Hospital Financial Assistance and Charity Care

Nonprofit hospitals in the United States provided $28 billion in charity care in 2022, but billions more go unclaimed every year because patients don’t know they can apply. If you earn under $62,400 as an individual or $128,800 as a family of four, you may qualify for free or deeply discounted hospital care—even after you’ve already received the bill. Financial assistance is a legal right at most hospitals, not a handout. Here’s how to claim it.

1. What is hospital financial assistance (charity care)?

Hospital financial assistance—also called charity care or indigent care—is a program that reduces or eliminates hospital bills for patients who cannot afford to pay. These are all names for the same thing: a discount or write-off applied to your hospital bill based on your income.

Under IRS Section 501(r), every nonprofit hospital in the United States is legally required to have a written Financial Assistance Policy (FAP). About 60% of all US hospitals are nonprofit, which means the majority of hospitals must offer this program. It is not optional—it is a condition of their tax-exempt status.

Here’s what financial assistance typically covers:

• Inpatient stays — surgeries, overnight hospitalizations, ICU care
• Outpatient procedures — same-day surgeries, diagnostic tests, infusions
• Emergency room visits — regardless of whether you were admitted
• Physician fees — some hospitals extend assistance to doctor charges billed through the hospital (though not always)

Financial assistance can be applied retroactively. That means you can apply even if you’ve already received the bill, already made partial payments, or already been contacted by the hospital’s billing department. Most hospitals accept applications for up to 240 days after the first billing statement.

2. Who qualifies?

Eligibility is based primarily on your household income relative to the Federal Poverty Level (FPL). The FPL is a number set by the government each year that defines the income threshold for various assistance programs. Each hospital sets its own cutoffs, but most follow a similar pattern:

Important: These are typical thresholds. Some hospitals are more generous. Major health systems like Kaiser Permanente, Providence, and CommonSpirit offer assistance up to 400% FPL or higher. A few hospitals extend partial discounts up to 500% FPL. Always check your specific hospital’s policy.

Beyond income, hospitals may also consider:

• Asset tests — Some hospitals look at savings and assets, but many do not. If your hospital does count assets, primary residences and retirement accounts are usually excluded.
• Special circumstances — Recent job loss, divorce, a new major illness, existing medical debt, or other financial hardships can strengthen your application even if your income is slightly above the threshold.
• Medical debt burden — If your existing medical bills exceed a certain percentage of your income (often 10–25%), some hospitals will qualify you even at higher income levels.
• Insurance status — Being uninsured is not required. Insured patients can apply for assistance on their out-of-pocket costs (deductibles, coinsurance, copays).

Use our calculator to see how your charges compare to what Medicare pays—this helps you understand what a “fair” price looks like before you apply:

3. How to find out if your hospital offers financial assistance

Start by checking whether your hospital is nonprofit. About 60% of US hospitals are—including most of the largest health systems in the country. You can look up your hospital in our hospital directory to see its nonprofit status and pricing data.

Every nonprofit hospital is required to:

• Post its Financial Assistance Policy (FAP) on its website
• Provide a plain-language summary of the policy
• Make paper copies available upon request
• Inform patients about the policy before collection actions

Here’s what to look for in the policy:

How to find the policy:

1. Hospital website: Search for “financial assistance,” “charity care,” or “patient financial services.” The policy is often under the “Billing” or “Patients & Visitors” section.
2. Call the billing department: Ask for the financial assistance application directly. They are required to provide it.
3. BillKarma hospital directory: Search our directory to find your hospital’s nonprofit status and links to their financial assistance information.

4. How to apply — step by step

Step 1: Find the financial assistance application

Check the hospital’s website under “billing” or “patient financial services.” You can also call the billing department at the number on your statement and say: “I’d like to apply for financial assistance. Can you send me the application?” They are required to provide it. Many hospitals also have patient financial counselors who can walk you through the process in person.

Step 2: Gather your documentation

Most applications require:

• Proof of income — Two to three recent pay stubs, or your most recent tax return (Form 1040). If you are unemployed, a letter from your last employer or unemployment benefits statement.
• Tax return — Most recent federal tax return (Form 1040). Some hospitals accept just pages 1 and 2.
• Bank statements — One to three months of statements for checking and savings accounts. Not all hospitals require this.
• Proof of hardship (if applicable) — Layoff notice, divorce decree, other medical bills, disability determination letter, or any documentation of a financial change.
• Household information — Number of people in your household, as the FPL thresholds change with family size.

Step 3: Complete the application

Fill out every field. Incomplete applications are the most common reason for delays and denials. If a question doesn’t apply, write “N/A” rather than leaving it blank. Include a brief cover letter explaining your situation in one or two sentences: “I am requesting financial assistance for my hospital stay on [date]. My annual household income is $[amount] for a family of [number].”

Step 4: Submit and follow up

Submit the application by the method the hospital specifies—usually mail, fax, email, or in person at the patient financial services office. Keep copies of everything you submit. Call to confirm receipt within 5 business days. Ask for a reference number and the name of the person handling your case. Ask the hospital to place your account on hold during the review so it does not go to collections.

Step 5: Appeal if denied

If your application is denied:

1. Request the denial reason in writing. Common reasons include: incomplete application, income above their threshold, or missing documents.
2. Fix the issue and resubmit. If documents were missing, add them. If income is borderline, include documentation of special circumstances (other medical debt, recent job loss, ongoing treatment costs).
3. Escalate if needed. Contact the hospital’s patient advocate. If that fails, file a complaint with your state attorney general’s consumer protection division—they investigate hospitals that fail to comply with financial assistance obligations.

5. Annotated example: what a successful application looks like

Here’s a real-world example of how financial assistance works from start to finish. A patient had an emergency appendectomy (surgical removal of the appendix) and received this bill:

Patient’s situation:

• Single individual, no dependents
• Annual income: $38,000
• Income as percentage of FPL: 245% (between 200% and 300%)
• Uninsured

Hospital’s financial assistance policy:

• Below 200% FPL: 100% free care
• 200–300% FPL: 65% discount
• 300–400% FPL: 40% discount

Result:

• Original bill: $32,000
• Financial assistance discount (65%): −$20,800
• Adjusted bill: $11,200
• Payment plan: $467/month for 24 months, zero interest

The patient saved $20,800 by filling out a single application. The entire process took 22 days from submission to approval.

Want to see how your bill compares to Medicare rates before you apply? Upload your bill to BillKarma for an instant audit.

6. What hospitals don’t want you to know

Hospitals are required to have financial assistance programs, but they are not always proactive about telling patients. Here are the facts most billing departments won’t volunteer:

You can apply AFTER receiving the bill

Many patients assume financial assistance is something you arrange before treatment. That’s not true. Under IRS rules, hospitals must accept applications for at least 240 days after the first billing statement. Some hospitals accept them even later. If you received a bill weeks or months ago, you can still apply.

You can apply even if you have insurance

Financial assistance is not just for the uninsured. If your insurance left you with a large deductible, coinsurance, or copay, you can apply for assistance on the patient responsibility portion. This is especially valuable for patients with high-deductible health plans who face $3,000–$8,000 in out-of-pocket costs.

Some hospitals must limit charges to Medicare rates

Under the Affordable Care Act (ACA) and IRS Section 501(r), nonprofit hospitals cannot charge patients who qualify for financial assistance more than the amounts generally billed (AGB) to insured patients. In practice, this often means qualifying patients are charged at or near Medicare rates—which can be 50–80% less than the chargemaster price. This applies even if you only qualify for a partial discount.

Hospitals that fail to comply can lose tax-exempt status

A nonprofit hospital’s tax exemption is worth millions of dollars per year. If the IRS finds that a hospital is not complying with 501(r) requirements—including properly administering its financial assistance program—the hospital risks losing that exemption. This gives you leverage. If a hospital is not following its own policy, a complaint to the IRS or state attorney general carries real weight.

You can appeal a denial—and escalate

A denial is not the final answer. You can appeal with additional documentation, escalate to the patient advocate, or file a complaint with your state attorney general’s consumer protection division. Hospitals take state AG inquiries seriously because they can trigger broader investigations into billing practices.

7. Real patient results

Think you might qualify? Start by uploading your bill to BillKarma for a free audit, then check your hospital’s financial assistance policy in our hospital directory.

Frequently asked questions

Sources

• IRS Section 501(r)(4): Financial Assistance Policy Requirements for Charitable Hospitals
• CMS Medicare Physician Fee Schedule (2026)
• KFF: Charitable Hospital Financial Assistance and Community Benefits
• ASPE/HHS Federal Poverty Level Guidelines (2026)
• CFPB: Medical Debt and Credit Reporting Changes
• California Attorney General: Hospital Fair Pricing Policies (example of state enforcement)
• Health Affairs: Hospital Charge-to-Cost Ratios and Charity Care Spending (2022)