Hidden Help: A New Push for Hospitals to Prevent Medical Debt

Dan Gorenstein (DG): Becca Wahl was standing in a checkout at Walmart in Houston last October when she started to feel off. 

Becca Wahl (BW): I was out shopping for a birthday card and all of a sudden I kind of got dizzy. Next thing you know, I was waking up on the floor and people were praying over me. 

DG: Nothing like this had ever happened to Becca.

The 33-year old eats right. Teaches yoga. She’s healthy.

An ambulance rushed her to a nearby emergency room. Becca had hit her head hard. Doctors feared internal bleeding. A deeply religious person, Becca prayed. 

BW: That I would pull through, that I wouldn’t die at this, at this hospital.

DG: A second fear gripped Becca that night. Every time a doctor ordered a scan for her back, her head, her heart, she thought about money.

It got to a point where she said something to a nurse. 

BW: I know that this is thousands of dollars, and I’m telling you that I have no game plan on how to pay this. 

DG: Becca is uninsured. Given her health, getting coverage feels like an extravagance. In a good year, she makes $30,000 as a yoga instructor. 

Doctors diagnosed her with a concussion, told her to go home, rest.

Easy enough to say, harder to do as Becca braced herself for her bill.

BW: I was terrified to look at it. I had no gauge of like, what it was gonna be.

DG: A few days later the hospital texted her a $38,000 bill. 

BW: I just went out to get a birthday card and fell over. And now I have $38,000 of debt.

DG: This bill, that eye-popping number, Becca’s panic, they’re at the heart of a problem that has stumped policymakers for years:

Patients shoulder debt they never should face in the first place.

I’m Dan Gorenstein and this is “Hidden Help,” a special investigative series from Tradeoffs and KFF Health News about how hospitals can protect their patients from the pernicious harms of medical debt.

Melanie Evans (ME): And I’m Tradeoffs reporter Melanie Evans. 

An estimated 100 million adults in the U.S. have healthcare debt, much of it from hospital bills.

Most hospitals offer discounted and free services known as “charity care,” but they have long made it hard for patients to get this help. 

People usually must complete complicated applications, turn over stacks of paperwork, if they even know the help exists. 

BW: I just thought you had a bill and you had to pay it.

ME: I worked on a story when I was at the Wall St. Journal that found hospital systems tried to collect $2 billion, in just a single year, from people who likely qualified for financial assistance.

DG: These billing practices, especially when they come from nonprofit hospitals, hospitals that are, basically, charities, have infuriated some policymakers. 

Tom Oliverson (TO): This is clearly an unjust, horrible thing.

DG: Nonprofits make up about half of the nation’s hospitals and they get huge tax breaks. 

One estimate found that in 2020, nonprofit hospitals nationally saved $24 billion by avoiding state and federal taxes. 

ME: More and more, lawmakers across the political spectrum want hospitals to make it easier for people to get help.

And there’s growing consensus on a solution: have patients skip the applications and automatically discount or wipe out their bills from the jump. 

DG: We’ve spent the last year digging into hospitals’ financial assistance policies.

Over the next two shows, we’ll look at how hard hospitals can make it to get charity care and explore what it would mean if this help became less hidden.

From the studio at the Leonard Davis Institute at the University of Pennsylvania, This is Tradeoffs.

*****

DG: Melanie, you came to me about a year ago and said you wanted to really dig into this idea of hospitals automatically enrolling patients for financial aid.

And I was thrilled, except for the technical name of the policy.

ME: Presumptive eligibility. That’s the jargony, industry-speak name for what is effectively auto-enrollment. 

DG: Presumptive eligibility. I’ve said it once. That’s enough.

ME: It’s a terrible name, but a super interesting concept. I’ve honestly been a bit obsessed with it ever since I first learned about it when I was working at the Wall Street Journal. 

DG: Why were you so obsessed? 

ME: Because I learned hospitals had the power to auto-enroll low-income patients, but those people were still getting billed.

When that happens, some folks will borrow money, or they’ll work out a payment plan. But a lot of people end up in debt, their credit is ruined, collectors at the door.

And most concerning, Dan, some of those people stop seeking care as a way to avoid more medical bills.

DG: Hospitals get the risks, the medical and the financial. 

That’s why many offer some kind of charity care in the first place. 

But hospitals often offer that help at a point after the patient has gotten a terrifying bill and they’re recovering from some serious medical issue.

Like with Becca Wahl.

BW: I remember going to sleep and telling my cousin, who’s my number one in my life hey, I love you. If anything happens, like, thanks for everything, you’re the best. Because I was afraid I wasn’t going to wake up. 

ME: That’s a vulnerable moment for people, Dan, and that’s one reason why there’s some genuine excitement that auto-enrollment – this new-ish potential fix – could help people avoid getting hit with massive bills they don’t actually owe. 

But it turns out how hospitals use presumptive eligibility…

DG: Stop.

ME: Sorry, auto-enrollment, really matters.

Stanford health economist Neale Mahoney has spent the last 20 years studying how to keep consumers out of medical debt.

Neale Mahoney (NM): The current system is broken. It’s like going through a tax audit. And we’re putting people through all of that to get the the financial relief that like is sort of obvious that they deserve. And we can short circuit all of that and identify the people who have no ability to pay provide them auto enrollment in those programs up front.

ME: Final reason I’m fixated on this, Dan, is in the last few years, it’s really caught on with state lawmakers.

Oregon, California, North Carolina, Delaware, they all recently adopted new requirements for hospitals to auto-enroll.

And that raises some big questions. What are states up to? Are patients getting any help? And are hospitals taking a financial hit?

DG: Questions you’ve been asking for the last year. So, Melanie, let’s set the table for folks.

ME: Sure. Roughly 90% of nonprofit hospitals nationwide say they auto-enroll patients in financial assistance. That’s about 2,500 hospitals. 

There are very few federal or state regulations on this … so the vast majority of those hospitals get to decide when, how and who they will auto-enroll for help.

But uffda, Dan. There is no standard reporting. No data to examine. 

If I wanted to get my head around how hospitals are using this policy right now, we needed to build our own dataset. 

DG: Which is exactly what you did. 

ME: Yes. We did.

DG: And we decided to look into Texas hospitals. 

ME: We did. That’s because a lot of people in Texas have medical debt, higher than the national average.

And lawmakers there are actively debating whether hospitals should be forced to auto-enroll some patients before sending a bill.  

So I scoured hospital websites, filed records requests with the state. I got some help from a nonprofit called Dollar For that tracks these policies and followed it up with some number crunching. 

DG: We’ve pulled together auto-enrollment policies for 166 nonprofit hospitals in the Lone Star State, that’s all of them except specialty hospitals.

We focused on nonprofits because of those big tax breaks and policymakers’ keen interest in making sure the hospitals are giving back. 

This analysis, Melanie, provides us with the first-ever clear picture of how and when hospitals are auto-enrolling patients. 

So, I want to ask you, what’s the key finding?

ME: It’s when these hospitals are choosing to screen people for financial aid. 

And Dan, what we found is just one hospital system, Memorial Hermann, with 13 hospitals, say they screen patients before they send a bill.

DG: Okay, just this one health system says it screens before they send patients a bill. What about all the other hospitals? 

ME: Well, it’s split into two groups about the same size, Dan. 

You’ve got nearly half of Texas nonprofits that say they bill patients before screening for help. 

DG: Okay.

ME: And then the rest, we have no idea. Their policies are silent. That said, hospitals’ practices can be different from what’s on paper. I talked to a few that screen first, but that’s nowhere in their policies. 

And, look, when people get that help, if they get that help, really matters.

Stanford’s Neale Mahoney found patients who receive aid quickly are more likely to one, return to the doctor, and two, get treatment for conditions like diabetes and depression. 

NM: People are in a critical window right after a health event where there’s a lot of follow up care they need. If they have medical debt hanging over their head, they’re scared of going back to the doctor and getting confronted about what they owe. They’re scared of going to the pharmacy. 

ME: In another study Neale did back in 2024, forgiving debt years later had no benefit to people’s health. 

Despite this evidence, there’s no federal law that says when hospitals need to screen patients for auto-enrollment, if at all. 

Here’s what nonprofits are legally required to do: try to find patients who qualify before taking extraordinary actions – like garnishing patients’ wages or denying further care. 

DG: Aggressive moves. 

ME: They are. And in Texas, about one-quarter of hospitals have policies that say they must screen before taking these aggressive actions.

DG: So this may be how those hospitals are complying with the law, they’re doing it when it suits their needs, not their patients.

But Melanie, help me out, here. Why charge people who basically can’t pay? Like what’s the point?

ME: None of the hospitals I contacted for an interview agreed to talk. But I spoke with the Texas Hospital Association, Dan. And I asked the same question. 

Anna Stelter (AS): Charity care is, is the relief of last resort.

ME: That’s Anna Stelter, the association’s vice president of policy.

Anna told me hospitals want to make sure they get paid whenever possible, and that means holding off on financial assistance while they track down other options. 

Maybe they get a patient onto Medicaid. Or maybe there’s a local safety net program that can help. 

It can take time to figure that out, lots of back and forth. 

AS: It’s not always like simple and straightforward as you might imagine. People that come into the hospital are frequently not in straightforward situations.

ME: And in the meantime, patients get bills. 

DG: Ok so the headline is nearly half of nonprofit hospitals in Texas send bills first and screen later.

What else did you find?

ME: A lot, Dan. More than we have time to go through here.

You can find all of it on our website, though tradeoffs.org/hiddenhelp, along with charts, a full list of the Texas hospitals and our analysis of their policies. 

There is one more finding I’d like to highlight, if that’s okay, and this one that really shocks people.

DG: Okay, I’m ready. Go on.

ME: Yeah. So a lot of times, people try to chip away at their big bills — a few hundred bucks here, maybe a thousand bucks there. 

About two-thirds of Texas nonprofit hospitals say they will not refund any money a patient has already paid, even if they eventually auto-enroll you for free care. 

DG: So if I go into one of these hospitals, I walk out with a bill, pay some of it off, and then when the hospital tells me I qualify for free care, I don’t get that money back?

ME: You got it. I talked with Aimee Carlock who went to a hospital with no requirement to screen patients for help up front.

Amiee cleans houses for a living. She’s uninsured. She needed surgery to stop severe bleeding from fibroids. 

But to schedule it, Texas Health Resources required her to first pay some of the cost: $5,500. 

Aimee Carlock (AC): I panicked because I live paycheck to paycheck. I have no extra money whatsoever. 

ME: Aimee’s grandfather had recently passed away and her dad offered her some of the money he inherited. 

She also borrowed from her mom and a friend. 

AC: I don’t like to ask for money. It’s very uncomfortable for me. 

ME: After the surgery, Aimee got the rest of the bill. It was more than $16,000. 

The nonprofit Dollar For, the same one that shared some of its data with us for this story, helped Aimee apply for financial assistance. 

It turned out she qualified to have her entire bill wiped out. 

ME: Immediately, she was off the hook for the $16 grand. But that $5,500, that’s gone.

Soon after she needed another surgery, this time a hysterectomy. 

It’s been tough, financially and emotionally.

AC: I never thought I would be in this position. And just the fact that, like, I can’t have kids and all that, it’s just very overwhelming. And I’m just trying to pick myself back up. But it’s really hard. 

ME: She recently got approved for food stamps. She’s behind on bills. She could use that $5,500. 

I reached out to Texas Health. They didn’t respond to questions about Aimee’s bill, though she said it was okay to talk about her case.

DG: And Melanie, what’s hospitals’ rationale, in general, for keeping what patients pay if they’ve qualified for help?

ME: Hospitals will tell you they are just following federal tax law. For patients who complete an application, they are sometimes required to refund money.

The way the IRS wrote this up, Dan, hospitals do not have to refund patients who get help automatically. That’s the current regulation.

The only thing they have to do is what’s in their policies. 

DG: Let’s recap. There are three big points I’ve taken away, Melanie.

One, research tells us the sooner patients get their medical debt cleared, the better it is for their health.

Two, fewer than one in 10 Texas nonprofits say they screen and automatically wipe out bills before asking patients to pay.

And three, more than two-thirds say they refuse to refund money patients have already paid toward their bill. Two-thirds.

ME: That’s right, Dan. 

DG: When we come back, a Texas lawmaker who wants to force hospitals to make their help less hidden, how that solution could potentially backfire, Becca handles her $38,000 bill. 

BREAK

DG: Welcome back. 

We’ve spent the last year digging into an idea that could protect a lot of people from medical debt: have hospitals automatically screen and wipe out bills for their low-income patients. A process wonks call ‘presumptive eligibility’ or ‘auto-enrollment.’

Before the break, Melanie told us that among nonprofit Texas hospitals less than one out of 10 say they use this practice before sending a bill.

Melanie, this is the first look at when, how and who hospitals will auto-enroll for help. 

After you ran the numbers you shared your findings with some of the nation’s leading experts on high health care costs. What jumped out to them about your results? 

ME: The main thing I heard, Dan, is that this data makes it clear: Hospitals can definitely be doing more to protect patients from medical debt.

Earlier, we talked about timing, that patients benefit from early and easy access to help, which we found often isn’t happening. 

One of the people I spoke with is Erin Fuse Brown, a health policy professor at Brown University.

She told me it was striking how radically different a patient could be treated depending on the hospital. 

Erin Fuse Brown (EB): The patient’s not going to know what their rights are at any given hospital. And it may vary so much from place to place. So I think that that’s where regulation can step in and say, this is going to be the standard and the expectation for all hospitals, and that would provide a lot more clarity. And it would actually provide better protection for patients as well.

ME: She also pointed out our findings that highlight how patients can be worse off, like when hospitals fail to notify patients their bill has been wiped out.

EB: If the patient doesn’t get some sort of notice, I think that uncertainty like hangs, you know, like a sword over their neck.

ME: Finally, she called out the refund policies, and the fact that in some cases, patients who had a bill wiped out must still fill out an application to get money back. 

EB: This is one of those things called like an inconvenience tax, right? It’s not that you’re not owed the money, but you have to go through the process of knowing your rights, filing the request for the refund in order to receive it, even though it is sort of you didn’t have to pay the bill in the first place.

DG: Research shows that Texas has one of the country’s highest rates of medical debt, and that’s part of why we looked at the state.

ME: Yes. And because of this guy. 

Tom Oliverson (TO): My name is Tom Oliverson. I’m an anesthesiologist. I’m also a state representative for Texas’s 130th state House district. 

ME: Tom introduced a bill last year, Dan, that would have required nonprofit hospitals to screen patients and waive payment for eligible patients before they ever send a bill. 

Hospitals that fall short would first get a public warning, then a fine, and then risk losing their tax breaks. 

DG: And we know from your work that just a small minority of nonprofits say they meet that standard. 

Sounds like a lawmaker who has set his sights on these hospitals, Melanie. 

ME: Tom’s serious about this. 

When he first heard about all the people who get bills instead of help, he was in. 

TO: Right then and there. It was instant, I was just like, you know, let me at them.

ME: He was incensed that someone like Becca Wahl would have to go through the agony of opening up a $38,000 bill while recovering from a concussion.

TO: The idea of just destroying somebody emotionally by sending them a statement for a $38,000 bill, which, you know they’re not going to end up paying anyway. That’s absurd.

ME: Beyond that, Tom is really interested in those tax breaks we talked about. 

DG: The ones nonprofit hospitals get because, legally, they are charities, even if some of them are also multi-state, multi-billion dollar organizations. 

ME: That’s Tom’s point. He believes big, wealthy nonprofit health systems should do more to earn their tax breaks.

TO: If you’re sending bills to people that, you know when you finally get around to screening them for charity, they’re not going to be obligated to pay, that should be grounds for losing your tax exempt status.

ME: Ultimately, the hospitals helped kill what they described as a “bad bill.”

Anna Stelter from the Texas Hospital Association told me hospitals had a couple of reasons they fought it. 

First, hospitals need data to screen patients and figure out who should get help, but Anna says what’s available isn’t always reliable. 

AS: That data is not always up to date. That data is not always perfect. There’s lags with that data.

ME: Remember, Dan, the legislation penalizes hospitals if they send bills to patients who qualify for auto-enrollment. 

Given the quality of the data, Anna says that provision was too punitive. 

And the other reason hospitals pushed back: they’re worried about health insurers. 

In response to this legislation, it’s possible companies could hike up patient deductibles – what people pay before their coverage kicks in, knowing hospitals would now have to pick up the tab. 

DG: I see. Insurers are off the hook. Patients are off the hook. Hospitals pay. 

ME: That’s right. When you boil it all down, a lot of the opposition from hospitals comes down to money.

But Anna says hospitals’ big financial stress, it’s not this bill, it’s this moment.  

Texas hospitals, like hospitals across the country, are seeing more uninsured patients after federal subsidies to help consumers buy Obamacare plans got smaller.

The state also fought with the Trump administration over Medicaid, which really shook hospitals. 

With this uncertainty and these higher costs, Anna says it’s impossible for hospitals to thrive. 

AS: No one can be shocked when hospitals put their hands up and say, we need help, and this is not sustainable.

DG: I know hospitals often talk about their bleak financial outlooks, Melanie, but 2026 does seem more acute than most.

Given all the changes to Medicaid passed in the Big Beautiful Bill, the uninsured rate is expected to soar, and hospitals are expected to bleed money. 

ME: Right, all this leaves hospitals to pick up even more of the safety-net slack.

That could be a huge problem, says Northwestern’s Jill Horowitz, who studies nonprofit hospitals. 

Jill Horwitz (JH): It would be wonderful if nonprofit hospitals could solve the problem of Americans being uninsured or underinsured by paying for the free care. But nonprofit hospitals do not have the money to solve what is ultimately a major federal problem.

ME: Jill takes issue with the policymakers who focus only on nonprofits.

JH: If what we want to do is make health care accessible, I’d be a lot more comfortable if we had a level playing field that required all hospitals to provide these services than to single out the non-profit hospitals.

DG: To Jill’s point – what about for-profit hospitals, Melanie? Did you learn anything about their policies?

ME: We tried. 

But it’s up to these companies – owned by investors and shareholders – whether to disclose anything and long story, short, I didn’t learn enough to say something definitive. 

So what we do know comes from prior research. And on average, for-profits offer similar levels of charity care to the nonprofits. They just don’t get those big tax breaks.

DG: Got it. So, I’m curious, how do these arguments – the data is bad, it’s a tough time for hospitals – land with Tom Oliverson?

ME: Honestly, they don’t.

TO: You are getting, tens of millions, if not hundreds of millions of dollars in tax exemptions every single year. If you’re advertising that you’re willing to accept uninsured patients and that you have a charity program, you got to deliver on that.

ME: Tom’s so convinced, that this summer he brought the proposal to a group of lawmakers from other states. They adopted it as a model to bring back to their own legislatures. 

He plans to reintroduce his bill when the statehouse reconvenes this January. 

Dan, I ran our findings past Tom. He was shocked by how few hospitals actually screen before they bill.

TO: This is clearly an industry that is not policing itself very well. It is clear to me that there is an absolute need for legislative reform.

DG: Tom continues to push this bill because of what happens to people like Becca Wahl in Houston. 

A few days after Becca got hit with her $38,000 bill to treat her concussion, the hospital, Memorial Herman, reached out.

They dropped her bill to $11,000, said she could do a payment plan, $1,000 a month. 

Better, but still out of reach. 

BW: They just slapped this thousand dollar a month plan in front of me. And I’m looking at it like, oh, didn’t we just have this conversation about my finances?

DG: Becca felt like she had run out of options. She was too scared to negotiate a lower payment, unsure that was even possible.

Her only hope was trying to get help somewhere else. 

Becca remembered hearing about a group that supported people with medical debt.

She Googled around and eventually found Dollar For.

And they helped her submit her application for financial aid to Memorial Hermann last November.

Her expectations were low.

BW: I just put in the application and prayed and then I’ll be damned, it was the hospital that was like, oh, we have another determination letter available for you.

DG: It had just been about a week. Becca, icing her head with a bag of peas, opened the message. 

BW: It was written in this crazy medical legalese. And so I actually had to upload this letter into Chat GPT which I do not use regularly. And I said, can you tell me what this letter is telling me? And they were like, it looks like your entire balance has been forgiven.

DG: But Becca still couldn’t quite believe what she was seeing.

BW: It did not hit me that it had truly happened until I logged into that same patient portal and went to billing and looked at my account balance and it said 0.00. 

And that’s when I really, really like my ears were ringing and I felt like I had pulled this miracle out of nowhere.

ME: Dan, I’d like to put Becca’s story into a little context. 

Becca was lucky. 

So many people with medical debt face it alone, without the help of a group like Dollar For.

Then there’s this: the hospital where she just happened to get her care, Memorial Hermann, has a policy that says patients should be auto-enrolled before they receive a bill. 

As we talked about earlier, it’s the only system with this requirement. 

DG: But Becca did get a bill first. What happened?

ME: We don’t know.

Memorial Herman declined to talk about her case even though she gave permission.

A spokesperson did tell us that Memorial Herman is dedicated to making sure patients have clear information about their financial aid program.

For Becca, though, what mattered most is that bill was gone.

BW: I probably would have spent many, many years trying to pay that off and feeling that financial burden for a long time. 

DG: Here’s what Becca says can happen now, instead.

Her car has 170,000 miles. She can trade it in for something more reliable. 

She can take another training class, a step towards opening up her own yoga studio.

Whatever Becca chooses – or doesn’t – she will do, without debt. 

Melanie, thanks so much for your reporting on Part 1 of Hidden Help.

ME: You’re welcome, Dan.

DG: Next week, Part 2, we go from Texas to Oregon, where lawmakers already force hospitals to screen patients like Becca for help before sending them bills.

And it’s making a difference.

Lawrence Furnstahl: Now that we’re screening everyone, 64% of our patients are eligible for some form of assistance. And this is, frankly, much more than we had anticipated. 

DG: We’ll dig into how Oregon’s law is helping patients, stressing hospitals, and the lessons a tuberculosis doctor in Los Angeles has for preventing medical debt.

To see more of Melanie’s analysis of Texas nonprofit hospitals, go to our website tradeoffs.org/hiddenhelp.

I’m Dan Gorenstein, this is Tradeoffs.