Charity care can limit medical bill costs relative to your total income
Sliding scale discounts use Federal Poverty Level to demonstrate a patient’s inability to pay based on limited income, whereas “catastrophic out-of-pocket caps” allows an individual to access charity care by demonsrating an inability to pay because a person’s medical bills will consume a significant portion of their annual income. This is where the medical expense table in my bookThe Medical Bill Survival Guide comes in handy. You need to have a running total of everything you owe on your medical bills and what new expenses you expect to incur in the next 12 months. Again, if you talk to the right person, he or she will consider charity care discounts whether you have insurance or not. For example:
Let’s say you make $100,000 per year and your annual adjusted gross income is $73,000. You have health insurance; however, you have a high deductible health plan with a $5,000 deductible and 40% co-insurance. You have a heart attack and are admitted to the hospital through the ER. You have two stents put in your heart immediately and return several months later to have a quadruple by-pass surgery. The two hospital admissions, cardiac catheterization, major surgery, and all the co-pays on the drugs you are now taking have racked up a total patient responsibility this year of $19,000. So, when you talk to the biller, you say, “My medical bills are going to be 26% of my adjusted gross income this year and this will cause significant hardship. I have copies of all my bills and my most recent tax return, am I eligible for finance aid?”
Many hospitals and large physicians groups have charity care policies that will prevent medical expenses from ever exceeding 25% of the patient/family’s annual income in a single year. It is generally deemed unreasonable for a family or individual to pay more than 25% of their annual adjusted gross income on medical bills. Charity care really acts as a safety net to prevent a family or individual from being excessively burdened. Charity care is a mandated policy at virtually all not-for-profit hospitals in the United States.
The burden of proof however is the patient’s responsibility. You have to keep good records of all your medical bills, EOBs, cancelled, checks, and credit card statements to prove that you spent over 25% of your income on medical care. The forum called MEDICAL BILL “PREP” GUIDE has many tools for tracking your bills in this manner.