We’ve all heard of non-insured people who get emergency care, and their fees are just absorbed by the system. How exactly does that work?
Let’s say a guy (adult) is in a car accident and is taken to the ER. He’s conscious enough to tell them that he’s broke and doesn’t have insurance. He needs expensive surgery, and gets it, and survives.
I assume they check his tax returns to verify that he’s below a certain income level. I also assume they check his employer, if he’s employed. But what else? Can they find out whether he has investments, including IRA’s? If he’s married, can they examine his spouse’s income and investments?
If they discover that he’s employed, can they attach his income? Can they attach his investments? Can they seize his bank account? Can they get the money from his spouse? Can they take his house? His car? What if they discover he has a Picasso hanging in his living room?
If he doesn’t qualify for charity care or other reduced payment options and if he didn’t pay the bill, it would eventually be turned over to a collection agency who would go after the money just like any other collection item.
No, hospitals do not check his tax returns, or his income from his employer.
They bill him. He pays or he doesn’t pay. They maybe sue him if they believe for some reason that he is hiding money, but mostly they sell off smaller debts to some collection agency, who duns him mercilessly for years. Mostly, they would treat him like any other company would treat any other person who didn’t pay a bill. He may have to declare bankruptcy – that’s not uncommon.
There are some exceptions to this. Some hospitals are linked to charities that raise funds specifically for the purpose of paying the expenses for some of the treatment. The hospital might pay it out of funds they receive from such a charity. Or they might steer the patient to a similar charity and ask the patient to apply to the charity directly to pay the bills.
There are also some things related to taxes that it can do. I don’t know exactly how it works, but I do know that my hospital “contributes” something in the neighborhood of 30 million dollars per year in “free medical services” to the community. Much of this is bills that the hospital tries and fails to collect, and so it becomes part of the line item on the annual budget, and provides some kind of tax write-off.
Here’s how it worked with my nephew in California, for anecdotal purposes only.
He went to the emergency room, was evaluated and admitted. By the time his (legal) next of kin arrived he was in critical condition and the procedures were stacking up quickly.
When the next of kin verified that my nephew was self-employed and had no insurance, the hospital and next of kin immediately filed for Medicaid for him. I think next-of-kin also paid some sort of cash deposit, but it was a token at most.
Medicaid verified my nephew’s (lack of) income and insurance. It will pay the hospital bills from the time of the initial filing. My nephew is responsible for the charges before the filing, which means the hospital will probably have to write them off.
I don’t have a clue what would have happened if my nephew had enough income or assets not to qualify for Medicaid.
Some hospitals will check to see if the person is eligible for COBRA under their prior employer’s plan. Often times the hospital will pay for COBRA coverage, because it’s a lot cheaper to pay a $500 premium than be stuck with a $5000 unpaid hospital bill.
When my M-I-L had appendicitis last year. She went to the emergency room and wrote on the insurance paperwork that she had no insurance and no means to pay any charges or fees associated with her care.
They took her appendix out, treated her like a normal patient and never billed her.
Federal law requires hospitals to provide emergency care regardless of the patients ability to pay.