Uncompensated Care

Uncompensated care refers to health care services that hospitals and other providers deliver but are not paid for because the patient has no insurance, cannot afford to pay, or because public programs do not fully cover the cost of care.

Uncompensated care generally includes two main categories:

• Charity care: Services provided for free or at reduced cost to patients who meet a hospital’s financial assistance guidelines.
• Bad debt: Bills that hospitals expect to be paid but ultimately are not, often because patients are uninsured or underinsured and cannot afford the full charge.

Under a federal law called the Emergency Medical Treatment & Labor Act (EMTALA), hospitals are required to provide emergency care regardless of a patient’s ability to pay. That means uninsured people can still receive life-saving treatment — but hospitals may never be reimbursed. Those unpaid costs become uncompensated care.

Uncompensated care is not evenly distributed — rural hospitals and those serving large numbers of low-income or uninsured patients tend to carry a much higher share of these costs. This can strain hospital finances.

Policy decisions that increase the number of uninsured people — such as restricting Medicaid eligibility, adding work requirements, or reducing marketplace subsidies — typically lead to higher uncompensated care. This puts additional pressure on hospitals and increases the risk of service cuts or closures in rural and underserved communities.