Hospitals Look to Health Law, Cutting Charity
Hospital systems around the country have started scaling back financial assistance for lower- and middle-income people without health insurance, hoping to push them into signing up for coverage through the new online marketplaces created under the Affordable Care Act.
The trend is troubling to advocates for the uninsured, who say raising fees will inevitably cause some to skip care rather than buy insurance that they consider unaffordable. Though the number of hospitals tightening access to free or discounted care appears limited so far, many say they are considering doing so, and experts predict that stricter policies will become increasingly common.
Driving the new policies is the cost of charity care, which is partly covered by government but remains a burden for many hospitals. The new law also reduces federal aid to hospitals that treat large numbers of poor and uninsured people, creating an additional pressure on some to restrict charity care.
In St. Louis, Barnes-Jewish Hospital has started charging co-payments to uninsured patients, no matter how poor they are. The Southern New Hampshire Medical Center in Nashua no longer provides free care for most uninsured patients who are above the federal poverty line — $11,670 for an individual. And in Burlington, Vt., Fletcher Allen Health Care has reduced financial aid for uninsured patients who earn between twice and four times the poverty level.
By tightening requirements for charity care, hospital executives say, they hope to encourage eligible people to obtain low-cost insurance through the subsidized private plans now available under the law.
“Do we allow our charity care programs to kick in if people are unwilling to sign up?” said Nancy M. Schlichting, chief executive of the Henry Ford Health System in Detroit. “Our inclination is to say we will not, because it just seems that that defeats the purpose of what the Affordable Care Act has put in place.”
But advocates for the uninsured point out that many Americans avoided obtaining coverage in the inaugural enrollment period of the Affordable Care Act this year because they found the plans too expensive, even with subsidies. Many uninsured people also remain unaware of the new insurance options, And immigrants who are in the country illegally are not even eligible to apply.
“Certainly we want to encourage people who have new access to affordable coverage to take advantage of it,” said Sidney D. Watson, a professor at St. Louis University’s Center for Health Law Studies. “But I think we’re all going to have to do a lot to get that message out, and there will always be people who won’t have the option.”
Beverly Jones, 51, of St. Louis, who has lupus, is the type of person targeted by Barnes-Jewish Hospital’s new policy. Ms. Jones, who already owes Barnes-Jewish thousands of dollars for emergency room treatment and other visits, said the hospital’s new co-payments for the uninsured would “throw my budget into a tailspin” on her annual income of $13,400, which comes mostly from disability checks.
She has enrolled in a subsidized insurance policy under the Affordable Care Act. But she worries that she will have trouble paying the fees and deductibles required under her new plan, even with generous subsidies.
“There’s still a lot of stuff I can’t afford to do,” she said.
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Many hospitals appear focused on reducing aid only for patients who earn between 200 percent and 400 percent of the poverty level, or between $23,340 and $46,680 for an individual. Many of those people presumably have jobs and would qualify for subsidized coverage under the new law.
BJC HealthCare, the nonprofit system that owns Barnes-Jewish and 11 other hospitals in Missouri and Illinois, gives all uninsured patients a 25 percent discount on the billed charges, regardless of their income. But the system previously provided additional discounts to uninsured patients with incomes up to 400 percent of the federal poverty level. Now, only patients earning up to 300 percent of the poverty level, or $35,010 for an individual, are eligible.
And for the first time, everyone who gets financial assistance owes at least a small co-payment. For example, patients with incomes at or below the poverty level are now charged $100 for emergency care and $50 for an office visit.
“We didn’t want to have a policy that would encourage people not to follow the mandate” to get health insurance, said June Fowler, a spokeswoman.
In the past, Southern New Hampshire Medical Center generally provided free or discounted care for patients who were at or below 225 percent of the poverty level, or about $26,260 for an individual. But starting this year, only patients below the poverty level will receive such charity care, said Paul Trainor, the system’s vice president of finance.
Patients “who refuse to purchase federally mandated health insurance when they are eligible to do so will not be awarded charitable care,” the hospital’s revised policy states.
Fletcher Allen, Vermont’s largest health care system, changed its policy on April 1, requiring many uninsured patients to pay a percentage of their bill instead of a fixed fee of up to $1,000. Patients earning 200 percent of the poverty level or less will not be affected by the change, said Shannon Lonergan, Fletcher Allen’s director of registration and customer service. But those earning between 201 percent and 400 percent of the poverty level will now have to pay between 15 percent and 45 percent of their bill, depending on their income.
Ms. Lonergan said the new policy would affect only about a third of its financial aid recipients. At BJC HealthCare, only about 3 percent of charity care patients in 2012 earned more than 300 percent of the poverty level and thus would no longer qualify for financial assistance unless there were extenuating circumstances, Ms. Fowler said.
Officials at both Fletcher Allen and BJC HealthCare said they had worked hard to inform patients about new insurance options during the recent enrollment period and to help them enroll in coverage. Both systems provide financial aid to lower-income people with high insurance costs.
The financial challenges are particularly daunting in the more than 24 states that have not yet expanded Medicaid, including Missouri. The Affordable Care Act reduces federal aid for uncompensated care on the assumption that hospitals would replace much of the lost income with payments for patients newly covered by Medicaid.
But the Supreme Court in 2012 gave states the right to opt out of the expansion. Now hospitals that treat the poor and uninsured in states like Missouri are losing federal aid without getting new Medicaid payments, a problem they say is threatening their bottom lines. Robert Hughes, the president and chief executive of the Missouri Foundation for Health, an independent philanthropic group, said BJC HealthCare was “in a tough spot” because of the state’s refusal to expand Medicaid.
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