New Law Increases Free Or Reduced-cost Hospital Care In Washington State

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Starting tomorrow, 4 million Washingtonians will qualify for free or discounted care at hospitals across Washington as a result of legislation requested by Attorney General Bob Ferguson.

The legislation requires large hospital systems to provide more financial assistance. Beginning July 1, approximately half of all Washingtonians will be eligible for free or reduced-cost care at hospitals that represent approximately 80 percent of the licensed beds in the state.

Ferguson worked with prime sponsor Rep. Tarra Simmons, D-Bremerton, and Reps. Eileen Cody, D-Seattle, and Nicole Macri, D-Seattle, on HB 1616 to strengthen Washington’s charity care law. Ferguson’s Attorney General request legislation expands charity care eligibility to more than 1 million Washingtonians, and guarantees free hospital care to an additional million Washingtonians who are currently eligible for discounted care.

“This is a landmark achievement for affordable health care,” Ferguson said. “Too many Washingtonians are just one hospital bill away from financial crisis. Our new law moves us away from a system where a single mom working two minimum wage jobs didn’t qualify for any help with her hospital bills, to something that offers help to about half the people in Washington. It’s the right thing to do. Make sure you know what kind of assistance you qualify for, and if you aren’t getting it, contact my office.”

“No Washingtonian should be bankrupted by a trip to the emergency room,” Rep. Simmons said. “I am proud to have worked with the Attorney General to update and standardize Washington’s charity care law. Four million Washingtonians will now be eligible for free or reduced out-of-pocket hospital costs making our healthcare system fairer and more equitable.”

Ferguson’s and Simmons’ legislation establishes two tiers of financial assistance — one for large health care systems and another for smaller, independent hospitals. The new law gives Washington the strongest protections in the country for out-of-pocket hospital costs.

Nationwide, about two-thirds of individuals who file for bankruptcy cite medical issues as a key contributor, and more than half of collection items on credit reports are for medical debts.

Access to care is also an equity issue, as communities of color are disproportionately underinsured, and especially vulnerable to catastrophic and unexpected medical expenses.

For example, according to 2019 data from the Federal Reserve, the median bank account balance for Black households is about $1,500, less than one-fifth the median balance for white households of $8,200. The median account balance for Latino households is about $2,000. One in five individuals in majority nonwhite zip codes have at least one medical debt in collections on their credit report.

The new law significantly increases eligibility for full write-offs of out-of-pocket hospital costs, as well as expanding eligibility for discounts. The law ensures all Washingtonians within 300 percent of the federal poverty level are eligible for financial assistance, with discounts up to 400 percent of the federal poverty level for the vast majority of Washington hospital beds.

SHB 1616 guarantees approximately 3 million Washingtonians access to free hospital care at Tier 1 hospitals, and discounted care at the Tier 2 hospitals generally located in rural communities. Approximately 4 million Washingtonians will have access to free or discounted hospital care at Tier 1 hospitals, which represent approximately 80 percent of all licensed beds.

For example, a family of four with an income of up to $111,000 will now qualify for up to 50 percent off their out-of-pocket costs at Tier 1 hospitals. A family of four earning up to $55,500 can now pay zero out-of-pocket costs at any hospital in the state.

The prior law only provided full write-offs for those earning up to 100 percent of the federal poverty level — up to $17,420 a year for a two-person household — and sliding scale discounts up to 200 percent. Approximately 1.8 million Washingtonians were eligible for financial assistance under that law. A single parent working two minimum wage jobs at 50 hours per week was not eligible for financial assistance at Washington hospitals. The new law changes that.

AGO enforcement of charity care law

Ferguson has filed lawsuits against three Washington hospitals for violating Washington’s Consumer Protection Act by preventing low-income patients from accessing charity care. 

Under state law, hospitals are required to:

  • Provide notice of the availability of charity care both verbally and in writing;
  • Screen patients for charity care eligibility before attempting to collect payment, and;
  • Only require patients to provide one income-related document to prove charity care eligibility.

In February, Ferguson announced a consumer protection lawsuit against five Swedish hospitals and nine Providence-affiliated facilities for failing to ensure that eligible low-income Washingtonians receive the discounts to which they are legally entitled, and aggressively collecting money from charity care-eligible low-income Washingtonians.

As the result of a 2017 lawsuit, CHI Franciscan provided $41 million in debt relief and $1.8 million in refunds, in addition to rehabilitating the credit of thousands of patients who were not offered charity care when they were eligible at eight of its hospitals in Washington. CHI Franciscan also paid $2.46 million to the Attorney General’s Office to cover the costs of the investigation and enforcement of the Consumer Protection Act.

Ferguson also sued Capital Medical Center in Olympia in 2017 over its charity care practices. To resolve the lawsuit, Capital provided at least $250,000 in refunds and more than $131,000 in debt relief. In addition, Capital paid $1.2 million to the Attorney General’s Office.

Source: Washington State Attorney General

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