Hospital Financial Assistance: How to Qualify for Charity Care
Nonprofit hospitals are required by Section 501(r) of the Internal Revenue Code to maintain a written financial assistance policy (FAP), make it public, and limit what they charge eligible patients. Many people who qualify never apply because they do not know it exists. You can request the policy and application in writing — even after you receive the bill.
What is charity care?
Charity care (also called financial assistance) is a program that reduces or eliminates hospital bills for patients who cannot afford them. For nonprofit hospitals it is not optional goodwill — it is a federal requirement tied to their tax-exempt status.
Why do so few people use it?
Overwhelmingly, because nobody tells them. In research published by the nonprofit Dollar For (2024), 52% of patients said the hospital never told them financial assistance existed, and among likely-eligible patients who never applied, 65% did not know the programs were there at all.
Dollar For estimates — using hospitals' own Form 990 filings plus a record-matching study in Maryland — that roughly $14 billion is billed to patients each year for care that should have been written off as financial assistance. That is an advocacy organization's estimate rather than a government statistic, and it is worth treating as an order of magnitude rather than a precise figure. But the direction is not seriously contested: a great many people pay bills they were entitled to have reduced or erased, simply because no one mentioned the option.
What Section 501(r) requires
Under Section 501(r) of the Internal Revenue Code, a nonprofit hospital must meet four distinct sets of obligations: conduct a community health needs assessment; maintain a written Financial Assistance Policy (FAP) and an emergency care policy, and widely publicize them; limit the amounts charged to FAP-eligible patients to no more than the amounts generally billed to insured patients; and refrain from "extraordinary collection actions" before determining whether you qualify for assistance.
Two details give this real teeth. The IRS assesses compliance facility by facility, not company-wide — so a hospital cannot point to a sister site's program. And failure at one or more facilities may result in revocation of the organization's tax-exempt status. When you cite 501(r) in a letter, you are citing an obligation with genuine consequences attached.
Who qualifies?
Eligibility is set by each hospital's policy and is usually based on household income relative to the federal poverty level. Many hospitals offer free care below one threshold and discounted care on a sliding scale above it. You often qualify at higher incomes than you would expect, especially for large bills.
How to apply
Request the hospital's financial assistance policy and application in writing, and ask that your account be placed on hold — no collections, credit reporting, late fees, or interest — while your application is reviewed. If the hospital is nonprofit, cite Section 501(r) in your request. Apply even if the bill has already arrived; assistance is frequently available after the fact.
Frequently asked questions
Do all hospitals have to offer financial assistance?
Nonprofit hospitals must, under Section 501(r) of the Internal Revenue Code. For-profit and public hospitals may offer assistance too, but are not bound by the same federal requirement.
Can I apply for charity care after I get the bill?
Yes. Financial assistance is frequently available after a bill is issued. Request the policy and application in writing and ask for a hold on the account while it is reviewed.
What income qualifies for hospital charity care?
It varies by hospital policy, usually based on household income relative to the federal poverty level. Many hospitals offer sliding-scale discounts well above the free-care threshold.