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The cost of medical care puts a squeeze on many Americans. In a September 2020 Gallup poll, half of Americans said they fear a major health crisis would bankrupt them. And as of December, also according to Gallup, 26% of Americans reported they or a family member had delayed medical treatment in the prior 12 months because it cost too much. If you're putting off essential medical treatment because you can't afford it, or are struggling to pay a hospital bill, you should know about charity care. Charity care in health care provides free or discounted medical care to people who can't afford to pay. Here's a closer look at how charity care works and who may qualify.
How Do Hospital Charity Programs Work?
Charity care is free or discounted medically necessary health care that many hospitals offer to people who cannot afford to pay for treatment otherwise. It includes both inpatient and emergency room services. Even if you have health insurance, you may qualify for charity care to pay the amount of your hospital bill that your insurance doesn't cover.
Under the Affordable Care Act (ACA), nonprofit hospitals must offer charity care to maintain their nonprofit status with the Internal Revenue Service (IRS). However, the IRS allows hospitals to set their own rules regarding who qualifies for charity care; some hospitals are more generous than others.
Some states have passed laws requiring health care providers to offer charity care. In addition, many for-profit hospitals offer needs-based programs that provide a similar type of assistance.
Whether you are eligible for charity care can vary depending on where you live and the hospital where you are treated. Charity care policies may also have exclusions; for instance, if a doctor who treats you is not a hospital employee, his or her portion of the bill may not be eligible for charitable care.
How Do I Get Charity Care?
Nonprofit hospitals are required by law to provide information about their charity care programs in a variety of ways, such as posting information in waiting areas, providing information when you check in or leave the hospital, or including the information when they send your bill. However, each hospital handles the process in its own way. Some hospitals assess your eligibility for charitable care when you check in and start you on this path immediately. Others simply include information about charitable care information in your discharge papers or bill. If you don't receive information about charity care from the hospital, visit its website or contact its billing department to get information about any charity care policies and a copy of the appropriate application forms.
Charitable care is intended to be used after payments from other sources, such as health insurance or Medicaid, have been applied.
"Some providers offer assistance only to patients without insurance, while others may provide partial assistance to patients with insurance," says Matt Baltzer, product management director for Experian Health. "In many cases, they'll first see if patients can be enrolled in state Medicaid programs. If that is not an option, they'll help direct patients to a charity application."
To determine if you're eligible for charity care, the hospital will ask for information and documentation to verify your income. This generally includes W-2 statements or pay stubs, previous income tax returns, unemployment benefits statements, Social Security benefit statements, or documentation from your state's department of social services.
Providers generally have dedicated teams of financial counselors or financial navigators that assist patients through the process, Baltzer explains.
The charity care approval process typically takes two to six weeks, depending on the provider's backlog of applications and how long it takes you to provide all the necessary documentation. You'll receive a letter from the provider stating whether your application was approved or denied. If it was denied, the letter must also explain how to appeal this decision and how long you have to do so.
You can apply for charity care as soon as you visit the hospital or after you are discharged. However, be sure to apply as soon as you can, because once you're released, the clock starts ticking on your bill. Medical debt is handled a bit differently than other debt. Unpaid medical bills are not reported to the credit bureaus until the provider sends them to collections, which typically happens at 90 days past due (although some providers wait longer).
Even after they're informed of the debt, the three main consumer credit bureaus—Experian, TransUnion and Equifax—give you a 180-day grace period to pay the bill before the collection account appears in your credit report. If the bill remains unpaid at that point, however, it can negatively affect your credit score. Ultimately, the hospital might even sue you to get paid.
To avoid delaying your financial assistance and better position yourself to pay your bill before it goes to collections, Baltzer advises that patients "review the [provider's] policy carefully and provide all answers and necessary documentation the first time. Incomplete applications may be rejected or returned until more information can be provided."
That said, it's never too late to apply for charity care. You can apply after your bill has gone to collections or even after you've been served with a lawsuit. If you think you qualify for charity care, you should apply for it even if you've already paid all or part of your hospital bill. If the hospital approves your application, you'll be refunded any money that charity care covers.
"Providers are eager to give help to those who need it, and we continue to see them looking for ways to optimize the financial assistance process," Baltzer says. Completing the application process can often present a hurdle, however. Traditional application processes require undergoing an in-depth screening and providing paper documentation to substantiate your financial situation. "This requires staff time, scheduled appointments, and exchange of documents by fax, mail or hand delivery," Baltzer explains.
To help providers manage this process more efficiently, Experian has developed technology to automate it whenever possible, including mobile apps patients can use to complete their applications at home.
Other Organizations That Can Help Pay for Medical Bills
If you don't qualify for charity care or Medicaid, or if you are still struggling to afford copays or medication that these programs don't cover, you have other options. Hospital staff may not have time to help you uncover these resources, however, so you'll need to do some sleuthing on your own.
"Many options are available for copay assistance," Baltzer says. "But patients need to do a bit of homework."
Programs may be available in your state for your specific diseases or health conditions. You can also search online for local or private organizations that offer financial assistance for people in need.
You'll find private and nonprofit programs that offer assistance with everything from prescription drugs and treatment costs to insurance copays and premiums. Here are a few organizations to get you started.
- CancerCare provides co-pay assistance for patients with certain cancer diagnoses.
- Good Days helps patients pay for life-extending treatments, diagnostic tests, insurance premiums, copays and more.
- HealthWell Foundation assists with copays, premiums, medication and other out-of-pocket costs.
- Leukemia & Lymphoma Society provides financial aid for patients with those diseases.
- Medicine Assistance Tool can match you with resources and programs to reduce your out-of-pocket costs for prescription medication.
- NeedyMeds helps people find sources of assistance to pay for medication and medical care.
- The PAN Foundation provides financial assistance with out-of-pocket medical expenses including co-pays and medication.
If you're struggling to afford expensive medication, look for pharmaceutical company patient assistance programs (PAPs). Drug manufacturers may provide a PAP for uninsured, underinsured or low-income patients, or offer discount coupons you can use regardless of income.
Keep Your Credit Healthy
Receiving a big medical bill that you can't afford is scary, but there are resources available to help. Find out what financial assistance the hospital can offer and research alternatives such as state assistance and private organizations. Talk to the hospital's billing department about other options for paying your medical bill, such as working out a payment plan.
Paying a medical bill can take a long time, especially if insurance or charitable sources take a while to pay. Keep an eye on your account and stay in touch with the hospital to make sure everything is progressing smoothly. Regularly check your credit report and score during the process to ensure they aren't suffering.
Whatever you do, don't ignore a medical bill and hope it goes away. Taking action ASAP can help protect your credit score.