Protecting Uninsured Patients from High Hospital Charges: Lessons from California
For millions of uninsured Americans, hospital emergency departments (EDs) are one of the few options for medical care, both urgent and non-urgent. Yet this care may come at a significant price. Unlike their insured counterparts, uninsured and other “self-pay” patients receive hospital bills based on “billed charges.” These charges have risen rapidly over time and now bear little relationship to the actual market prices paid by insured patients. For the uninsured, high billed charges may translate into a potentially overwhelming financial burden, particularly for low-income patients who may face massive medical debt and even financial ruin as they seek the care they need.
In a HCFO-funded study, Glenn Melnick, Ph.D., professor at University of Southern California, and colleagues assessed the responses of California hospitals to the state’s Hospital Fair Pricing Act, legislation passed in 2006 that requires hospitals to develop financial assistance policies to make care more affordable for the state’s uninsured population.2 The law also restricts hospitals’ bill collection practices and limits the amounts they can collect from uninsured and low-income patients. As the researchers note, California’s approach offers a promising policy option for other states as they consider how best to assist the millions of people who will remain uninsured during and after the implementation of health reform.