healthcare-and-medical

Hospital Charity Care and Financial Assistance Programs

Difficulty Easy Risk None Applies To All (nonprofit hospitals) Potential Savings $1,000 - $100,000+ Last Verified 2026-02-10

Hospital Charity Care and Financial Assistance Programs

What Is It?

Nonprofit hospitals — which make up roughly 60% of all hospitals in the United States — are required by federal law to offer financial assistance programs (commonly called “charity care”) to patients who cannot afford their bills. Despite this legal requirement, hospitals rarely advertise these programs. Many patients pay full price, go to collections, or even declare bankruptcy without ever learning they qualified for a discount of 50-100% off their bill.

How It Works

  1. Determine if the hospital is a nonprofit. Most large hospital systems are 501(c)(3) tax-exempt organizations. You can check by searching the IRS Tax Exempt Organization database or simply asking the hospital’s billing department.
  2. Request the Financial Assistance Policy (FAP). Under IRS rules, every 501(c)(3) hospital must have a written FAP and make it widely available. Ask for it, or look for it on the hospital’s website (they are required to post it).
  3. Apply. The application typically requires proof of income (pay stubs, tax returns) and sometimes documentation of assets. Income thresholds vary by hospital, but many cover patients earning up to 200-400% of the Federal Poverty Level. For a family of four in 2024, 400% FPL is approximately $124,800.
  4. Receive a discount or full write-off. Depending on your income, you may receive a complete write-off of the bill or a sliding-scale discount. Some hospitals also offer interest-free payment plans.

What Most People Don’t Know

  • You can apply after receiving the bill. You don’t need to apply before treatment. Most hospitals accept applications for at least 240 days after the first billing statement.
  • It applies to insured patients too. If you have insurance but still have a large balance due (high deductible, copays, out-of-network charges), you may still qualify for charity care on the remaining balance.
  • Hospitals cannot charge charity-care-eligible patients more than the “amounts generally billed” (AGB) to insured patients. This means even if you don’t qualify for a full write-off, the hospital cannot charge you the inflated “chargemaster” rate.
  • The hospital may have already sent your bill to collections. You can still apply, and if approved, the hospital is generally required to reverse the collections action.

Who Benefits Most?

Uninsured patients, underinsured patients with high deductibles, patients who experienced an unexpected medical emergency, and anyone with income below 400% of the Federal Poverty Level. Even middle-income families with large medical bills should check eligibility.

  • IRC § 501(r) — Added by the Affordable Care Act (ACA), this section requires 501(c)(3) hospitals to establish financial assistance policies, limit charges to FAP-eligible individuals, and make reasonable efforts to determine FAP eligibility before pursuing collections.
  • 26 CFR § 1.501(r)-4 — Treasury regulations detailing the financial assistance policy requirements.
  • 26 CFR § 1.501(r)-5 — Regulations on limiting charges to FAP-eligible patients (the AGB requirement).
  • 26 CFR § 1.501(r)-6 — Regulations on billing and collections, including the prohibition on extraordinary collection actions before making reasonable efforts to determine FAP eligibility.

Frequently Asked Questions

How do I find out if my hospital is a nonprofit required to offer charity care?

Search the IRS Tax Exempt Organization Search tool (apps.irs.gov/app/eos/) for the hospital’s name, or simply ask the billing department directly. You can also look for the hospital’s Financial Assistance Policy (FAP) on their website — all 501(c)(3) hospitals are required to post it publicly. If the hospital has a FAP, it is a nonprofit subject to the ACA charity care requirements.

I have insurance but still owe thousands after my deductible and copays — can I still apply for charity care?

Yes. Charity care is not limited to uninsured patients. If you have insurance but owe a significant balance after coverage, you may still qualify for financial assistance on the remaining amount. Many hospital programs cover patients with incomes up to 400% of the Federal Poverty Level regardless of insurance status.

My bill has already been sent to a collections agency — is it too late to apply?

No. You typically have 240 days from the date of the first billing statement to apply for financial assistance. If you are approved after the bill went to collections, the hospital is generally required to reverse the collections action and recall the debt. Apply as soon as possible and notify the collections agency in writing that you have a pending charity care application.

The hospital told me I don’t qualify — what can I do?

Request a written explanation of the denial, including the income threshold they applied and the Federal Poverty Level percentage. If you believe you were evaluated incorrectly, appeal in writing with updated income documentation. You can also contact your state’s Attorney General or insurance commissioner, as many states have their own charity care laws with minimum eligibility requirements that may be more generous than the hospital’s policy.

Can the hospital charge me more than what it charges insured patients if I don’t qualify for full charity care?

No. Under IRS rules (26 CFR § 1.501(r)-5), nonprofit hospitals cannot charge patients who are eligible for financial assistance more than the “amounts generally billed” (AGB) — the rates the hospital accepts from Medicare and private insurers. Even if you don’t qualify for a full write-off, you are protected from being charged the inflated “chargemaster” rate.

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