I have a friend who recently had a stay in a hospital. She received a bill, but although she has insurance, the bill was still over $1500. This was quite a quandary, since she doesn’t have that kind of money at hand. What would she do?

She did some looking on the internet and discovered that she was eligible for a considerable discount. Although she didn’t recall being told this when she went to the hospital (it may have been among the many pages of documents she signed at admission), she did some digging and realized that all was not lost.

In New York State, there is a law that states “Patients without insurance and earning up to 400% FPL, and ‘underinsured’ patients earning up to 400% FPL are eligible to apply for financial assistance.” FPL is the Federal Poverty Line and there are guidelines for the contiguous 48 states and DC, with slightly higher FPLs for Alaska and Hawaii. In a one-person household, the FPL is currently $15,960. 400% of that figure is $63,840. Since my friend’s income is around $45,000, her Federal Poverty Level was calculated at 282% and she thus had to pay only 10% of her bill. She now owed the hospital $159.60 instead of $1,596! By the way, an "underinsured individual" is specifically defined as someone whose paid medical expenses have exceeded 10% of their income in the last 12 months.

You can imagine her relief at hearing this. I had never heard of this health statute before, and I am so glad she discovered it and then asked the hospital about it. There was paperwork she had to fill out, of course, but the hospital did respond relatively quickly and let her know that she was able to access this support.

When we hear of folks being crushed by medical debt, it is good to know that there are some resources available. In a household of two people, the FPL is $21,640, and 400% of that is $86,560. Many folks working minimum wage jobs without insurance should be aware that this financial relief is available.

The one caveat that I found is this: paying for your medical care with a credit card has certain risks for the patient. By paying with a credit card, the patient is no longer entitled to state and federal protections regarding medical debit such as property liens and wage garnishment. Patients are supposed to be told this before they try to pay with a credit card. Using a debit card is fine; it protects all the patient’s rights; it is only the credit card use that has risks for the patient.

My friend was elated to discover that she was not about to be buried in medical debt, and surprised that she hadn’t realized she was eligible until she did some online research. It seems that such information should be more widely known. She was very happy that her bill had received a 90% discount!