored coverage,” according to the C.F.P.B.; for details, see the New Jersey hospital care payment assistance fact sheet.

At the Hackensack Meridian system, the financial aid page explains that they will need to see checking, savings, and debit card account statements, and documentation for any CD’s, IRA’s, 401K’s, stocks or bonds. Pay stubs or, if you are self-employed, a profit and loss statement signed by an accountant is required, with a copy of the tax return for the prior year, as well as proof of unearned income, including but not limited to retirement pension, child support, alimony, VA benefits, Social Security award letter, SSI award letters,
unemployment or state disability records or other financial contributions.

Also, some states have Medicaid rules that might come into play. In New York, for example, the law allows you to apply for Medicaid and if you qualify, your medical bills may be covered retroactively for 90 days — but you have to apply as soon as possible. This is not true in, say, Texas or Florida. In Maine, care is free for anyone with an income of up to 150 % of the federal poverty level.

In some states, you have to be uninsured to qualify. In others, under certain circumstances, you do not. (See New Jersey, above.)

In South Carolina, for example, you qualify if your income does not exceed 200% of the federal poverty level, you are a resident of South Carolina, a U.S. citizen or licensed permanent resident, with a top limit of $35,000 equity on your home, $6,000 equity limit on other real and personal property, and up to $500 in cash. Then you will be eligible for services that Medicaid covers.

Texas guidelines

Financial aid policies differ from place to place and may be more charitable than you think.

Is your hospital a non-profit? Texas requires non-profit hospitals to provide financial assistance to patients with income between 21% and 200% of the federal poverty level. The National Consumer Law Center has more details in its recent review of hospital financial assistance policies across the country.

Also, resources for help vary from place to place. Several Texas organizations offer services and advice to people with medical and other bills in collection. They include:

These programs vary greatly from state to state. Here’s a great explainer from U.S. News and World Report.

Here’s a blog post about a woman who was diagnosed with breast cancer while she was uninsured, and essentially sought financial help before getting treatment.

Here’s a blog post about a woman who had a terrible run of bad fortune while uninsured, and how she dealt with the various financial aid options.

Doctors and others may be excluded

Quite often, a hospital has a financial aid policy but that policy may not apply to doctors, radiologists and other specialists who work there.

This is a much-lamented feature of our healthcare system: When you go to a hospital, you might expect that the people working there are part of the hospital workforce, but that’s not always true.

For example, at Sutter Health in California, the financial aid page says, “Unless otherwise specified, the Sutter Health Financial Assistance Policy for Hospitals does not apply to physicians or certain other medical providers who care for you while you are in the hospital. This includes emergency room doctors, anesthesiologists, radiologists, hospitalists, pathologists, and other providers. These doctors will bill you separately from the hospital bill. This policy does not create an obligation for the hospital to pay for the services of these physicians or other medical providers.”

“Some medical professionals who care for you in the hospital are covered by the Financial Assistance Policy for Hospitals. Those categories of providers are listed below. Nurses who do not have advance practice licenses; registered nurses, including registered nurse first assistants; licensed vocational nurse; certified nursing assistants, medical assistants and other non-licensed assistants (dental, et cetera.); physical therapists, occupational therapists (including hand therapists), speech-language therapists and therapy assistants; pharmacists; technologists or technicians – all type; laboratory scientists” and others.

What the hospitals give and what they get

Nonprofit hospitals are supposed to deliver a certain amount of “community benefit” to maintain their nonprofit status. This community benefit can include the charity care they give as well as other benefits — running a clinic in a low-income area, for example.

“Over the years, some policymakers have questioned whether nonprofit hospitals — which account for nearly three-fifths (58%) of community hospitals — provide sufficient benefit to their communities to justify their exemption from federal, state, and local taxes,” Jamie Godwin, Zachary Levinson and Scott Hulver wrote in a recent brief for the Kaiser Family Foundation.

“This issue has been the subject of renewed interest in light of reports of nonprofit hospitals taking aggressive steps to collect unpaid medical bills, including suing patients over unpaid medical debt, including patients who are likely eligible for financial assistance. Further, recent research indicates that nonprofit hospitals devote a similar or smaller share of their operating expenses to charity care in comparison to for-profit hospitals. In light of these concerns, several policy ideas have been floated to better align the level of community benefits provided by nonprofit hospitals with the value of their tax exemption.”

“The estimated value of tax exemption for nonprofit hospitals increased from about $19 billion in 2011 to about $28 billion in 2020. The rising value of tax exemption means that federal, state, and local governments have been forgoing increasing amounts of revenue over time. … This has raised questions about whether nonprofit facilities provide sufficient benefit to their communities to justify this tax benefit. Federal regulations require, among other things, that nonprofit hospitals provide some level of charity care and other community benefits as a condition of receiving tax-exempt status. However, a 2020 Government Accountability Office (GAO) report raised questions about whether the government has adequately enforced this requirement. Further, some argue that the federal definition of ‘community benefits’ is too broad — e.g., by including medical training and research that could benefit hospitals directly — though others believe that the definition is too narrow. Most states have additional community benefit requirements for nonprofit or broader groups of hospitals—such as providing charity care to patients below a specified income threshold — though there is little information about the effectiveness of these regulations or the extent to which they are enforced.”

The Kaiser report said a number of policy proposals are under consideration nationally, including “proposals to create or expand state requirements that hospitals provide charity care to patients below a specified income threshold, mandate that nonprofit hospitals provide a minimum amount of community benefits,” among others.

Some states are more assiduous than others in seeking to prove that hospitals have met their responsibilities for charity care. “For example, recently, the Washington State Attorney General filed a lawsuit alleging that 14 hospitals in the state failed to provide free or discounted medical care to low-income patients and pressured them to pay even if they were eligible for financial assistance,” the C.F.P.B. wrote.

Who actually pays?

In the case of nonprofit hospitals, their obligation to provide charity care as part of their “community benefit” obligations means that the money to cover charity care often comes out of their general budget and is used as a tax writeoff.

Beyond that, the Consumer Finance Protection Bureau writes, “There are other ways for hospitals in certain states to be reimbursed for the levels of financial assistance they provide. Several states fund financial assistance through dedicated programs. For example, in New Jersey, the Health Care Subsidy Fund allocated $319 million in 2022 to hospitals for financial assistance.

“In Massachusetts, payments from the Health Safety Net in 2019 amounted to $387 million. These states’ funds have been fully expended each year and are provided in addition to the hospitals’ financial assistance obligations.

“New York and Pennsylvania also have programs that provide financial assistance to low-income individuals for the cost of medical care,” but this assistance apparently goes to the hospitals and not to individuals.

The New York State Indigent Care Pool report for 2019 explains: “The Indigent Care Pool (ICP) is a program which provides funding to hospitals to assist in paying for the cost of care for low income individuals. The Pool currently distributes $795 million dollars annually and is part of the larger Disproportional Share Hospital (DSH) Program run by the Department of Health (Department).”

In other states, other rules apply. The National Consumer Law Center chart has details.

What you can do

  • Find out the financial aid or charity care policy of the hospital. You can Google: Hospital name and “charity care” or “financial aid” is a good place to start. See if you qualify, and apply. This sounds very straightforward, but we have learned that the hospitals tend to not be very public or clear about their applications for aid, so it might require a little bit of searching on the website. Don’t forget: You can always call the hospital and ask them for their charity care or financial aid policy. Pro tip: Call several times, because different people in the same office might be more or less helpful.
  • Keep careful records of what you applied for and when, and who you talked to and when. This will be useful if you need to make an appeal. We have also heard that these applications can take a long time.
  • If your application for financial aid is denied, ask why – or seek advice for an appeal. 
  • Red flag: When you are looking for financial aid, some places will try to direct you to “financing,” which might be an application promising interest-free or low-interest credit, for example via CareCredit. This can be tricky. The financing application is basically an application for consumer credit, and it might have similar terms and conditions to credit card debt – hefty interest and penalties, for example.  
  • Investigate the Medicaid policies where you are. In New York, for example, you can apply for Medicaid, and if it is granted, there is a 90-day lookback period during which hospital bills may be covered by Medicaid. This varies a lot by state and by situation.
  • After the fact, you may also be able to get your bill classified as charity care — though it’s often easier to do it in advance if you can. DollarFor, a nonprofit based in Vancouver, Wash., says it will argue your bill for you after the fact if you qualify, or will help you do it yourself. They don’t list a phone number on their site; they want you to apply online. Go to their website and fill in the form. They give detailed instructions, including letting you download a copy of the financial assistance summary (with income criteria) and application for you to fill out. They say that whether they ask for a resolution or you ask for a resolution, the hospital will call you. This is only for hospital care, and will not affect ambulance, outpatient behavioral health, doctor, dentist or lab bills. (I requested an interview, but they didn’t respond, so I filled out their form as if I were a patient to see what the process looks like.) The instructions say to download the application and add all the required documents, including proof of income like tax return or pay stubs, and submit the application to the hospital. DollarFor says it will send tips and reminders and help you work through the process. Info: support@dollarfor.org.
  • Your city or state may have a legal aid service or other resource for helping people with bills. See above for Washington State and Texas and other state resources, for example; you can search in your own state or city for local help.
  • The ​​National Consumer Law Center collects consumer debt advice and expert tips, including articles about medical debt.
  • The National Consumer Law Center has more details in its recent review of hospital financial assistance
  • The Consumer Financial Protection Bureau also has consumer tools on debt protection.
  • There may be other options for financial aid based on diagnosis. We have heard of condition-specific groups for aid for, say, cancer care or abortions or diabetes or muscular dystrophy. This type of financial aid is outside the scope of this post; you may be able to find help by searching online or consulting with other patients.
  • The Consumer Finance Protection Bureau works to fight unfair medical debt collection, but they should not be your first stop for charity care. The bureau’s site does list general debt collection resources. The C.F.P.B. generally suggests that people with medical billing complaints go to the Centers for Medicare and Medicaid Services, No Surprises Help Desk at (800) 985-3059 from 8 a.m. to 8 p.m. ET, seven days a week, or submit a complaint online to the Centers for Medicare & Medicaid Services . The C.F.P.B. site also says: “If a debt collector contacts a client about a surprise medical bill, or if a client sees surprise medical charges listed as negative items on their credit report, you and the client can take action. For issues with a consumer financial product or service, you or the client can submit a complaint to the C.F.P.B. online or by calling (855) 411-2372.”

Jeanne Pinder  is the founder and CEO of ClearHealthCosts. She worked at The New York Times for almost 25 years as a reporter, editor and human resources executive, then volunteered for a buyout and founded...