Many Hospitals Offer Financial Assistance. Here’s What You Need to Know
If you’re facing medical bills you can’t pay from a nonprofit hospital, you may have an option for relief.
As part of the Affordable Care Act (ACA), nonprofit hospitals are required to create and implement a written financial assistance policy. Depending on the hospital’s policy, you may be able to have some — or all — of your medical debt forgiven.
The rationale behind the provision is simple: that hospitals that want the tax benefits of being a nonprofit should work to make healthcare more affordable for those who need it.
Here’s what you need to know about receiving financial assistance from nonprofit hospitals.
Nonprofit Hospitals and Financial Assistance
If your hospital is a nonprofit with a financial assistance policy, you may be eligible for partial or total forgiveness of your medical bills.
If you qualify, the amount that’s eligible for forgiveness will vary based on your income, the area median income (AMI) or federal poverty line and your hospital program’s specific eligibility requirements.
The IRS regulation allows for coverage of both the uninsured and underinsured, and income requirements for partial or even full forgiveness are often higher than one might expect. That means you may qualify under your hospital’s financial assistance plan even if you consider yourself middle-class and have health insurance, so make sure to ask.
No minimum eligibility standards for receiving financial assistance have been set by the ACA or federal law. However, many states have passed laws establishing these minimum forgiveness levels, as outlined by the NCLC.
- Read more about the minimum income standards set by several states
This means that nonprofit hospitals must give you at least a set amount of forgiveness if your income is a certain percentage of the federal poverty line. Your hospital system is allowed to be more generous than these state minimums.
Regardless of income level, you should ask about your hospital’s policy and request to be screened for eligibility. You should be able to find information about the hospital’s financial assistance plan readily available in the emergency room and admittance areas (assuming your nonprofit hospital is in compliance with IRS regulations).
How to Apply for Hospital Financial Assistance
The hospital staff should offer you an application along with eligibility criteria at either intake or discharge, and you should see basic information about the program on your billing statements.
If you don’t see this information readily available, speak to someone in your hospital’s billing department to get more information.
You will likely be required to provide proof of income, via documents such as W-2s or a Schedule C. You should also be prepared to provide documentation of your medical bills, as some programs will consider your cumulative expenses when calculating your eligibility.
Even if you’re unsure if you’ll qualify, put the effort into filling out the application. Medical bills have a tendency to be crushingly large, and even partial forgiveness can be a huge financial relief.
How to Determine Whether Your Hospital Is Nonprofit
Because the ACA rule only applies to nonprofit hospitals, you’ll need to find out if your hospital is one of them. Search online using the IRS’s Tax Exempt Organization Search tool to see if your hospital is in their database.
If you don’t get a match on your first search, you may have to try with a different name. it’s possible that your hospital uses a different name in its dealings with the IRS than the one you know.
If you don’t find the answer you need through the IRS’s search tool, your next step is to call your hospital’s billing department to ask.
Which Treatments Are Eligible for Financial Assistance?
The ACA requires nonprofit hospitals to offer FAPs that cover “emergency or other medically necessary care.” The definition of medical necessity can be different for each FAP.
National Consumer Law Center (NCLC) attorney Jenifer Bosco says hospitals define medical necessity using sources like state law, federal laws governing Medicare and Medicaid, and medical guidelines developed by companies like pharmaceutical giant McKesson.
To qualify for the FAP, you must have received care at the hospital or a substantially related entity, but what counts as a “substantially related entity” varies. For example, if your hospital system owns an urgent care center, any care you received there may not be covered by the hospital system’s FAP. However, if the building is one of many that falls under the nonprofit’s state hospital license, then your care would qualify.
The best way to determine whether your care was provided at an eligible facility is to ask your hospital’s FAP administrator.
Minimum Income Requirements By State
California
| Household Income as Percentage of FPL | Mandatory Forgiveness |
|---|---|
| 0%-350% | Partial to full |
| 350%+ | Partial to full (only if you are uninsured) |
Connecticut
Connecticut’s state minimums apply only to those who are uninsured and don’t qualify for Medicaid, Medicare or other insurance.
| Household Income as Percentage of FPL | Mandatory Forgiveness |
|---|---|
| Up to 250% | Partial |
| 250%+ | No explicit mandatory forgiveness under state law |
Illinois
Patients in Illinois must pay $300 before qualifying for forgiveness, unless the hospital system decides to be more generous. There are two different sets of rules. The first applies to rural or critical access hospitals:
| Household Income as Percentage of FPL | Mandatory Forgiveness |
|---|---|
| 0%-125% | Full |
| 126%+ | Partial |
The second set of rules applies to all other hospitals:
| Household Income as Percentage of FPL | Mandatory Forgiveness |
|---|---|
| 0%-200% | Full |
| 201%-600% | Partial |
Assets, in addition to income, are counted towards eligibility when you’re applying for partial assistance.
Louisiana
Usually, Louisiana’s minimum eligibility requirements only apply to the uninsured. However, if you have insurance and your healthcare costs over the past 12 months have accounted for more than 20% of your household income, you may qualify, too.
| Household Income as Percentage of FPL | Mandatory Forgiveness |
|---|---|
| 0%-200% | Partial |
| 201%+ | No explicit mandatory requirement under state law |
Maine
| Household Income as Percentage of FPL | Mandatory Forgiveness |
|---|---|
| 0%-150% | Full |
| 150%+ | No explicit mandatory forgiveness under law |
Maryland
| Household Income as Percentage of FPL | Mandatory Forgiveness |
|---|---|
| 0%-200% | Full |
| 201%-500% | Partial |
Nevada
Nevada’s state law requires hospitals with more than 100 beds to provide free care to individuals with an income of under $438/mo. For each additional person in the household, the income eligibility goes up by $150/mo.
New Jersey
| Household Income as Percentage of FPL | Mandatory Forgiveness |
|---|---|
| 0%-200% | Full |
| 201%-300% | Partial |
New York
| Household Income as Percentage of FPL | Mandatory Forgiveness |
|---|---|
| 0%-100% | Full |
| 101%-300% | Partial |
Oregon
| Household Income as Percentage of FPL | Mandatory Forgiveness |
|---|---|
| 0%-200% | Full |
| 201%-400% | Partial |
Rhode Island
| Household Income as Percentage of FPL | Mandatory Forgiveness |
|---|---|
| 0%-200% | Full |
| 201%-300% | Partial |
Texas
| Household Income as Percentage of FPL | Mandatory Forgiveness |
|---|---|
| 21%-200% | Full |
| 201%+ | No explicit mandatory forgiveness under state law |
Washington (State)
Washington’s minimum eligibility requirements only apply to uninsured patients. That does not mean your hospital system will not extend its FAP to you if you carry an insurance policy; it just means that state law does not require them to.
| Household Income as Percentage of FPL | Mandatory Forgiveness |
|---|---|
| 0%-100% | Full |
| 101%-200% | Between 25% and 75% |
What If My State’s Not on the List?
If you don’t see your state on this list, don’t fret! Your nonprofit hospital is still required to provide an FAP thanks to the ACA. There just aren’t state laws dictating the income levels the FAP must cover. In unlisted states, your hospital’s policy can be as generous or nearly as miserly as the hospital sees fit.
Brynne Conroy is a contributor to The Penny Hoarder.
