What Is Indigent Care and Who Qualifies for It?

Indigent care is medical treatment provided free or at a reduced cost to patients who cannot afford to pay, and the term is used interchangeably in practice with “charity care” and “hospital financial assistance.” The IRS defines it as free or discounted health services given to people who meet a hospital’s criteria for financial assistance and are unable to pay for all or part of the services they receive. Who qualifies depends almost entirely on which hospital you walk into, because eligibility rules vary dramatically from one facility to the next.

How Indigent Care Differs From Other Uncompensated Care

People sometimes assume that any unpaid hospital bill counts as charity care, but the distinction matters. Charity care refers to services a hospital provides knowing it will not seek full payment, because the patient qualified for financial help under the hospital’s own policy. Bad debt, by contrast, is what accumulates when a hospital bills a patient, tries to collect, and eventually writes off the balance as unlikely to be recovered. The two categories together are sometimes lumped under the umbrella term “uncompensated care,” but they represent fundamentally different situations for patients. With charity care, no collection effort is pursued. With bad debt, the hospital has already attempted to collect and may have sent the bill to a collections agency before giving up.¹

This distinction has real consequences. A patient who qualifies for charity care but never applies may end up classified as bad debt instead, meaning their credit can take a hit and their wages can potentially be garnished. The path a bill takes through the system depends on whether anyone identifies the patient as eligible for financial help before collection activity begins.

The Legal Backbone

Two major pieces of federal law shape how indigent care works in the United States. The first is the Emergency Medical Treatment and Labor Act (EMTALA), enacted in 1986 to stop hospitals from turning away patients who showed up at emergency departments with urgent medical conditions, typically because they lacked insurance. Before EMTALA, so-called “patient dumping” was common: hospitals would transfer or refuse to treat uninsured people in crisis.² EMTALA requires any hospital that accepts Medicare (which is virtually all of them) to screen and stabilize anyone who arrives at the emergency department, regardless of ability to pay. It does not, however, require hospitals to provide ongoing or non-emergency care for free.

The second piece is Section 501(r) of the Internal Revenue Code, which applies specifically to nonprofit hospitals. To maintain their tax-exempt status, nonprofit hospitals must establish a written financial assistance policy, publicize it to the community, and make reasonable efforts to determine whether a patient qualifies for help before pursuing aggressive collection actions like lawsuits or wage garnishment. For-profit hospitals face no equivalent federal requirement, though some states impose their own rules.

Who Qualifies and How Widely the Rules Vary

There is no single national standard for who qualifies for indigent care. Each hospital sets its own income thresholds, and the range is enormous. Among nonprofit hospitals that offer fully free care, the income cutoffs range from as low as 41 percent of the federal poverty level to as high as 600 percent.³ To put that in perspective, the federal poverty level for a single person in 2024 is roughly $15,000 a year. A hospital at the low end might only cover patients earning around $6,000 annually, while a hospital at the generous end could cover a single person making $90,000.

Most hospitals also offer a second tier of discounted (but not fully free) care for patients whose income falls above the free-care cutoff but below a higher threshold. The criteria for discounted care vary just as widely. Some hospitals consider assets and savings in addition to income. Others look only at household income relative to the poverty guidelines. A handful use presumptive eligibility screening, where the hospital proactively checks whether a patient likely qualifies based on enrollment in other public programs, homelessness, or other indicators, without requiring the patient to fill out a lengthy application.

Nonprofit hospitals are far more likely than for-profit facilities to offer both fully free and partially discounted care. Research examining hospital financial assistance policies found that roughly 97 percent of nonprofit hospitals offered fully free care, compared with significantly lower rates at for-profit hospitals. Nonprofits were also much more likely to use presumptive eligibility screening.⁴

How Medicaid Expansion Changed the Landscape

Whether your state expanded Medicaid under the Affordable Care Act has a major effect on how much charity care hospitals in your area provide and how generous their policies tend to be. States that expanded Medicaid extended coverage to most adults earning up to 138 percent of the federal poverty level, which effectively moved many previously uninsured people onto insurance rolls. That shift reduced the number of patients who needed charity care in the first place.

In expansion states, uncompensated care costs dropped from about 4.1 percent of hospital operating costs to 3.1 percent after expansion took effect. Researchers estimated that if non-expansion states had also expanded Medicaid, their uncompensated care costs would have fallen from 5.7 percent to 4.0 percent of operating costs.⁵ The gap between expansion and non-expansion states widened considerably after the ACA, and it has persisted. Eight of the ten states with the highest average charity care costs as a share of operating expenses in 2023 had not expanded Medicaid. Texas, with a 16 percent uninsured rate, had the highest average charity care costs at 6.6 percent of operating expenses. Meanwhile, every state where charity care costs fell below 1 percent of operating expenses had expanded Medicaid.

Hospitals in both expansion and non-expansion states adopted more generous eligibility policies between 2010 and 2018, but the increase in generosity was larger for discounted care in expansion states. Interestingly, hospitals in non-expansion states that made their policies more generous actually provided more charity care in response, while hospitals in expansion states provided less overall, likely because fewer patients needed it.⁶

Some hospitals also adjusted their charity care policies in response to the COVID-19 pandemic. A study of large hospitals found that income cutoffs for free and discounted care were the criteria most frequently changed during this period, with the majority of hospitals that made changes raising those cutoffs to cover more people.⁷

Safety-Net Hospitals and How They Stay Afloat

Not all hospitals carry the same burden of indigent care. Safety-net hospitals, which serve disproportionately high shares of uninsured and Medicaid patients, shoulder a much larger portion of charity care than the average facility. To help offset those costs, the federal government provides Disproportionate Share Hospital (DSH) payments through both Medicare and Medicaid. These payments are designed to help cover the gap between what it costs to treat these patients and what (if anything) the hospital receives in payment.⁸

The DSH program has been reformed multiple times since 1991 to address how the money is distributed.⁹ The ACA included scheduled cuts to DSH payments based on the assumption that Medicaid expansion would reduce the number of uninsured patients, making the payments less necessary. For safety-net hospitals in states that did not expand Medicaid, those payment reductions created real financial pressure: they were losing federal subsidies without gaining insured patients to replace the lost revenue.

Why People Who Qualify Often Never Apply

One of the most frustrating realities of hospital financial assistance is that many people who would qualify never learn the programs exist. A study of gynecological oncology patients identified four main barriers to accessing financial assistance: lack of awareness that programs existed, assumptions that they would not qualify, fear of negative consequences from applying, and simply being too overwhelmed by their diagnosis and treatment to navigate the paperwork. Patients who eventually learned about the programs frequently said they wished they had known sooner.¹⁰

Hospitals are required under 501(r) to publicize their financial assistance policies, but “publicize” is a loose standard. Posting a notice on a website or including a line on a billing statement technically meets the requirement, but it does not mean a stressed, sick patient will notice it. Patients in the study suggested that hospitals should simplify the application process, provide one-on-one help navigating financial options, and intervene earlier rather than waiting until bills pile up. These are common-sense ideas, but adoption varies widely.

The consequences of not applying can be severe. Federal rules prohibit nonprofit hospitals from taking “extraordinary collection actions” against patients before making reasonable efforts to determine whether they qualify for financial assistance. Those extraordinary actions include filing lawsuits, garnishing wages, placing liens on property, and reporting debt to credit agencies.¹¹ In practice, though, what counts as “reasonable efforts” has been the subject of considerable debate between hospitals, debt collection agencies, and patient advocates. Research has found that some hospitals appear to sue and garnish the wages of patients who are likely low-income workers who would have qualified for charity care, raising questions about whether certain facilities are following the spirit of the law.¹²

A cross-sectional study of the 100 largest hospitals using aggressive collection tactics found that practices like lawsuits, wage garnishments, and liens against patients remain in use at some of the country’s biggest facilities.¹³ The gap between policy on paper and practice on the ground is one of the most significant problems in the charity care system.

How to Actually Get Help

If you are uninsured or underinsured and facing a hospital bill, here are the practical steps that improve your chances of getting financial assistance:

Ask before treatment when possible: If you know in advance that you are going to a hospital for a procedure, call the billing department and ask for the financial assistance application beforehand. Applying early is almost always easier than applying after the bill has already been sent to collections.
Ask after treatment too: Even if you already received care, you can still apply. Most hospitals accept financial assistance applications for a window of time after the service date, often 240 days or more.
Request the policy in writing: Nonprofit hospitals are required to provide a plain-language summary of their financial assistance policy. If you cannot find it on the hospital’s website, call and request it.
Gather income documentation: Most hospitals will ask for pay stubs, tax returns, or proof of enrollment in programs like SNAP or Medicaid. If you are enrolled in a means-tested public program, that alone may be enough to demonstrate eligibility at some hospitals that use presumptive screening.
Ask about presumptive eligibility: Some hospitals will automatically screen patients for charity care eligibility based on other indicators. If you are homeless, enrolled in certain public benefit programs, or meet other criteria, the hospital may be able to approve you without a full application.
Negotiate even if you do not qualify for free care: Hospitals frequently offer payment plans or reduced lump-sum settlements for patients who do not meet charity care thresholds but still cannot afford the full bill. The posted price is rarely the final price.

Where Emergency Departments Fit In

Emergency departments are often the de facto point of entry for people who lack insurance or a regular doctor, but they are an expensive and inefficient way to deliver routine care. Research on emergency department use by insurance status found that uninsured visits were the most likely to be for non-emergent reasons, while Medicaid enrollees had the highest per-person rate of non-emergent emergency visits.¹⁴ This pattern exists not because uninsured patients want to use the emergency department for minor problems, but because they often have nowhere else to go, especially for evening and weekend care.

Urgent care centers have helped absorb some of this demand. A study found that having an open urgent care center in a given area reduced total emergency department visits by about 17 percent, driven mostly by fewer visits for less-serious conditions. The effect was especially pronounced for uninsured and Medicaid patients, whose emergency visits dropped by about 21 percent and 29 percent, respectively.¹⁵ For hospitals that bear high charity care costs, anything that diverts non-emergent visits to lower-cost settings can meaningfully reduce the financial strain.

Does Charity Care Cost Get Passed to Other Patients?

A common claim is that hospitals recoup the cost of charity care by charging insured patients more, a practice known as cost shifting. The logic sounds straightforward: if a hospital loses money treating uninsured patients, it makes up the difference by inflating prices for everyone else. In practice, the evidence for large-scale cost shifting is weaker than the rhetoric suggests. A review of the available research concluded that while some cost shifting may occur in response to changes in public payment policy, it is just one of many possible effects and that claims of inevitable, large-scale cost shifting should be viewed with skepticism.¹⁶

Hospital pricing is influenced by a tangle of factors including market power, negotiating leverage with insurers, labor costs, and capital investments. Charity care is part of the picture, but it is far from the only driver of high prices. The narrative that uninsured patients are the reason your insurance premiums keep rising oversimplifies a much messier reality.

For-Profit Versus Nonprofit Obligations

The distinction between for-profit and nonprofit hospitals matters a great deal for indigent care. Nonprofit hospitals receive tax exemptions at the federal, state, and sometimes local level, and in exchange, they are expected to provide community benefits, including charity care. The 501(r) requirements, the financial assistance policy mandates, the restrictions on aggressive collection tactics: all of these apply only to tax-exempt nonprofit hospitals.

For-profit hospitals have no federal obligation to maintain a charity care program at all. Some do offer financial assistance voluntarily, but the policies tend to be less generous and less transparent. Government-owned hospitals, such as county or municipal facilities, often serve as the safety net of last resort in their communities and typically provide significant amounts of charity care funded through local tax revenue and federal subsidies.

If you are trying to figure out whether you qualify for help, knowing your hospital’s tax status is a useful first step. Nonprofit hospitals are required to make their financial assistance policies publicly available. For-profit hospitals may or may not have a written policy, and you may need to ask more directly. Community health centers funded by the federal government are another option; they use a sliding-fee scale based on income and are specifically designed to serve people who might otherwise fall through the cracks.