The Obama Administration has released new regulations requiring nonprofit hospitals to provide more discounted or free care to lower-income Americans. The NYT reports:
Additionally, hospitals must try to determine whether a patient is eligible for assistance before they refer a case to a debt collector, send negative information to a credit agency, place a lien on a patient’s home, file a lawsuit or seek a court order to seize a patient’s earnings […]
Policies will vary. Some hospitals may offer free medical care to anyone with income below the federal poverty level ($11,670 a year for an individual), while others may set the threshold twice as high. Others still could provide discounts on a sliding scale for people with incomes up to three times the poverty level.
In the words of Republican Senator Chuck Grassley, these new regulations could make these hospitals “earn their tax exemption.” Nonprofit hospitals have often failed to live up to the charitable reputation that justifies their tax-exempt status, and ensuring that they really do provide discounted or free care to lower-income Americans is a noble goal. If these new rules provide immediate relief to Americans very much in need of it, they are very welcome.
This move could also be seen as a kind of tit-for-tat deal with hospitals who won big under the ACA and are now being forced to give something back. Hospitals profit, lower-income Americans get cheap or free care, and everyone wins. Except not really, because of the biggest drivers of costs in the U.S. health care system is hospitals themselves, particularly monopolistic ones. A more important type of reform would be trying to block hospital consolidation, either through anti-trust legislation or other means. We could at least not accelerate it, as the ACA in fact does. The ACA pushes more people into a dysfunctional system in a way that raises profits for hospitals and costs for many Americans. These new rules only give that system a charitable veneer.