Jordan Ellis
While there is no federal law requiring hospitals to provide free care, many hospitals in the United States offer charity care, which is free or discounted health services for eligible patients who are unable to pay for their treatment. Charity care is supported by funding from federal, state, and local governments, as well as donors, and is an important source of relief for uninsured and underinsured patients. Hospitals have varying eligibility criteria for charity care, and patients typically need to apply for it after receiving a bill.
| Characteristics | Values |
|---|---|
| Hospitals required to provide free care | Only nonprofit hospitals are required by federal law to have a written financial assistance policy in place and to “widely publicize” it. |
| Hospitals that provide free care | Hospitals may provide free care depending on their eligibility criteria. |
| Charity care | Hospitals offer charity care, which is free or discounted health services provided to persons who meet the organization’s eligibility criteria for financial assistance and are unable to pay for services. |
| Charity care eligibility | Eligibility for charity care varies by hospital and state. Hospitals may consider income, assets, residency, insurance status, and the size of the bill. |
| State regulations | Some states require hospitals to provide financial assistance to people with incomes under or above specific thresholds. |
| Physician bills | Charity care typically applies only to hospital bills and not to physician bills unless the physicians operate in the hospitals that offer charity care. |
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Charity care
The eligibility criteria for charity care vary across hospitals, and each hospital establishes its own guidelines. However, hospitals typically consider factors such as the patient's income, household size, insurance status, state of residence, and the size of the bill. In some states, specific regulations extend minimum standards for charity care to for-profit, nonprofit, and government hospitals. For example, Nevada mandates free care for uninsured patients with very low incomes, while Maryland requires all acute and chronic care hospitals to provide free care regardless of insurance status.
The application process for charity care also differs between hospitals. Patients usually need to apply for charity care after receiving a bill, and they must submit their applications through fax, email, or mail. Along with the application, patients are often required to provide proof of income, such as tax returns or bank statements. It is important to note that approval for charity care by the hospital does not automatically result in bill forgiveness; patients may need to submit separate applications to individual doctors or billers.
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Eligibility criteria
While there is no federal law requiring for-profit and other hospitals to offer free or discounted care, many do. This is called charity care. Charity care is not a pot of money that hospitals give out; instead, it is a hospital's way of showing that it provides a benefit to the local community. Hospitals bear the direct costs of providing charity care, but support from donors and federal, state, and local governments may cover some or all of these expenses.
Some states require hospitals to provide notice of the availability of charity care to patients both verbally and in writing, and screen patients for charity care eligibility. Hospitals may require certain types of documentation, including tax returns and proof of income, assets, residency, or identity. However, hospitals cannot consider a patient's ownership of their primary residence or its value when assessing charity care eligibility. Some states prohibit hospitals from considering certain types of assets in making an eligibility determination.
To apply for charity care, patients must first get approved by the hospital, then give copies of the approval letter to the doctors and other providers. Patients must fill out an application, then fax, email, or mail it to the hospital. They almost always have to provide copies of documents proving their income, such as tax returns, pay stubs, or bank statements.
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State-specific laws
While there is no federal law requiring hospitals to offer charity care, many do. This is often referred to as "financial assistance" and is defined by the Internal Revenue Service (IRS) as "free or discounted health services provided to persons who meet the organization's eligibility criteria for financial assistance and are unable to pay for all or a portion of the services."
- 11 states (California, Colorado, Connecticut, Illinois, Maryland, Maine, New Jersey, Nevada, New York, Rhode Island, and Washington) extend minimum standards to for-profit, nonprofit, and government hospitals.
- 3 states (Louisiana, Oregon, and Texas) have laws that apply to narrower groups of hospitals, specifically nonprofit or government hospitals.
- 9 states (Georgia, Kansas, Kentucky, Missouri, New Mexico, Ohio, Oklahoma, Pennsylvania, and Tennessee) have laws that apply to hospitals that receive certain types of government funding to offset the cost of care for low-income patients.
- 4 states (Delaware, the District of Columbia, North Carolina, and Virginia) have laws that apply to hospitals seeking approval to expand or build new healthcare facilities.
These state regulations vary in terms of eligibility criteria and the level of assistance provided. For example:
- Nevada requires hospitals to provide free care to uninsured patients with very low incomes.
- Maryland requires all acute and chronic care hospitals to provide free care to both insured and uninsured patients.
- Texas has a law that allows for the exchange of health care information between the Texas Department of Criminal Justice and health care personnel at the University of Texas Medical Branch at Galveston or the Texas Tech University Health Sciences Center without requiring the authorization of the defendant or inmate.
- During a declared disaster involving infectious disease, a hospital in Texas may not prohibit in-person visitation with a patient unless federal law or a federal agency requires them to do so.
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Medical debt
Although there is no federal law requiring hospitals to offer free care, many hospitals do provide charity care. Charity care is not a pot of money that hospitals give out; instead, it is a way for hospitals to benefit their local communities by writing off patients' bills. Hospitals that offer charity care must have a policy outlining who qualifies and how to apply, which they must post on their website, on signs in the hospital, and on bills. Nonprofit hospitals must consider applications for all bills less than 240 days old.
Despite over 90% of the US population having some form of health insurance, medical debt is a persistent problem. A recent analysis found that 15% of households owed medical debt in 2021, with nearly one in 12 adults owing medical debt. This amounts to at least $220 billion in medical debt across the US. People with complex health needs that require ongoing care, such as those living with cancer, are more likely to experience medical debt. Additionally, adults living with disabilities are twice as likely to report owing medical debt compared to those without disabilities. Lower-income individuals are also more likely to have medical debt, with about one in 10 adults with incomes below 400% of the federal poverty level reporting medical debt. Black Americans are more likely to report medical debt than White or Asian Americans, and women are more likely to report medical debt than men.
The financial impact of medical debt can be substantial and long-lasting, with many adults reporting that they cut spending on essential items, spend their savings, borrow money, or take on additional debt to pay for medical bills. Policymakers have recognized the burden of medical debt and are exploring options to strengthen the regulation of hospital charity care programs. The Consumer Financial Protection Bureau (CFPB) is also working to stop unfair medical debt collection practices and coercive credit reporting practices that add to the strain on American families.
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Nonprofit hospitals
Charity care, also known as financial assistance, is defined by the Internal Revenue Service (IRS) as "free or discounted health services provided to persons who meet the organization's eligibility criteria for financial assistance and are unable to pay for all or a portion of the services." Hospitals have the flexibility to establish their eligibility criteria, which often include income thresholds, asset limits, residency requirements, or a combination of these factors. Some hospitals may also consider factors such as insurance status, state or county of residence, and the size of the bill.
While charity care is not a mandatory offering, it is an important source of relief for uninsured and underinsured patients. Many Americans continue to struggle with the cost of healthcare, and hospital charity care programs provide a safety net for those who might otherwise delay or forgo necessary medical treatment due to financial constraints.
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Frequently asked questions
There is no federal law requiring for-profit and other hospitals to offer free care. However, federal law requires nonprofit hospitals to have a written financial assistance policy in place and to make it publicly available. State laws vary, with some requiring hospitals to provide free care for people with incomes below certain thresholds.
Charity care is a program offered by some hospitals that provides free or discounted health services to patients who are unable to pay for their medical bills. It is considered a benefit to the local community and is funded by donors and federal, state, and local governments.
Eligibility criteria for charity care vary among hospitals and states. In general, hospitals consider a patient's income, assets, residency, insurance status, and the size of the bill when determining eligibility. Some hospitals also have residency requirements and restrictions for insured patients.
Each hospital has its own application and process for applying for charity care. Patients typically need to fill out an application and provide documentation proving their income, such as tax returns, pay stubs, or bank statements. Some hospitals may also require additional documentation, such as proof of residency or identity.
