Are you paying too much for healthcare? Medical debt protections are available for Maryland patients.
Medical debt can be crushing, especially for low-income patients.
A CBS News investigation reveals non-profit hospitals are collecting tens of millions of dollars in debt, despite getting more than $37 billion in tax breaks nationwide.
Most hospitals in Maryland are not-for-profit facilities, and the state has placed strong patient protections into law in recent years.
A bill that passed in the General Assembly during the recent session adds to those safeguards. It is currently awaiting Governor Wes Moore's signature.
Hospital tax breaks
A CBS News investigation showed that more than 50 non-profit hospitals in Maryland are getting $700 million annually in tax breaks in exchange for providing free or discounted care to low-income patients.
Some still collect medical debt from those patients.
Michele Gregory said she dealt with the problem firsthand almost 20 years ago and pushed to stop it.
"It was really difficult to suddenly have bill collectors trying to contact us when my husband is out of work and is re-learning how to read and write and talk again," Gregory told WJZ Investigates.
Gregory said her husband had a stroke, and even though they had insurance, the medical bills piled up.
"I don't want anybody to go through what we went through," Gregory said. "It was so stressful. It was terrifying. I thought we were going to lose our housing. I thought we were going to lose everything."
Gregory became a fierce patient advocate and ran for the Salisbury City Council, where she holds a seat today.
"I don't back down from a fight very easily," Gregory said.
Patient protections in Maryland
In the years since her ordeal, Maryland has passed patient protections for medical debt.
They include:
- No liens on homes
- No wage garnishment
- Payment plans cannot exceed 5 percent of income for low-income patients
"The fact that something that should be available to everybody as a fundamental right is actually making people financially destitute means we have to take some action," said Maryland Delegate Lorig Charkoudian. "We're not suggesting that no one should pay their hospital bills. We're talking about people who are struggling to pay their bills getting the financial assistance, we're talking about people struggling to pay their bills getting payment plans."
Charkoudian sponsored a bill that passed both chambers of the General Assembly this year and is awaiting the governor's signature.
The impact of the latest Maryland bill
- Creates minimum standards for discounted care
- Stops medical debt reporting to credit agencies
- Prohibits lawsuits for less than $500 in medical debt
- Changes the definition of medical debt to include co-payments and deductibles
- Gives patients 240 days after the receipt of the initial bill to apply for financial assistance
- Prohibits hospitals from charging more in fees than the initial bill and charging any interest on bills before a court judgment is obtained
Hospitals must also provide refunds for charges exceeding $25 that they have collected from patients later determined to be eligible for free care. The refunds must be provided within 240 days of the initial bill.
Under the legislation, if a hospital denies a patient free or reduced care and that patient appeals the denial, hospitals may not report debt to collection agencies until they have processed that appeal.
"The cost is massive to come and defend against a $500 debt that you already can't pay," Delegate Charkoudian said.
Charkoudian's bill also sets new standards for how hospitals notify people they are eligible for free or reduced-cost care.
"If you think about it, you go now and you sign 'I understand that if my insurance doesn't pay, I'm on the hook.' And we think you should also be saying, 'I understand what the hospital should pay and how I can access that,'" Charkoudian told WJZ. "It adds one more layer of making sure patients understand the financial assistance that is available."
According to the fiscal note, "The bill restricts the actions hospitals may take to recover medical debt owed by patients, which in turn increases uncompensated care, by a potentially significant amount, and hospital rates from which uncompensated care is funded. Hospital rates are paid by all payers in the state. As such, expenditures for health insurers, Medicaid and self-pay patients will increase. However, the amount of any such impact cannot be reliably estimated without knowing the total balance of medical debt owed by each patient in the State and the impact of the bill on each hospital's ability to collect such debt."
Many hospitals have stopped suing low-income patients altogether, including Johns Hopkins.
Recent tax filings reviewed by WJZ Investigates show they collected nothing from patients eligible for financial assistance.
"What we've found is some hospitals offer a lot of reduced costs, a much lower price, and others offer a much higher price and so actually depending on where you show up in the state, you may be paying a lot more or a lot less for the care that you receive," Charkoudian said.
Who is eligible for free and reduced-cost care?
The federal poverty level for a single person in 2025 is $15,650 annually.
In Maryland, non-profits are required to provide free medical care for those earning 200 percent of the poverty level or $31,300 a year.
Hospitals must provide reduced-cost care for patients earning up to 500% of the poverty level or $78,250 annually.
Charkoudian's bill lays out the income thresholds for getting reduced-cost care.
If a patient is eligible for reduced-cost medically necessary care, the hospital must, at a minimum, reduce the patient's out-of-pocket expenses for the regulated hospital service:
- 75% reduction for a patient with family income income of 201% to 250% of the Federal Poverty Level
- 70% for a patient with family income of more than 250% up to 300% of the Federal Poverty Level
- 50% for a patient with family income of more than 300% up to 350% of the federal poverty level
- 45% for a patient with family income of more than 350% up to 400% of the federal poverty level
- 40% for a patient with family income of more than 400% up to 450% of the federal poverty level
- 35% for a patient with family income of more than 450% up to 500% of the federal poverty level.
Attorney General provides assistance
People who believe they are not getting the free or discounted care they are entitled to receive may reach out to the attorney general's office, which helps mediate disputes.
"We got a lot of complaints from consumers who have applied for hospital financial assistance and then never heard back, or have applied and have been denied and they don't think it's appropriate," said Kim Cammarata.
She is the director of the Health Education and Advocacy Unit in the Consumer Protection Division of the Maryland Attorney General's Office.
"We recently assisted a patient who was unfortunately diagnosed with cancer and facing a bill of over $100,000. And he was a fairly low-income individual, so he's got this huge bill facing him. He's in the middle of cancer treatment, and he's just at his wits' end," she said.
Cammarata said payment plans must be capped at 5% of a person's annual income.
She said in that case the hospital offered some help, "And even with that, the hospital was attempting to have him pay $1,400 a month, which he could ill afford because he was really no longer working because of his cancer treatment and certainly didn't comply with the 5% plan."
"We get a lot of complaints from consumers who have applied for hospital financial assistance and then never heard back or have applied and have been denied, and they don't think it's appropriate," Cammarata said. "If they feel like they need reduced-cost care or no-cost care or a payment plan, they should just go ahead and reach out to us. That's what we're here to do."
You can contact her unit here:
- Hotline Mon-Fri 10am-2pm 410-528-1840
- En español 410-230-1712
- Toll free: 1-877-261-8807
- Email heau@oag.state.md.us
Non-profit helps with medical debt
Some non-profits can assist patients struggling with medical debt.
Jared Walker founded "Dollar For."
You just input information about your medical debt, and his organization will work to get it reduced.
It is all free of charge at this link.
"If you are within a certain income range, the hospitals are actually legally required to write off or reduce the bills that you have," Walker told WJZ Investigator Mike Hellgren. "A lot of people just don't know this, and hospitals do a terrible, terrible job of telling people about it. So, we have millions and millions of people who go on payment plans or declare bankruptcy for bills that they don't have to pay."
Walker said he started the organization after watching his family struggle with medical debt.
"I think a medical crisis should not mean a financial crisis," Walker said. "We have had hundreds of patients tell us about how they weren't able to pay rent. They weren't able to put food on the table. They had to drop out of school. They weren't able to make their car payment, like all of the downstream impacts of this are devastating. It makes sense that it's the number one cause of bankruptcy in America."
