CT hospitals give millions of dollars in free care each year

Connecticut is home to some of the highest health care costs in the country and many residents here are saddled with medical debt. 

But, experts say, many patients are unaware they might qualify for financial aid programs that can ease the burden of hospital bills.

The programs pay tens of millions of dollars in Connecticut residents’ medical bills each year. Rules vary by hospital, with as many as one-third of residents eligible based on their income.

“There just hasn’t been enough attention on this piece of the puzzle,” said Nick McLaughlin, CEO of Breez Health, a Michigan-based startup that helps hospitals craft and market such policies.

Under the right circumstances, people treated at Connecticut hospitals can receive a discount — or even see bills wiped away entirely — through financial aid, or so-called “charity care,” policies offered at each facility.

Such programs have existed at many hospitals for years. When the Affordable Care Act passed in 2010, the law required nonprofit hospitals nationwide to supply charity care to their patients.

Today, every hospital in Connecticut offers discounts to at least some of their patients, according to a Hearst Connecticut Media review of policies. 

Together, Connecticut hospitals gave out $149.8 million in charity care in 2019, according to data from federal reports compiled by the National Academy for State Health Policy.

On average, Connecticut hospitals spend around 1 percent of their expenses on charity care.  

Some say hospitals should do even more to increase that number and lower barriers to access the assistance.

“If there’s a tool that we can use to make healthcare more affordable for the people that need it most, then we should use it,” said McLaughlin.

Thousands need help with hospital bills

Roughly one in ten Connecticut residents have medical debt in collections, according to the Urban Institute, a nonpartisan think tank. Among communities of color, the rate is even higher at 17 percent. 

Neil Crane, a bankruptcy attorney in practice in Connecticut for 37 years, said many of his clients face struggle with medical debt. Most often, medical bills build up over time as credit card debt, Crane said, putting people in “this downward spiral from continuing, smaller medical bills.”

Crane said many people in financial straits are unlikely to fill out a financial aid application. He said his clients often have one or more jobs, children and other burdens that make filling out a lengthy application a low priority. 

“It would have to be really easy to do,” he said.

Hospitals’ financial aid policies generally allow patients to apply for help for amounts that have accumulated over time from repeated doctor’s office or hospital visits.

Estimates from the U.S. Census Bureau show between 13 percent and 35 percent of the state’s population would qualify for charity care based on their income, depending on which hospital they go to.

All CT hospitals provide charity care. But the rules differ.

Each hospital in Connecticut has some kind of policy offering free or discounted medical care, according to reports submitted to the state Office of Health Strategy. 

However, hospitals differ on who they are willing to give free or discounted care to. 

For instance, someone in a three-member family might qualify for free care at the for-profit Prospect Medical Holdings hospitals — Manchester Memorial Hospital, Rockville General Hospital and Waterbury Hospital — if they make $34,545 per year. But at nonprofit Nuvance Health, which includes the Norwalk, Danbury and Sharon hospitals, a member of that same family may qualify for free care if they made $92,120 a year or less. 

Some states have been bullish on the issue. For example, taking effect in 2021, Oregon regulators required nonprofit hospitals to give people at least a discount if their income was less than four times the federal poverty level.

How do I know if I qualify? 

While every hospital’s financial assistance policy is unique, there are common threads. 

All hospitals decide primarily based on a person’s income.

In Connecticut, if you make less than double the federal poverty level, you can likely access free hospital care. That translates to about $27,000 for a single person, or $55,500 for a family of four. 

Some hospitals have more generous policies, and discounts are also available for people who make more. 

For example, Yale New Haven Health, one of Connecticut’s largest health systems, has one of the more generous policies in the state, according to a review by Hearst Connecticut Media. In its annual filing with the Internal Revenue Service, it reported it gave out financial assistance to 77,000 people in 2020.

Certain hospitals also take steps to make it even easier for patients in tight financial situations. For instance, anyone who qualifies for food stamps, is homeless or already eligible for subsidized housing can automatically receive a full discount under Hartford Healthcare’s rules. 

Patients generally can’t request help for care that wasn’t necessary, like elective cosmetic surgery. Many hospitals also state they need to see proof that the patient can’t access Medicaid, the government-administered insurance program for people with low incomes. 

McLaughlin, who said he previously worked in hospital billing and collections, said it is to hospitals’ advantage to offer discounts to people who can’t pay their bills. The collections process is expensive, he said, and often the hospital is pursuing money the patient doesn’t have.

Mary Brannigan Lowe, who oversees billing programs at Nuvance Health, said she believes Connecticut’s hospitals share plenty of information about the aid that is available. She said she has noticed increases in the number of people making use of charity care.

“Over the years, more patients have become aware that there’s assistance out there for them,” she said. 

Brannigan Lowe noted a successful financial aid application does require documentation, especially to prove income and family size. But there is no deadline to apply for forgiveness of bills from the health system.

But, Ted Doolittle, the state’s healthcare advocate, said hospitals generally need to do more to make charity care accessible to patients.

“The people who need this are sick, so it’s not their finest hour,” he said. “They’re not going to be able to do battle with the bureaucracy to find out whether there’s charity. They need to be told.”