Oregon's automatic hospital aid doubles spending, but bills are rising for insurers

Oregon patients now face fewer financial hurdles when receiving hospital care. State law enacted in July 2024 mandates that hospitals automatically screen patients and grant financial aid to those who qualify, eliminating the need for most individuals to submit applications. This approach, known as presumptive eligibility, marks a departure from the traditional model where patients had to actively seek help.

Financial reports from roughly two-thirds of Oregon's hospitals show that spending on financial assistance more than doubled during the first full fiscal year under the new rules. Oregon Health & Science University, a major provider, reported that 64% of its patients automatically qualified for aid in the early months following the law's passage. This figure was a substantial increase from the 12% qualification rate previously observed at the institution.

The change has provided direct relief to patients, including those with private insurance. OHSU spent approximately $39 million assisting insured patients in the first year, a figure about five times higher than in prior years. Lawrence Furnstahl, the university's chief financial officer, noted that insured patients previously often paid their bills out of pocket rather than applying for aid. The automatic screening process has reduced or eliminated these costs, including large deductibles that patients must cover before insurance benefits activate.

Hospital leaders acknowledge the increased costs. Sean Kolmer, an executive vice president for the Hospital Association of Oregon, stated that the state's uninsured rate is expected to rise to 10% or higher in coming years. This projection is up from about 3% before the screening law took effect. Kolmer described the financial environment as a very different world for providers. OHSU spent about $64 million on free and discounted care in its first year under the law, which represented roughly 1% of its operating expenses.

Lawmakers responded to hospital concerns about financial strain by adjusting the screening thresholds in April. The revised law raised the monetary trigger for mandatory screening on a single visit from $500 to $1,500. The requirement to screen all Medicaid and uninsured patients remains in place. Rob Nosse, a Democratic state representative who chairs the healthcare committee in the Oregon House, supported the adjustment to prevent rural and suburban hospitals from closing. He expressed concern that making healthcare more expensive for patients would help hospitals stay in business.

Other states are observing Oregon's results as they consider similar policies. North Carolina expanded its screening requirements this year to include patients with incomes up to triple the poverty line. California and Delaware have enacted rules requiring hospitals to automatically grant financial aid by July 2027. These moves follow a national trend where policymakers seek to make hospital financial assistance easier to access. As many as 100 million adults in the United States currently hold healthcare debt, a burden that often leads to skipped prescriptions and delayed follow-up care.