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Sierra Freeman has a rare genetic disorder that makes her prone to aneurysms and has sent her to the hospital repeatedly.
In July 2022, the Stockton resident had surgeries to repair an aortic tear and a ruptured blood vessel in her brain and spent two months at Stanford Medical Center, which hosts one of the leading programs in connective tissue disorders like the one Freeman has.
Over the next 18 months, she racked up more than $4 million in medical bills, most of which was paid through her employee health insurance. Her share was $14,343, which she says she’d still be paying if not for Stanford’s financial assistance program.
But Stanford, like many hospitals, didn’t make it easy for her. It took months of research and persistence on her part before the hospital waived $13,971.
“I feel like I now have the knowledge and power to apply for this the next time it happens. But I wish more people knew about it,” Freeman said.
A bill moving through the California Legislature would make the process of qualifying for hospital financial assistance easier for some patients. Assembly Bill 1312 would require hospitals to check whether patients are eligible for charity care or discounted payments before sending them a bill.
Specifically, the proposal would require hospitals to presume people enrolled in means-tested programs, such as food stamps and cash assistance, are eligible for financial aid without having to apply. People who are experiencing homelessness or who qualified for assistance from the same hospital in the previous six months would be automatically eligible.
It would also require hospitals to screen patients for eligibility if they are uninsured, enrolled in Medi-Cal with a share of cost or in a Covered California health plan before they are charged.
“We think, especially in light of the cuts that are happening at the federal level, that more and more this is going to be something that is needed in our community and throughout the state,” Sen. Pilar Schiavo, a Santa Clarita Democrat and author of the bill, said during the most recent meeting of the Senate Health Committee. “This is a … way to ensure that people know upfront that these programs are available to them to prevent the kind of crushing medical debt that unfortunately can really ruin families and their financial situations.”
Sen. Caroline Menjivar, chair of the Senate Health Committee, promised to continue discussions with Schiavo to add screening criteria for moderate-income patients with employer-sponsored insurance. The legislation has to pass the Senate by Sept. 12.
The bill recently went through a round of amendments after negotiations with the hospital lobby. Among the changes is a two-year implementation delay so hospitals can acquire the software necessary to screen patients. If the bill makes it out of the Legislature and is signed by Gov. Gavin Newsom, the earliest it could be enacted is July 2027. The California Hospital Association continues to oppose the bill as it awaits more possible amendments.
Applying for financial assistance
Under California law, hospitals are required to make financial assistance programs, also known as charity care, available to patients who earn up to 400% of the federal poverty level — $62,600 for a single person or $128,600 for a family of four — but also to patients whose medical expenses over the last year have exceeded 10% of their income.
Jan Emerson-Shea, a spokesperson for the California Hospital Association, said some hospitals go beyond that income threshold. Hospitals already promote their financial assistance programs through signs around the hospital, online and on medical bills sent to patients, Emerson-Shea said.
Still, many patients do not know about these programs, surveys and research have shown. A 2023 national survey by Dollar For, a nonprofit organization that helps people apply for financial assistance, found roughly half the patients who are potentially eligible for financial assistance do not apply.
Freeman said she doesn’t recall anyone at Stanford Medical Center telling her to apply for charity care, but she did find the application online.
The first time she applied on her own she was denied, she said. She applied a second time, this time with the help from Dollar For. In April 2024 Freeman received a letter from Stanford letting her know that her balance was being waived. She was also able to get back the money she’d already paid.
But the application process was not intuitive, she said. It took help from experts and emails back and forth with the hospital billing department. Yet, given her condition, it’s a process she’s likely to have to do again.
“The tricky thing is I'm supposed to be very low stress, right? Because I have a heart condition, and the disorder is made worse if your blood pressure is high, if you're getting stressed,” Freeman said. “Like, I should be very calm, but I'm always thinking about the bills.”
The burden of medical debt
A handful of other states, including Maryland, Illinois and Oregon, have financial assistance screening requirements similar to what California is attempting.
A recent report from Oregon’s health agency showed that in the first five months its state law was in effect, hospitals reported challenges — primarily, with the software from third-party vendors that hospitals purchased to help check people’s income against publicly available financial data sources. Oregon health officials estimated in January it would take up to nine months before the program ran smoothly.
Los Angeles County is working with the Hospital Association of Southern California to develop a presumptive eligibility tool that would be available to local hospitals, saving them the need to go to third-party vendors.
“There's nothing else like it in the country, and it really solves the problem of, OK, we know this is a good thing to do, but how do we make sure every hospital can do it?” said Dr. Naman Shah, with the Los Angeles County Department of Public Health.
Automatic qualification for financial assistance is critical for preventing medical debt, Shah said.
About 4 in 10 Californians, or an estimated 15 million people, carry medical debt, according to the California Health Care Foundation. That includes hospital bills, but also debt owed to doctors and dental offices. Research has shown that even small amounts of debt can disrupt people’s lives and the fear of it often keeps them from seeking timely care.
Many patients who are unaware of financial assistance programs resort to GoFundMe accounts, borrow money from family or friends, or charge their medical bills onto a credit card, said Selene Betancourt, a senior policy manager at the California Pan-Ethnic Health Network, one of the bill sponsors.
“And that makes it even harder to relieve because now it's owned by a credit card company, a bank, and not by the hospitals,” Betancourt said.
Given the pervasive burden of medical debt and the lack of federal action, states and local governments have taken it upon themselves to provide at least some relief.
Last year, for example, the California Legislature passed a law to prevent medical debt from showing up on credit reports. The Biden administration announced a similar effort nationwide last summer, but recently, a judge, with support from the Trump administration, blocked the rule from taking effect.
At a more local level, Los Angeles County earlier this year rolled out a medical debt relief program, eliminating debt for approximately 134,000 residents so far, according to county health officials.
To do this, Los Angeles County partnered with the national nonprofit Undue Medical Debt to purchase debt in bulk at a discounted rate from health systems and collection agencies. The nonprofit runs similar projects in other states.
Debt relief efforts don’t fundamentally solve the issue of medical debt, “But when people are bleeding, they need a band aid,” said Allison Sesso, CEO of Undue Medical Debt. “There could be future debts for these individuals, but let's remove the ones that are in front of them, so that the hill isn't that much higher for them to climb.”
Sesso’s organization last month also announced that a recent donation allowed the group to pay off medical bills for an additional 47,000 Californians, largely in Riverside and San Bernardino counties. Those people should have started to receive notifications at the end of June, according to the nonprofit.
Supported by the California Health Care Foundation (CHCF), which works to ensure that people have access to the care they need, when they need it, at a price they can afford. Visit www.chcf.org to learn more.
This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.
