Fair Pricing Law Prompts Most California Hospitals to Adopt Policies to Protect Uninsured Patients from High Charges

Published In: Health Affairs, v. 32, no. 6, June 2013, p. 1101-1108

Posted on RAND.org on June 01, 2013

by Glenn Melnick, Katya Fonkych

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Research Question

  1. Is California's “fair pricing” legislation of 2006 protecting uninsured patients from paying all billed hospital charges?

Millions of uninsured Americans rely on hospital emergency departments (EDs) for medical care. Throughout the United States, uninsured patients treated in or admitted to the hospital through the ED receive hospital bills based on what hospitals call "billed charges." These charges are much higher than those paid by insured patients. In 2006 California approved "fair pricing" legislation to protect uninsured patients from having to pay full billed charges. We found that by 2011 most California hospitals had responded to the law by adopting financial assistance policies to make care more affordable for the state's 6.8 million uninsured people. Ninety-seven percent of California hospitals reported that they offered free care to uninsured patients with incomes at or below 100 percent of the federal poverty level. California's approach offers a promising policy option to other states seeking to protect the uninsured from receiving bills based on full billed charges.

Key Findings

  • By 2011, most CA hospitals had adopted financial assistance policies to provide more affordable care for the uninsured.
  • Ninety-seven percent of hospitals say they offer free care to uninsured patients with incomes at or below the federal poverty level.

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