Hospital charity care is free or discounted medical care that hospitals give patients who cannot afford the bill. Every nonprofit hospital in the country must have a written financial assistance policy under IRS Section 501(r), but federal law does not set an income limit. Each hospital picks its own. In practice, most nonprofit hospitals give fully free care at or below 200% of the federal poverty level, which is $31,920 for one person and $66,000 for a family of four in 2026, with sliding-scale discounts running up to 300% or 400% FPL. Roughly 19 states go further and set legal minimums that apply to for-profit hospitals too.
This guide covers the 2026 income thresholds, which states mandate what, how the 340B drug pricing program fits in, and the exact steps to apply.
2026 Income Limits for Hospital Charity Care
Charity care policies are written as a percentage of the federal poverty level (FPL). The 2026 HHS poverty guidelines for the 48 contiguous states and D.C. took effect in January 2026. Here is what the common charity care cutoffs translate to in dollars.
| Household Size | 100% FPL | 200% FPL (usual free care line) | 300% FPL | 400% FPL |
|---|
| 1 | $15,960 | $31,920 | $47,880 | $63,840 |
| 2 | $21,640 | $43,280 | $64,920 | $86,560 |
| 3 | $27,320 | $54,640 | $81,960 | $109,280 |
| 4 | $33,000 | $66,000 | $99,000 | $132,000 |
| 5 | $38,680 | $77,360 | $116,040 | $154,720 |
| 6 | $44,360 | $88,720 | $133,080 | $177,440 |
| 7 | $50,040 | $100,080 | $150,120 | $200,160 |
| 8 | $55,720 | $111,440 | $167,160 | $222,880 |
Alaska and Hawaii use higher guidelines, so the same FPL percentage translates to a higher dollar figure in those states.
A widely cited study in Health Affairs found that among nonprofit hospitals offering free care, published income limits ranged from 41% to 600% of the poverty guideline. That spread is the single most important fact about charity care: two hospitals in the same city can give completely different answers to the same patient.
What Federal Law Guarantees: Section 501(r)
Section 501(r) of the Internal Revenue Code, added by the Affordable Care Act, applies to every hospital that holds 501(c)(3) tax-exempt status. It imposes four requirements.
1. A written financial assistance policy (FAP). The hospital must have one, publish it, and make it available free of charge. It must state the eligibility criteria, how discounts are calculated, and how to apply. It must be translated into languages spoken by significant portions of the community.
2. A written emergency medical care policy. The hospital cannot discriminate in providing emergency care based on FAP eligibility.
3. A limit on charges. Anyone who qualifies for financial assistance cannot be charged more than the "amounts generally billed" (AGB) to insured patients. This alone often cuts a bill by 50% or more, because uninsured patients are otherwise billed off the hospital's list prices.
4. Limits on collections. Before starting extraordinary collection actions (selling debt, reporting to credit agencies, suing, garnishing wages, placing liens), the hospital must make reasonable efforts to determine FAP eligibility and must wait at least 120 days from the first post-discharge bill. It also must accept and process applications for a full 240 days from that first bill.
The 240-day application window matters most. If your bill is four or six months old and you never applied, you are usually still inside the window. Many hospitals accept applications even later.
Two limits of 501(r) are worth naming. It does not set a minimum income threshold, and it does not apply to for-profit or government-run hospitals. That is what state law fills in.
Hospital Charity Care by State: Where the Law Sets a Floor
About 19 states require some level of charity care from all hospitals, including for-profit ones: California, Colorado, Delaware, Illinois, Indiana, Kansas, Maine, Maryland, Nevada, New Jersey, New Mexico, New York, Ohio, Oregon, Rhode Island, South Carolina, Tennessee, Virginia, and Washington. The strength of those laws varies enormously.
| State | Minimum free care | Discounted care | Notable protections |
|---|
| California | At or below 400% FPL (uninsured and high medical cost patients) | Discount payments up to 400% FPL | As of 2025, no asset test, no application deadline, no reporting hospital debt to credit bureaus |
| Washington | 300% FPL at large hospitals, 200% FPL at other hospitals | 75% off to 350% FPL, 50% off to 400% FPL (large hospitals) | Written screening required for all patients |
| Oregon | 200% FPL | 75% off 201 to 300%, 50% off 301 to 350%, 25% off 351 to 400% | Screening required for uninsured patients and bills over $500; refunds if later found eligible |
| Maryland | 200% FPL | Reduced-cost care 200% to 300% FPL | Financial hardship provision when medical debt exceeds 25% of household income |
| New Jersey | 200% FPL (state-funded Charity Care) | Sliding scale 200% to 300% FPL | Uninsured patients under 500% FPL generally capped near 115% of the Medicare rate |
| New York | Roughly 200% FPL, no or nominal out-of-pocket cost | Charges capped as a small share of the Medicaid rate for 200% to 400% FPL | Eligibility ceiling raised from 300% to 400% FPL |
| Illinois | Under 200% FPL for charges above a small threshold | Uninsured discount up to 600% FPL at non-rural hospitals, 300% FPL at rural and critical access hospitals | Annual billing cap tied to a share of gross income |
| Colorado | Screening required; assistance targeted at uninsured up to 250% FPL | Sliding scale under Hospital Discounted Care | Caps on monthly payment amounts and payment plan length, formal appeal rights |
| Rhode Island | 200% FPL | Partial coverage to 300% FPL | Charity care tied to hospital licensing |
| Maine | Statutory minimum near 150% FPL | Varies by hospital | Many Maine systems voluntarily go well above the minimum |
| Nevada | Applies only to certain hospitals, at very low income thresholds | Limited | Weakest mandate of the mandate states |
| New Mexico | Protections at 200% FPL under the Patients' Debt Collection Protection Act | Varies | Strong limits on collections against low-income patients |
Delaware, Indiana, Kansas, Ohio, South Carolina, Tennessee, and Virginia require hospitals to maintain a charity care policy or participate in an indigent care program, but generally do not set a hard statewide income floor. In the other 31 states, the nonprofit hospital's own 501(r) policy is the operative rule.
State minimums are floors, not ceilings. A hospital in Maryland can offer free care to 300% FPL even though the law only requires 200%. Always read the hospital's own policy rather than assuming the state minimum is the answer.
The 340B Program: What It Does and Does Not Do for Your Bill
The 340B Drug Pricing Program requires drug manufacturers that participate in Medicaid to sell outpatient drugs at deep discounts, often 25% to 50% below list, to certain safety net providers. It is run by HRSA's Office of Pharmacy Affairs.
Eligible "covered entities" include:
- Disproportionate share hospitals (hospitals serving a high share of Medicaid and low-income Medicare patients)
- Children's hospitals and free-standing cancer hospitals
- Critical access hospitals, sole community hospitals, and rural referral centers
- Federally qualified health centers (FQHCs) and FQHC look-alikes
- Ryan White HIV/AIDS clinics and State AIDS Drug Assistance Programs
- Certain black lung, hemophilia, tuberculosis, and family planning clinics
Here is the honest answer most articles skip: the 340B statute does not require covered entities to pass the discount to you. Hospitals can and do use 340B revenue to fund uncompensated care, sliding-scale pharmacy programs, transportation, and behavioral health services, but there is no legal requirement to reduce the specific price you pay for a specific drug.
Two practical implications:
A hospital's 340B status is a strong signal it serves low-income patients. DSH hospitals qualify precisely because they treat a high volume of Medicaid and low-income Medicare patients. Those hospitals usually have the more generous financial assistance policies. You can check whether a hospital or clinic is a covered entity in HRSA's public 340B OPAIS database.
FQHCs are different, and better, for prescriptions. Community health centers funded under Section 330 must offer a sliding fee scale based on income and family size, with a full discount (nominal fee only) at or below 100% FPL and partial discounts up to 200% FPL. Many run in-house 340B pharmacies where uninsured patients pay a fraction of retail. If you need ongoing medication and have no coverage, an FQHC is usually cheaper than a hospital outpatient pharmacy.
One 2026 development to watch: in February 2026, a federal district court vacated and remanded HHS's 340B Rebate Model Pilot Program, and HHS is reconsidering how to proceed. The dispute is between manufacturers and providers over how discounts are delivered. It does not change patient-facing charity care rules.
How to Apply for Hospital Charity Care
Step 1: Get the policy, not the summary. Ask the billing or patient financial services department for the full financial assistance policy and the plain-language summary. Both must be free and available on the hospital website. Search the hospital name plus "financial assistance policy" or "FAP."
Step 2: Check the income line before you assume you do not qualify. Compare your household income against the table above. If the hospital's cutoff is 400% FPL, a family of four earning $130,000 can still qualify for a partial discount. Household size is usually defined the way it is on your tax return.
Step 3: Ask for the application in writing and note the deadline. Federal law requires a minimum 240-day window from the first post-discharge bill. Some states, including California, prohibit application deadlines entirely.
Step 4: Gather documents. Most hospitals ask for:
- Photo ID and proof of address
- Last 2 to 3 pay stubs, or a letter from your employer
- Last year's tax return or W-2
- Recent bank statements (some states, including California, now prohibit hospitals from counting assets)
- Proof of any benefits you receive: SNAP, Medicaid denial letter, SSI, unemployment
- The itemized bill and account number
Step 5: Ask about presumptive eligibility. Many hospitals automatically approve patients who are enrolled in Medicaid, SNAP, WIC, or free school lunch, or who are homeless or deceased with no estate. Presumptive eligibility skips most of the paperwork. Say the words "presumptive eligibility" to the financial counselor.
Step 6: Ask them to pause collections while the application is pending. Under 501(r), the hospital must suspend extraordinary collection actions while it processes a complete application. Get the pause confirmed in writing.
Step 7: Apply for Medicaid at the same time. Most hospitals require you to apply for public coverage first, and many states have retroactive Medicaid coverage that pays bills from up to three months before your application date. Even a Medicaid denial letter strengthens your charity care file.
If You Are Denied
Ask for the denial in writing with the specific reason. The most common reasons are fixable: income counted before deductions, household size counted wrong, missing a single document, or applying to the wrong entity (the hospital and the doctors who treated you often bill separately, and the physician group has its own policy).
Then, in order:
- Request an appeal. Colorado, Oregon, and California require a formal appeals process.
- Ask for a hardship review if your medical debt is large relative to your income. Maryland defines financial hardship as medical debt exceeding 25% of household income over 12 months, and several systems use similar rules voluntarily.
- Ask for the amounts generally billed rate anyway. Even outside charity care, many hospitals will apply an uninsured discount.
- Ask for an interest-free payment plan. Several states cap monthly payments as a percentage of income.
- File a complaint with your state hospital regulator or attorney general. Washington's attorney general has actively enforced its charity care law and recovered refunds for patients.
Common Mistakes
Assuming you earn too much. Illinois runs to 600% FPL at non-rural hospitals. California runs to 400%. Plenty of middle-income households qualify for partial discounts.
Paying the bill first. Several states, including Oregon, require refunds if you are later found eligible, but it is much simpler to apply before paying. If you already paid, apply anyway and ask for a refund.
Only applying to the hospital. The emergency physicians, radiologists, anesthesiologists, and pathologists often bill separately and are not covered by the hospital's policy. Apply to each one.
Missing the 240-day window. It runs from the first post-discharge billing statement, not the date of service.
Frequently Asked Questions
What income qualifies for hospital charity care in 2026?
Most nonprofit hospitals provide fully free care at or below 200% of the federal poverty level, which is $31,920 for one person and $66,000 for a family of four in 2026. Sliding-scale discounts commonly extend to 300% or 400% FPL, which is $99,000 to $132,000 for a family of four. Individual hospital policies range from roughly 41% to 600% FPL, so check the specific hospital.
Do for-profit hospitals have to offer charity care?
Not under federal law. Section 501(r) applies only to nonprofit 501(c)(3) hospitals. About 19 states, including California, Washington, Illinois, and New Jersey, require all licensed hospitals to offer financial assistance regardless of tax status.
Does the 340B program lower my hospital bill?
Not directly. The 340B statute requires drug manufacturers to discount outpatient drugs for eligible providers, but it does not require those providers to pass the savings to patients. A hospital's 340B status is a useful signal that it serves many low-income patients and likely has a solid financial assistance policy. For prescriptions specifically, FQHCs are required to offer a sliding fee scale and often provide the largest direct savings.
How long do I have to apply for charity care?
At least 240 days from the first post-discharge billing statement at any nonprofit hospital, under IRS rules. California prohibits application deadlines entirely. Many hospitals accept applications after the federal window closes, including on accounts already sent to collections. Always ask.
Can I get charity care if I have insurance?
Yes, at many hospitals. Financial assistance policies frequently cover insured patients whose out-of-pocket costs are high relative to income. California explicitly covers "high medical cost" patients, and Maryland has a financial hardship provision for households whose medical debt exceeds 25% of income.
Will applying for charity care hurt my credit?
No. Applying does not affect your credit. Under 501(r), a hospital must suspend extraordinary collection actions, including credit reporting, while a complete application is pending. Several states, including California and Maryland, restrict hospitals from reporting medical debt to credit bureaus at all, and paid medical collections and smaller unpaid medical debts have been removed from consumer credit reports by the major bureaus.
What if the hospital already sent my bill to collections?
Apply anyway. If you are approved, the account is typically recalled from collections and the balance is reduced or eliminated. Federal rules require the hospital to make reasonable efforts to determine eligibility before and during collection activity, and a determination of eligibility after the fact generally requires refunding anything you overpaid above the amounts generally billed.
Is charity care the same as Medicaid?
No. Medicaid is health insurance that pays for future and sometimes retroactive care. Charity care is a hospital-level discount on bills you already have. They work together: most hospitals require you to apply for Medicaid first, and a Medicaid denial letter supports your charity care application. If you qualify for Medicaid, that is almost always the better outcome because it covers ongoing care.
Sources
General information, not legal or financial advice. Hospital policies and state rules change. Confirm details with the hospital's financial assistance office and your state health agency before applying.
