EPISODE 4
Today’s program: MEDICAL DEBT: THIS IS THE FOURTH EDITION FOCUSING ON SOLUTIONS. HOW TO USE CHARITY PROGRAMS TO ELEMINATE MEDICAL DEBT
I’m Gary and I’m Jay and we will be hosting today’s program.
- We are not Clinical people.
- We are experienced in the Business of Healthcare with over 50 years of combined experience.
- We bring an Insiders view of how healthcare works.
- Our goal is to share our knowledge with consumers.
GP: Career in spans managing hospital and physician revenue cycle operations that include
Pt Admission, Precertification, Ins verification, billing and medical collections
JH: Chief Financial Officer for several large healthcare systems
Here we go with today’s program: IDENTIFYING MEDICAL DEBT SOLUTIONS
First, let’s recap: What is Medical Debt?
Medical debt is debt incurred by individuals due to health care costs and related expenses. Medical debt is different from other forms of debt, because it is usually unplanned, accidental, or faultless. Medical debt can have negative impacts on households, such as reducing their spending on other essential items, or preventing them from seeking needed medical care or treatment. Medical debt can also lead to bankruptcy.
Do you have a Medical Bill?
If yes, medical debt can indeed be a significant financial burden for individuals and families. When someone incurs medical expenses that are not fully covered by insurance or you do not have insurance, you may end up owing money to healthcare providers. This debt can accumulate due to various factors, such as high deductibles, copayments, out-of-network charges, or uncovered services.
WHAT ABOUT HEALTHCARE PROVIDER CHARITY PROGRAMS
According to data from the Census Bureau, 19% of American households carry medical debt. One way to reduce medical debt is through the hospital financial assistance program known as charity care or indigent care.
What are charity care programs?
Charity care programs give free or low-cost medical treatment at hospitals for people who can’t pay. This includes all emergency room care. For patients who are admitted, it also includes any inpatient care they need.
Nonprofit hospitals in the U.S. must provide charity care in order to keep their favored tax status. (About 57% of the nation’s hospitals are nonprofit.) Some for-profit hospitals provide it, too. Uninsured or under-insured people may qualify, depending on the hospital.
How do I get started?
By law, nonprofit hospitals must post their charity care policies on their websites. The information must include:
- How patients can qualify for financial help
- Whether the medical care is free or discounted
- How the hospital calculates patients’ bills
- How patients can apply for help
The hospital must state this information in plain English that’s easy to read. There’s an additional rule in areas where 5% of the people (or 1,000, whichever is less) speak another language. The hospital must publish the information in those languages, too.
If you are at the hospital needing care, you’ll want to find out the details about its programs as soon as possible. Look for signs in the waiting room or at the patient check-in desk. Ask for any documents or forms you may need.
How do charity care programs work?
Each hospital has its own care policies, eligibility rules, and application process. You might apply for charity care on the hospital website, over the phone, or with a financial assistant or social worker at the hospital.
The application will ask for information about your income, expenses, and assets. You may have to provide proof of these items with paperwork such as tax forms, paycheck stubs, and benefits information. It usually takes a few weeks to get your results.
While the application process is similar at each hospital, every program has its own review and approval process for charity care. So, it is difficult to predict whether you will be approved. Here are three factors that could make the difference for you.
- Income: Is it above or below the federal poverty line?
When you apply for charity care, most hospitals consider income, family size, and whether you have insurance coverage. Typically, they compare your income to the federal poverty guidelines based on the number of household members. Many nonprofit hospitals will “write off” (forgive) your bill if your household income is less than 100% of the federal poverty threshold.
Family size | 2023 income numbers | 2024 income numbers |
For individuals | $14,580 | $15,060 |
For a family of 2 | $19,720 | $20,440 |
For a family of 3 | $24,860 | $25,820 |
For a family of 4 | $30,000 | $31,200 |
For a family of 5 | $35,140 | $36,580 |
For a family of 6 | $40,280 | $41,960 |
For a family of 7 | $45,420 | $47,340 |
For a family of 8 | $50,560 | $52,720 |
For a family of 9+ | Add $5,140 for each extra person | Add $5,380 for each extra person |
Patients who earn more than 100% of this limit can still get some cost reductions. For example, the charity care program advertised by University of North Carolina Hospitals accepts people who earn up to 250% of the federal poverty guidelines.
Unfortunately, though, many hospitals don’t help patients get through the application process. In 2019, Kaiser Health News reported that 45% of nonprofit hospitals send medical bills to patients whose incomes would have qualified them for free or discounted care.
Steps to take for charity care or financial help with medical bills
- Ask for a copy of the policy.
Ask for a copy of the hospital’s financial assistance policy up front. By law, the policy must be provided free of charge and must tell you how to apply for help. You can ask whether the policy is available in your preferred language in addition to English.
- Fill out an application form.
Fill out the application with information about your income, including last year’s tax forms or a current pay stub, and your expenses, including your rent or mortgage payment, utilities, credit cards, and other expenses.
- Ask questions about the process.
Ask your provider how long it takes to process your application for financial assistance, how to get answers to questions about the application, and what happens with your bill in the meantime.
- Notify any debt collectors, if they are trying to collect from you
Notify any debt collectors trying to collect on the hospital bill that you’re seeking financial assistance for the bill. You can tell them to pause collections while that is pending.
- Follow up
Follow up with the service provider and its billing department about the status of your application as necessary.
Financial assistance programs at for-profit hospitals may or may not:
- Limit or remove copayments
- Give you a discount if you do not have insurance
- Reduce your overall bill based on income
- Give the same percentage discount to every qualifying patient
Location: Do your state’s hospitals have to provide charity care?
Many states have laws requiring some or all hospitals to provide free or low-cost care to patients below certain income levels. Currently, these states include:
- California
- Colorado
- Illinois
- Indiana
- Maine
- Maryland
- Massachusetts
- Montana
- New Hampshire
- New Jersey
- New Mexico
- New York
- Oklahoma
- Pennsylvania
- Rhode Island
- Texas
- Utah
- Virginia
- Washington
- West Virginia
- Wisconsin
In some states, including Maine and Washington, broad laws require all hospitals to offer charity care. In other states, charity care laws apply only to critical access, rural, public, or nonprofit hospitals. For example, New Jersey requires only acute care hospitals to offer charity care.
State social services organizations can often help you sort out your options.
Is charity care the same thing as medical debt forgiveness?
No. Both can reduce your debt burden, but there are important differences. With charity care, the hospital writes off some or all of your charges during the billing stage, before your account goes to collections. Applying for or receiving charity care will not lower your credit score.
Medical debt forgiveness happens after the account is overdue. In these cases, the bill has gone to collection. The collection agency would then settle your account for a fraction of the full balance. If your account goes to collections, don’t panic. It’s not too late to apply for charity care instead of negotiating debt forgiveness. If your charity care application is approved, you can put your money toward the overdue bill.
What other rules are there for charity care?
Even if you have private insurance or Medicare, you can still apply for discounts on your care. In fact, many hospitals require you to approach your insurer first. The hospital might even look into your Medicaid eligibility. The insurance plan, Medicare, or Medicaid would be expected to pay their share upfront. Charity care funds could then reduce the remainder of your bill.
If you receive a big hospital bill that you cannot pay, ask about charity care right away. It is important to start the application process promptly. Otherwise, the hospital may sue you — even if you qualify for financial assistance.
If you receive a collection notice for medical debt, read it carefully. In Washington state, for example, the notice must say if you were eligible for charity care. It must also state whether the hospital applied charity care to any portion of your costs. Information like this will help you negotiate a settlement. Remember that you can apply for charity care at any point in the process.
The bottom line
Charity care can help you keep your medical bills under control. Thousands of hospitals across the U.S. provide charity care programs. Some of them accept people who earn up to 400% of the federal poverty limit. To start the process, talk to your hospital’s billing department or check its website to see if you qualify.
IMPORTANT TAKE AWAYS
- By law, all nonprofit hospitals must provide charity care based on a patient’s income. Some for-profit hospitals offer it, as well.
- Many people who qualify for this care don’t know it is available to them.
You can apply for charity care at any point in the billing process — even if the hospital has sent your bill to collections
What Do I Do if I’ve Been Denied Financial Assistance?
If you don’t qualify, don’t despair. Hospital representatives say patients may be able to repay their bills on a low- or no-interest installment plan or take out a short-term loan with a partner bank.
You may also want to reapply in future years if you take on new medical bills. After all, your family circumstances and the federal poverty guidelines change from year to year, so a denial in the past may not exclude you from having an application accepted in the future
HCNC is your healthcare partner that offers healthcare consumers information to navigate the healthcare maze via our website.
The program and take away information of the program will be available on our website www.healthcareconsumernavigatorcenter.com.
REMEMBER: THIS IS OUR 5TH YOUTUBE PROGRAM IN THIS SERIES, SEVERAL MORE TO FOLLOW
Our next program topic will be: How to use the The No Surprise Act to reduce Medical Debt and How to negotiate medical debt
This concludes our program MEDICAL DEBT SOLUTIONS, and we hope the program explained telehealth care and has answered some of your questions.