Charity Care

Charity care is medical care a hospital provides free or at a reduced cost to patients who cannot afford to pay. Nonprofit hospitals, which are most of the hospitals in the country, are required by federal tax law to have a written financial assistance policy and to make it available in order to keep their tax exemption. Many states, including Texas, add their own requirements. The care is not a favor; it is a condition of the hospital's tax status.

The eligibility thresholds are more generous than most families assume. A typical nonprofit hospital policy provides 100 percent free care for households below 200 percent of the federal poverty level, which for a family of four in 2024 is about $62,400 in income, and sliding discounts up to 300 or 400 percent of poverty, which reaches $125,000 for that same family. Some large systems go higher. Yet studies keep finding that most patients who qualify never apply, because nobody told them and the application is buried. Under federal rules a nonprofit hospital cannot send you to collections, report you to a credit bureau or sue you until it has made reasonable efforts to find out whether you qualify, and if you are later found eligible, charges already billed must be reduced to no more than the amount generally billed to insured patients.

The takeaway: if you receive a large hospital bill and your household income is under about four times the poverty level, ask for the financial assistance application in writing before you pay anything. Hospitals must give it to you, and the discount can be the entire bill.