Law caps hospital fees for uninsured

March 30, 2009 3:23:28 PM PDT
A new law in Illinois will protect uninsured patients from paying higher hospital rates than patients who have insurance. Uninsured patients are charged much higher rates for hospital services than insured patients, whose rates are negotiated by third party insurance companies, according to Attorney General Lisa Madigan. Often, an uninsured patient's obligation to pay sticker price leads to financial hardship and even bankruptcy, said Madigan.

"No longer how large those charges are, the actual amount that the uninsured population has historically paid has only been in the range of 5% to 10%.," said President Ken Robbins, Illinois Hospital Association.

Attorney General Lisa Madigan says she wants to level the playing field for patients. She announced the enactment of the Hospital Uninsured Patient Discount Act, a ground breaking law that will cap hospital bills and offer significant discounts for uninsured patients in Illinois.

"What this law will do is make medical care not just accessible, but make it affordable. Your home, your car, your pensions shall through this and the fair hospital billing practices, cannot be used as part of your assets," said Illinois Attorney General Lisa Madigan.

"They will not be able to take your home or pensions," said State Rep. Karen May, (D) Highland Park.

When the law goes into effect on April 1, hospital charges to the uninsured cannot exceed the costs of the services plus 35-percent. According to Madigan, on the average, hospitals charge uninsured patients rates that exceed 200-percent over cost.

The new law places an annual cap on the amount hospitals can collect, limiting the total amount to 25-percent of eligible patients' family income during a 12-month period.

"Medical care at hospitals for the uninsured is truly cost prohibiting at times and the reason about 50% of people in this country end up in bankruptcy," said Madigan.

Everyone is hoping that the new law will provide substantial relief to thousands of individuals seeking to pay their hospital bills.

Mercy Hospital is packed on a daily basis with patients. Patients ABC7 spoke with said they are looking forward to getting relief with their hospital bills with the new law.

"That's good for the people that don't have enough honey to be paying the bills and paying food," said Irma Gomez, Mercy Hospital patient

"Cap will help so many people, you know. Because we are in dire need of help," said George Johnson, Mercy Hospital patient.

Those eligible must fall within 600-percent of the federal poverty level, which is $132,300 for a family of four. At rural hospitals the discount will be available to uninsured patients with a family income not more 300-percent of the federal poverty level of $63,600 for a family of four.