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

This article summarizes California’s Hospital Fair Pricing Act, which was passed in 2006 with the intent of protecting low-income uninsured patients from having to pay hospitals’ full billed 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. These researchers 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.