Charity care and Medicaid both help with hospital bills, but they work very differently. Medicaid is a government health insurance program that covers ongoing medical care for people with low incomes. Charity care is a hospital financial assistance program that reduces or eliminates specific medical bills you have already received. You may qualify for one or both programs depending on your income, household size, and state of residence. Check which programs you qualify for in about two minutes.
What Is Charity Care (Hospital Financial Assistance)?
Charity care, also called hospital financial assistance, is a program run by individual hospitals that provides free or discounted care to patients who cannot afford their medical bills. The Affordable Care Act (ACA) requires all nonprofit hospitals to maintain a written Financial Assistance Policy (FAP). Since more than half of all hospitals in the United States are nonprofits, most patients have access to these programs.
Key facts about charity care:
- Each hospital sets its own eligibility rules and income thresholds
- Covers specific hospital bills you have already received
- Available to both uninsured and insured patients (for copays, deductibles, and coinsurance)
- Nonprofit hospitals must consider applications for bills less than 240 days old
- If approved, the hospital writes off your bill partially or completely
- Hospitals must refund any payments you already made toward a qualifying bill
- Does not provide ongoing health coverage
What Is Medicaid?
Medicaid is a joint federal and state health insurance program that covers over 77 million Americans. It provides comprehensive health coverage including doctor visits, hospital stays, prescriptions, preventive care, and more. Unlike charity care, Medicaid is ongoing insurance that covers future medical needs, not just past bills.
Key facts about Medicaid:
- Funded jointly by federal and state governments
- Covers a wide range of medical services on an ongoing basis
- Eligibility is based on income, household size, age, disability status, and other factors
- Most states have expanded Medicaid to cover adults with incomes up to 138% of the Federal Poverty Level (FPL)
- You can apply any time of year through your state Medicaid agency or Healthcare.gov
- No premiums in most states, with little to no cost sharing
How Do Charity Care and Medicaid Compare?
The table below breaks down the core differences between charity care and Medicaid across the categories that matter most when you need help with hospital bills.
| Feature | Charity Care | Medicaid |
|---|---|---|
| What it is | Hospital bill discount or forgiveness program | Government health insurance |
| Who runs it | Individual hospitals | State and federal government |
| Type of help | Reduces or eliminates specific bills | Ongoing health coverage |
| Income limits | Varies by hospital (commonly up to 200% to 400% FPL) | Up to 138% FPL for adults in expansion states |
| Covers future care | No | Yes |
| Covers past bills | Yes | Limited (up to 3 months retroactive) |
| Insurance required | No (available with or without insurance) | It IS insurance |
| Application | Apply at each hospital separately | One application covers all providers |
| Who qualifies | Anyone meeting hospital income guidelines | Must meet state eligibility criteria |
| Cost to patient | Free or discounted care | Usually no premiums, minimal copays |
| Legal requirement | Required for nonprofit hospitals (ACA) | Federal program established by law |
What Are the Income Limits for Charity Care vs Medicaid?
Income limits are one of the biggest differences between these two programs. Medicaid uses standardized federal and state thresholds. Charity care thresholds vary from hospital to hospital.
Medicaid Income Limits
In states that have expanded Medicaid under the ACA, most adults qualify with household incomes up to 138% of the Federal Poverty Level. Children typically qualify at higher income levels, often up to 200% FPL or more depending on the state. The following table shows approximate Medicaid income limits for adults in expansion states. Check with your state Medicaid office for current thresholds, as these figures are updated annually.
| Household Size | 138% FPL (Adult Expansion) | 200% FPL (Children, Typical) |
|---|---|---|
| 1 | Approximately $20,800/year | Approximately $30,100/year |
| 2 | Approximately $28,100/year | Approximately $40,700/year |
| 3 | Approximately $35,400/year | Approximately $51,300/year |
| 4 | Approximately $42,700/year | Approximately $61,900/year |
Note: These are approximate figures based on recent Federal Poverty Level guidelines. Actual thresholds vary by state and are updated each January. Use our free screener for personalized results.
Charity Care Income Limits
Since each hospital sets its own policy, charity care income limits can be significantly more generous than Medicaid. According to national data from Dollar For, a nonprofit that tracks hospital financial assistance policies:
- Households earning below approximately 200% FPL often qualify for free care (complete bill forgiveness)
- Households earning below approximately 300% to 400% FPL often qualify for discounted care (partial bill reduction)
Some hospitals are even more generous. For example, a family of four earning up to approximately $103,000 per year could qualify for financial assistance at certain hospitals. Always check your specific hospital's policy, as thresholds vary widely.
Can You Use Both Charity Care and Medicaid?
Yes. These programs are not mutually exclusive, and using both can give you the most complete protection against medical bills.
If you have Medicaid: Charity care can help cover costs that Medicaid does not pay, though this situation is uncommon since Medicaid typically has very low cost sharing. Some hospitals will apply financial assistance to any remaining balance after Medicaid pays.
If you do not have Medicaid: Charity care can be a lifeline for specific hospital bills, but it will not cover future medical needs. Applying for Medicaid gives you ongoing coverage so you are protected going forward.
Our recommendation: Apply for Medicaid first. If you are approved, you will have ongoing coverage for future care. Then apply for charity care at any hospital where you have outstanding bills. Start by checking your eligibility for all programs.
How to Apply for Charity Care
Follow these steps to apply for hospital financial assistance:
- Request the hospital's Financial Assistance Policy. By law, nonprofit hospitals must provide this document free of charge. Ask the billing department or check the hospital's website.
- Get the application form. The form is usually available online or from the billing department. Ask if it is available in your preferred language.
- Gather income documentation. You will typically need recent tax returns, pay stubs, or bank statements showing your household income.
- Complete and submit the application. Most hospitals accept applications by mail, fax, or email. Some allow online submission.
- Notify any debt collectors. If your bill is already in collections, tell the collector you have applied for financial assistance and request that collections be paused.
- Follow up on your application. Ask the hospital how long processing takes and check back regularly until you receive a decision.
Important: Nonprofit hospitals must consider applications for bills that are less than 240 days old. Some hospitals will consider older bills as well. Even if your bill has gone to collections, the hospital must pull it back to process your financial assistance application.
How to Apply for Medicaid
Medicaid applications can be submitted in several ways:
- Apply online through your state's Medicaid website or through Healthcare.gov.
- Apply by phone by calling your state Medicaid agency directly.
- Apply in person at your local Department of Social Services or Medicaid office.
- Apply by mail using a paper application from your state agency.
You will need to provide information about your income, household size, citizenship or immigration status, and other details. There is no enrollment period for Medicaid. You can apply at any time of year.
Tip: When you apply through Healthcare.gov, the system automatically checks whether you qualify for Medicaid, CHIP, or Marketplace insurance subsidies, so you can find the best option in one step.
What If You Live in a State That Has Not Expanded Medicaid?
As of 2026, most states have expanded Medicaid under the ACA, but a small number have not. In non-expansion states, many adults without children fall into a "coverage gap" where they earn too much for traditional Medicaid but too little for Marketplace subsidies.
If you live in a non-expansion state and do not qualify for Medicaid, charity care becomes even more important. Hospitals in these states are often aware that more patients lack coverage and may have more generous financial assistance policies as a result.
Regardless of your state, check your eligibility for all available programs to make sure you are not missing benefits you qualify for.
Does Charity Care Cover the Same Services as Medicaid?
No. The scope of coverage is very different between these two programs.
Charity care typically covers:
- Hospital inpatient stays
- Emergency room visits
- Some outpatient hospital services
- Procedures and surgeries performed at the hospital
Charity care usually does NOT cover:
- Doctor visits outside the hospital
- Prescription medications (outside the hospital stay)
- Dental, vision, or hearing care
- Preventive care and screenings
- Mental health and substance abuse treatment (outside the hospital)
- Bills from independent physicians who treated you at the hospital (these doctors bill separately)
Medicaid typically covers:
- Hospital stays and emergency care
- Doctor and specialist visits
- Prescription drugs
- Preventive care and screenings
- Mental health and substance abuse services
- Lab tests and X-rays
- Dental and vision care (varies by state)
- Transportation to medical appointments (in many states)
Frequently Asked Questions
Does charity care affect my credit score?
Charity care itself does not affect your credit score. If your application is approved and the hospital forgives your bill, the debt is eliminated. However, if your bill went to collections before you applied, the collection account may have already appeared on your credit report. Getting the bill forgiven through charity care should result in the collection being removed or updated.
Can I apply for charity care if I have health insurance?
Yes. Many hospitals offer financial assistance to insured patients who still face large out-of-pocket costs like deductibles, copays, and coinsurance. Each hospital's policy determines whether insured patients qualify, so check with your hospital's billing department.
Is charity care the same as Medicaid?
No. Charity care is a hospital-specific program that reduces or eliminates individual bills. Medicaid is government health insurance that provides ongoing coverage. They are separate programs with different eligibility rules, and you can apply for both.
How long does it take to get approved for charity care?
Processing times vary by hospital, but most applications are reviewed within 30 to 60 days. Ask the billing department about their typical timeline when you submit your application.
Can charity care be applied retroactively to old bills?
Nonprofit hospitals are required to accept applications for bills that are less than 240 days old. Some hospitals will consider older bills, and certain state laws may extend this deadline further. It is always worth asking, even for older bills.
What happens if I am denied charity care?
If your application is denied, ask the hospital for the reason in writing. You may be able to appeal the decision or negotiate a payment plan. You can also contact a patient advocate or nonprofit like Dollar For that helps patients navigate the financial assistance process.
Take the Next Step
Whether you need help with an existing hospital bill or want ongoing health coverage, understanding your options is the first step. Charity care and Medicaid serve different purposes, and many people benefit from both.
Use our free benefits screener to check your eligibility for Medicaid, charity care guidance, and over 10 other assistance programs in about two minutes. It is completely free, and your information stays private.
