California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

California Law Reduces Medical Bills for Uninsured, Study Finds

A California law that limits how much hospitals can charge uninsured patients has resulted in lower medical bills for some individuals and no-cost care for many low-income residents, according to a study published on Tuesday in Health Affairs, Kaiser Health News' "Capsules" reports.

Details of State Law

The 2006 law requires state hospitals to develop financial assistance policies for uninsured patients.

It also prohibits hospitals from charging certain uninsured patients higher rates than those paid by Medicare beneficiaries. Such uninsured patients include individuals:

  • Who earn less than 350% of the federal poverty level; or
  • Whose annual medical expenses exceed 10% of their income.

Study Findings

The study found that 81% of California hospitals reported being compliant with the 2006 law.

It also found that 97% of hospitals offered no-cost care to uninsured individuals whose income level was at or below 100% of the federal poverty level, even though the law does not require the facilities to offer no-cost care.

Glenn Melnick -- study co-author and health care finance professor at the University of Southern California -- said the findings suggest that 61%,or nearly four million, of California's uninsured residents had access to no-cost care.

Comparing Calif. Law to ACA

Melnick said the state law is more effective than the Affordable Care Act because it applies to all hospitals and mandates a cap on rates, while the ACA only requires that not-for-profit hospitals give discounts to people who qualify for financial assistance programs.

According to Melnick, "Many millions of Americans will remain exposed to the prospect of paying full billed charges, both during and after full implementation" of the ACA (Appleby, "Capsules," Kaiser Health News, 6/3). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.