How Many of Your Employees Are Eligible For Free Hospital Care?

The ACA has a provision regarding not-for-profit hospitals – in return for paying no taxes, hospitals must give back to their communities free or discounted care for community citizens who qualify.

Free care (some call it charity care – others call it subsidized care which is today’s politically correct term) is tied to a % of the federal poverty level. Some hospitals have more generous guidelines than others. But the rule of thumb is if you make 200% or less of the federal poverty level you get free care even if you have health insurance. If you are between 200-400% of the federal poverty level, you will get discounted care up to 90% off charges, even if you have health insurance.

Risk transfer strategy: Amend your plan document to make the plan excess cover to hospital financial assistance programs. Here is how it would work:

(1). Patient receives treatment, in-patient or out-patient, at a hospital.

(2) Claim is received by the TPA. TPA determines if the hospital has a financial assistance program. If so, the eligibility requirements are reviewed and the patients family income is calculated to determine if the member is a potential candidate for the hospital’s financial assistance program.

(3) Claim is suspended and a “claim” for financial assistance is initiated upon behalf of the patient

4). If financial assistance is provided (remember, it’s the law), the plan pays secondary benefits for any outstanding, eligible charges. THIS PROCESS IS NO DIFFERENT THAN WHAT WE DO NOW WHEN MEMBERS HAVE TWO INSURANCE POLICIES – A DETERMINATION IS MADE OF WHICH PLAN IS PRIMARY AND WHICH IS SECONDARY.

How many Americans qualify for free hospital coverage under the ACA provisions? Consider this – 50% of the US is now at or <275% of the FPL…

Idea: Go back over the past 24 months, pull out all of your hospital claims, determine the federal poverty level category the patient falls within, look up each hospital’s financial assistance policy guidelines to determine how much your plan overpaid in hospital claims. You may be astounded by the numbers. (45-55% of a group’s overall spend is hospital charges).

This risk transfer strategy is the same strategy as the specialty drug risk transfer strategy many of our clients are already doing with good success.

NOTE: A good resource to learn more about how a plan sponsor can take advantage of this ACA provision is Doug Aldeen, ERISA attorney in Austin, Texas.

Doug Aldeen, Esq., Attorney At Law. Mobile: 309-531-3749


111 Sandra Muraida Dr., Suite 9P, Austin, TX. 78703


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