Blog#207- 7/7/24
FREE CARE IF…
By Richard Davis
When I first heard about a Vermont bill that became law on July 1, 2024 I thought the state had entered into a new era of health care affordability. The news report outlined some of the circumstances under which people could receive free hospital care. When I read the bill it turned out there is mostly nothing new, but it’s worth talking about it because some people need to know about hospital policies regarding free care.
Because all of Vermont’s hospitals are non-profit they have some degree of requirement to provide free care to needy individuals. That used to apply to hospitals that took money under the Hill-Burton Act but I think those days have passed and free care is still part of a hospital’s budget.
Most hospitals have had free care policies but you have to ask for the forms to apply for it. The new law, Act 119, that passed in 2022 and became effective July 1, 2024 only codifies what most hospitals have already been doing.
If a person is uninsured and their income is below 100% of the federal poverty level (FPL) most hospitals would waive any bill for emergency care. The new bill provides for free care for an uninsured household with income below 250% of the federal poverty level. A family of two is at 100% of FPL with a household income of $20,440.
The thing that is troubling about this new bill is that it only applies to people who are not only uninsured but they also have to lack stable permanent housing. I know that in the past the housing provision was not a consideration when providing free care and I hope hospitals do not require that even though it is in the law.
Until passage of this law many hospitals realized that it was not worth the effort to collect money from people below certain federal poverty levels of income. They knew they would never see the money and they did not want to spend the time and money to try collection in a futile situation. Those people who knew about the free care or applied for it were relieved of a burden they knew they would never be able to get rid of.
Act 119 spells out levels of subsidy. If a person is uninsured and their household income is between 250 and 400% of FPL they are entitled to a 40% discount . There is a newer provision for insured people with a household income at or below 250% of FPL that waives all out-of-pocket costs. I don’t know if hospitals were doing that before passage of this bill.
If a patient’s household income is at or below 600% of FPL a hospital will only bill 20% of household income if their bill exceeds 20% of their household income. There is also a provision for undocumented immigrants to be given the option of submitting income documentation other than income tax returns, which is usually required for eligibility for discounted care. A facility has 30 days to notify someone of the status of their financial aid application.
Act 119 also does not allow a hospital to sell its medical debt. That does not mean that their collection department can’t hound you about unpaid bills, but it does mean that your credit rating may not be affected if you owe the hospital money. That could be an important issue for people who do not qualify for subsidies but are trying to pay their bills and are having a hard time doing it.
This bill is mostly nothing new, but it is good that the legislature decided to codify hospital practices and unify policies statewide. If you need help paying a hospital bill ask to speak to the person in charge of helping people with financial aid. The title may vary in different hospitals.
