Hospital charity care and financial assistance programs.
The federal government Affordable Care Act (ACA) requires that all non-profit hospitals provide some form of charity care or financial assistance to low-income patients, including those with no health insurance. Depending on the state, this requirement can also help moderate income households and also, eliminate any medical debt owned by patients. The Affordable Care Act, sometimes called Obamacare, provides help to all Americans, whether they use the ACA health insurance policies or not. Find more details below on charity programs from hospitals that are part of the ACA program.
The majority of hospitals in the U.S. are non-profit organizations that receive federal and state tax breaks due to that status. The ACA financial aid program requires all non-profit hospitals (as well as many for-profit ones depending on state) to offer assistance. It is a government law. In addition to these federal government guidelines, most state regulations also require that for-profit hospitals offer support as well. At the end of the day, hospital financial assistance plans, that resulted from the Affordable Care Act, may pay up to 100% of your medical costs.
Affordable Care Act hospital financial assistance programs
What most people do not know is that there are federal and state laws requiring some medical bills to be completely paid or substantially reduced by hospitals for individuals falling within specified income levels. As the sad truth is that medical debt (much of it incurred from treatment at hospitals) affects millions of Americans, with a quarter of adults owing more than $5,00 and that about half of people believe that a health crisis would bankrupt them.
Each hospital's financial assistance plan must apply to both emergency and inpatient treatment for medically necessary care. Both states and the federal government mandate this. Medically necessary health care is a very broad term. It is defined as services and supplies needed to "diagnose or treat an illness, injury, condition, disease or its symptoms and that meet accepted standards of medicine."
The terminology when it comes to the Affordable Care Act (ACA) is wide ranging. In general hospital financial assistance plans are often referred to as charity care or uncompensated health care. The plans must be designed by each hospital to provide health care for free or at a reduced cost to persons with limited income (and/or no insurance) who might otherwise be unable to pay for medical treatment.
Federal law that resulted from the ACA does not set any eligibility guidelines or income limits or restrict the amount of assistance a person may receive. These specifics are left to each state. Many states have also enacted laws that expand financial assistance obligations to for-profit hospitals.
With a few exceptions, hospitals providing charity care are usually not reimbursed by the federal government. That being said, it does not matter to you - a patient who needs to go through the process. n most states, providing charity care is considered a hospital's community obligation in return for maintaining its tax-exempt status as a nonprofit entity.
While charity care specifically applies to hospitals, free or sliding-fee medical clinics owned and operated by hospital systems are often covered as well. However, financial assistance may not cover the payment of bills by physicians and other providers who are not employed by the hospital. The ACA will not require specialists or other out of network providers to offer charity care.
The guidelines vary. Some states require persons to be uninsured to obtain charity care, while other states provide financial assistance for insured persons with the assistance paying the portion of medical bills not covered by insurance. Or there may be free government grants from ACA for bills, generous payment plans and other resources.
A few examples – income requirements and financial help provided
Income eligibility for Affordable Care Act charity care or financial help is typically based on federal poverty guidelines. In most cases, a person's financial assets are usually not considered. Eligibility for charity care is based almost exclusively on income compared to the poverty line. The more members of the household, the higher total income may still be covered by a hospital charity care plan per ACA guidelines.
The amount of assistance available differs based on the state in which a person resides. In general, persons earning below a specific amount will be eligible for free care, while those earning above that amount will at least qualify to receive significant discounts until an upper-end income level is reached. Many states may even waive any debt or balance that is due to the hospital or clinic.
For example, in Colorado, patients earning up to 250% of the federal poverty line are eligible for charity care. Recent changes in Washington law require every hospital to cover all allowable hospital costs by charity care for persons earning less than 300% of the poverty line. Discounts are given to persons earning as much as 400% of the poverty level.
Oregon was the first state to establish charity care thresholds for hospitals, and that was done even before the Affordable Care Act came into effect. Currently, persons earning up to 200% of the federal poverty line qualify for full payment of allowable medical costs at non-profit hospitals and their affiliated clinics. Discounts ranging from 25%-75% are available for persons earning up to 400% of the poverty level.
In Illinois, only persons earning up to 200% of the poverty line can get their bills fully paid off, but patients earning up to 600% of the poverty line can still receive substantial discounts. New Jersey's charity care program applies to all acute care hospitals and provides free medical care to people earning up to 200% of the poverty level and discounted care for persons earning up to 300%. The law applies to both uninsured and insured patients.
When and how to apply for ACA Charity Care
One goal of the federal ACA law (aka Obamacare) is to ensure that patients' bills are not sent to collection agencies until after eligibility for financial assistance is determined, whether it is free care, a payment plan or discounts. While the ACA law requires that charity care policies be widely publicized, a low-income family should always ask. Some medical providers may not be as communicative as well. However the Affordable Care Act does state that eligible patients must be notified by hospital staff of available financial assistance programs at either intake or discharge.
Hospitals, whether private ones or for-profit providers, must display financial aid policies in public spaces and include that information on their websites. It should also be on invoices and the billing office, and medical billing advocates are generally aware of this too. The information must include clear eligibility requirements and application resources. Billing statements must also include contact information for the hospital's financial aid program.
Although the ACA provision to provide charity care only applies to non-profit hospitals, state laws often extend the requirement to all hospitals. This can be in-patient or out patient facilities. Many for-profit hospitals have voluntarily established charity care policies as well.
In addition to reviewing websites, you can learn whether your favored hospital has a charity care policy by contacting your state hospital association or insurance division. You might also contact a free or low-cost medical billing advocate, financial assistance counselor or social worker at the hospital. All of these may offer help. Hiring an effective advocate who understands the complicated, bureaucratic medical system may save you thousands of dollars. Find what is offered from a medical billing advocate.
You may be screened to determine eligibility for charity care upon entering the hospital. Or call in advance of your surgery or treatment and ask that options you have. Otherwise, if you believe you may qualify, complete an application as soon after leaving the hospital as possible. If you did not receive an application form while hospitalized, check the hospital's website or contact the hospital billing department for the appropriate form.
Be prepared to prove your income with paystubs, income tax returns, proof of unemployment, Social Security award letters, or other documents. Medical billing advocates and/or social workers can help with applying. The ACA requires patients to prove their need. Insurance coverage, including out-of-pocket costs you're required to pay, should also be disclosed.
Charity care applications may take from two to six weeks to review by the hospital billing department or administrative staff. Applicants are typically notified by letter if they have been approved. If the application is denied, the letter must provide the reasons, explain how to appeal, and specify how much time an applicant has to appeal.
The process can be long and/or complicated. There are other resources too. You might also apply to organizations such as the PAN Foundation (Patient Access Network), which can direct patients to many assistance programs. Or people who need help from a hospital for cancer treatment can try CancerCare. These organizations provide financial assistance to help cover out-of-pocket costs for persons dealing with cancer and life-threatening or chronic diseases.
Medical debts waived by Affordable Care Act plans
Charity care may also apply to past due bills as well as debts for which assistance was not originally sought. Although hospitals generally send bills to collections after 90-120 days, the Internal Revenue Service (IRS) requires hospitals to give patients 240 days from the initial billing date to apply for financial assistance. Even if a bill has been sent to collection, you can still apply to the hospital for assistance and refer to the ACA charity care program. Notifying a collection agency that you have an application pending may stop annoying calls and letters.
For bills more than 240 days past due, asking the hospital for assistance may still prove successful. It never hurts to ask for help. Hospitals have been known to forgive or write off bills that are several years old. Or they offer generous payment plans, reduce interest costs or fees, or reduce the principal owned too.
For-profit hospitals often are forced to write off a bad debt against taxes they may owe. The medical provider accrues bad debt when patients who are expected to pay their bills are either unwilling or unable to pay them. For-profit hospitals must exhaust both internal and external efforts to collect the debt before they can write it off on a tax return.
Providing charity care is how nonprofit hospitals essentially "write off" bad debt. Since nonprofits do not pay federal taxes, the hospital does not reduce any tax burden. For qualified patients, the hospital simply eliminates the debt by providing free or discounted services in the form of charity care.
If you don't fall within the specified income limits of your hospital's policy or if you have some insurance but the policy states that it only applies to uninsured persons, don't give up. As many states and medical providers also have income tests. Complete an application and attach a letter of financial hardship explaining your specific circumstances and making a strong case about why you should receive financial help.
If a hospital does not provide financial assistance from the ACA - Affordable Care Act and leaves you with a large balance to pay, some options exist that may help to reduce your debt. If your bill is in collections, you may be able to negotiate a settlement with an agency on your own to reduce (or eliminate) any hospital or medical debt. If you don't want to take on that challenge, nonprofit credit counselors and professional debt settlement firms can often negotiate substantial reductions on your behalf. Read more about how to negotiate medical bills.
The ACA financial assistance and charity programs help low income families
If you don't have health insurance or are struggling to get access to affordable, or free medical care, on limited income, the Affordable Care Act (often referred to Obamacare) can assist. The ACA program requires financial help to cover the cost of health care treatment for yourself or family members, and that assistance may be available for the asking.
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