Indigent Care: What to Know about Charity Care and Medical Bill Assistance
Key takeaways:
By law, all nonprofit hospitals must provide indigent care, also known as charity care. Some for-profit hospitals also offer this type of financial assistance.
Many people who qualify for indigent care don’t know that this help with medical bills 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.
Nearly one-third of working-age adults in the U.S. have dental or medical debt, according to The Commonwealth Fund Health Care Affordability Survey — conducted for the first time in 2023. Economic hardship caused by medical bills can create financial toxicity, which links medical debt to poorer health. Medical debt can damage your credit rating, too.
Many people don’t know that they qualify to reduce — and even erase or avoid — medical debt from hospital bills. One way to do so is through hospital financial assistance programs, known as indigent care or charity care.
Financial assistance is typically available for people who are:
Medically indigent, which means a person’s medical bills are a significant portion of their income and their medical debt threatens the financial health of their household.
Financially indigent, which means the person is uninsured or underinsured and has a household income that falls below a certain level.
Prescription Savings Are Just the Beginning
See what other benefits you qualify for—from cashback cards to cheaper insurance.
Indigent care for pets
Dogs, cats, and other furry and feathered family members may also qualify for indigent care. Some veterinary hospitals offer charity care for rescue animals and working dogs.
What are indigent care programs, and what do they cover?
Indigent care programs provide charity care or free or low-cost medical treatment at hospitals for people who can’t pay. This includes all emergency and medically necessary care.
There are nearly 3,000 nonprofit hospitals in the U.S., according to the American Hospital Association, which is about half of the nation’s hospitals. Nonprofit hospitals in the U.S. must provide charity care and conduct community benefit spending to keep their favored tax status. Some for-profit hospitals provide indigent care, too.
Under the Affordable Care Act and IRS rules, nonprofit hospitals must also have:
Limits on charges for people who qualify for financial assistance
Limits on billing and collections for people who qualify for financial assistance
A community health needs assessment every 3 years
How do I get started?
By law, nonprofit hospitals must post their charity care policies on their websites and in public spaces, as well as on patient intake or discharge papers. The information must include:
How people qualify for financial help
How people can apply for financial assistance
Whether the medical care is free or discounted
How the hospital calculates medical bills
The hospital must plainly state this information in English that’s easy to read. In areas where 5% of the people (or 1,000 people, whichever is less) speak another language, the hospital must publish the financial assistance policies in those languages, too.
If you are at a hospital and need care, find out the details about its indigent care programs as soon as possible. Look for signs in the waiting room or at the check-in desk. Ask for any documents or forms you may need.
How do indigent care programs work?
To understand who qualifies for indigent care and how it works, it’s important to know that each hospital has its own financial assistance policies, eligibility rules, and application process. You might apply for indigent healthcare on the hospital website, over the phone, or with a financial representative or social worker at the hospital.
The application will ask for information about your income, expenses, and assets. You may have to provide proof via tax forms, paycheck stubs, and health insurance information. It usually takes a few weeks to get a decision on your application.
Each hospital has its own review and approval standards for indigent care. Typically, the care must be emergency or medically necessary and not considered cosmetic or elective. 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 indigent care, most hospitals consider your income, family size, and whether you have health insurance. Typically, they set income limits based on the federal poverty level (FPL), which is updated every year. The FPL is the same for the contiguous 48 states and Washington, D.C., but higher in Alaska and Hawaii.
2024 Federal Poverty Level Snapshot
Household size | Income at 100% of federal poverty level |
1 | $15,060 |
2 | $20,440 |
3 | $25,820 |
4 | $31,200 |
5 | $36,580 |
People with household incomes above 100% of the federal poverty level can also qualify for financial assistance. For example, the charity care program at UNC Health, the University of North Carolina Health Care System, is available to North Carolina residents with income and assets at or below 250% of the FPL.
It’s important to ask about indigent care programs. Kaiser Health News reported that 45% of nonprofit hospitals send medical bills to people they have served whose incomes would have qualified them for programs providing free or discounted indigent care.
Hospital: Is it nonprofit or for-profit?
You can be sure that a nonprofit hospital will have a charity care program in place. As noted above, for-profit facilities aren’t required to offer this option — but many do. For example, the healthcare system that includes Methodist Hospital in San Antonio — the largest for-profit hospital in the U.S. — will provide financial assistance that covers all costs for patients whose households earn less than 200% of the federal poverty guideline. And the system will provide discounts of 40% to 90% for people from households making up to 500% of the FPL.
Financial assistance programs at for-profit hospitals may or may not:
Limit or eliminate copayments
Give you a discount if you do not have insurance
Reduce your overall bill based on income
Give the same percentage discount to everyone who qualifies for financial assistance
Location: Do your state’s hospitals have to provide charity care?
Depending on where you live, you may have further state protections if you qualify for indigent care. States that have laws requiring some or all hospitals to provide free or low-cost care to people below certain income levels include:
California
Colorado
Illinois
Indiana
Maine
Maryland
Massachusetts
Montana
New Hampshire
New Mexico
New York
Oklahoma
Pennsylvania
Rhode Island
Texas
Utah
Virginia
Washington
West Virginia
Wisconsin
Is indigent care the same thing as medical debt forgiveness?
No. Both can reduce what you owe, but there are important differences. With indigent care, the hospital gives you a discount, which lowers your bill. Applying for or receiving charity care will not lower your credit score.
Medical debt forgiveness, or debt cancellation, happens after your account is overdue, but the creditor — in this case, the hospital — no longer pursues the debt. The wiped-away debt may be reported to the IRS, and the amount could be taxed as income. Paid medical debt no longer appears on credit reports.
If your medical debt ends up in collections, you may address the balance through debt settlement, which is paying less than what you owe. Debt settlement can have a negative effect on your credit score, and the unpaid portion can be reported for tax purposes.
It’s also important to note that you now have more time to act on medical bills, such as asking for a payment plan, applying for financial assistance even after you have been charged, or paying what’s owed. Starting in 2022, consumer credit-reporting agencies Equifax, Experian, and TransUnion began waiting 1 year before including unpaid medical debt on credit reports.
Are there additional rules for indigent care?
Even if you have private insurance, Medicare, or Medicaid, you can still apply for discounts on your care. The hospital may even help you apply for government health insurance, which may pay retroactively if you would have qualified when you received care.
If you receive a hospital bill that you cannot pay, ask about indigent care or 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 hospital medical debt and you are eligible for indigent care or any hospital financial assistance program, the collection agency must return the debt to the hospital or the hospital must recall the debt. At that point, you should apply for indigent care, which you can do at any time in the process.
The bottom line
Indigent care, also known as charity care, is financial assistance that can help eligible people afford their hospital bills. These programs that discount the cost of care are required under the Affordable Care Act and IRS rules. Depending on where you live, state laws may offer further protections from medical debt. Thousands of hospitals across the U.S. have indigent care programs for people who qualify by household income and other eligibility requirements. Hospitals should have their financial assistance policies available on their websites, posted in public spaces, and summarized on intake or discharge paperwork. If you receive a bill you can’t pay, ask about indigent care. You can qualify even after you have been charged.
Why trust our experts?
References
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Axelton, K. (2023). What is charity care in health care? Experian.
Beaty, T. (2024). N.Y.’s nonprofit animal trauma center offers charity care for rescues and working animals. The Chronicle of Philanthropy.
Collins, S. R., et al. (2023). Paying for it: How health care costs and medical debt are making Americans sicker and poorer: Findings from the Commonwealth Fund 2023 Health Care Affordability Survey. The Commonwealth Fund.
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Garber, J. (2023). 5 things you need to know about hospital community benefit spending. Lown Institute.
HealthCare.gov. (2024). Federal poverty level (FPL).
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Methodist Healthcare. (n.d.). Financial assistance policy and application.
Office of the Assistant Secretary for Planning and Evaluation. (2024). Poverty guidelines.
Rau, J. (2019). Patients eligible for charity care instead get big bills. KFF Health News.
Singer, S., et al. (2022). Understanding required financial assistance in medical care. Consumer Financial Protection Bureau.
The Hilltop Institute. (n.d.). Community benefit state law profiles comparison. University of Maryland, Baltimore County.
The University of Texas Medical Branch at Galveston. (n.d.). Medical indigence: Policy term definition.
UNC Health. (n.d.). Financial assistance.
