Quick Answer: Oregon hospitals are pushing to triple the screening threshold for charity care eligibility — from $500 to $1,500 — through House Bill 4040. If passed, low-income patients with smaller hospital bills would no longer be automatically screened, forcing them to navigate the system alone to get care they may already qualify for free.
Oregon has some of the strongest medical debt protections in the country. Now hospitals want to weaken them — and lawmakers are listening.
A provision in House Bill 4040 would raise the threshold at which tax-exempt hospitals must automatically screen patients for charity care from $500 to $1,500 per visit. The change comes despite state data showing the current protections are working exactly as intended — bad debt is down, charity care spending is up, and hospital revenue keeps growing.
What’s at Stake
Since July 2024, Oregon has required tax-exempt hospitals to screen patients for charity care eligibility if they’re uninsured, enrolled in Medicaid, or owe more than $500 after insurance. The screening is automatic — patients don’t have to know the system or fill out paperwork to be considered.
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If the threshold triples to $1,500, patients with bills under that amount would have to seek out and apply for financial assistance on their own. That’s a problem when most people don’t even know charity care exists.
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Why This Matters: Eli Rushbanks, general counsel for medical debt relief group Dollar For, told Street Roots: “We have this extremely effective public health policy. And if we tweak it, it will only mean it’s less effective.”
The Numbers Show the Protections Are Working
According to state financial data reported by Street Roots:
- Oregon’s urban hospitals’ bad debt fell to $45.4 million in Q2 2025 — down more than half from early 2024
- Charity care spending nearly doubled, from roughly $100 million to $182 million
- Hospital patient revenue continued to grow steadily during the same period
But the picture isn’t uniform. Rural hospitals tell a different story — bad debt increased by more than $1 million to $4.3 million, and 14 of Oregon’s 37 rural hospitals ended 2024 with negative operating margins, with a combined $93 million net loss.
Why Hospitals Want the Change
The Hospital Association of Oregon says the screening requirement creates an administrative burden. Lobbyist Sean Kolmer told lawmakers that screening software from companies like Experian and Waystar has been “unexpectedly unreliable” in determining eligibility.
Hospitals also point to expected federal Medicaid cuts under the Trump administration. Oregon expects to lose more than $11 billion in federal Medicaid funding over the next five years. The state’s current two-year budget includes $27.4 billion for Medicaid, which covers about a third of Oregonians.
State Rep. Rob Nosse, a Portland Democrat who chairs the House Health Care Committee, said the bill is intended to make charity care more manageable, particularly for rural hospitals. “Things are going to get tougher,” Nosse told Street Roots.
Who Opposes the Change
A coalition of a dozen organizations — including AARP Oregon, the Oregon Health Equity Alliance, the American Cancer Society Cancer Action Network, and Blood Cancer United — submitted testimony opposing the threshold increase. They argue patients with high or unexpected medical expenses need a streamlined path to free or discounted care.
✓ Current Protections Working
- Bad debt down 50%+ at urban hospitals
- Charity care spending nearly doubled
- Hospital revenue still growing
- Low-income patients screened automatically
✗ What the Change Would Do
- Patients with bills under $1,500 no longer auto-screened
- Low-income patients must self-navigate charity care
- Many eligible patients likely won’t know to apply
- Could increase medical debt for vulnerable populations
The Medical Debt Problem in Oregon
Nearly a third of Oregonians have taken on medical debt within the last two years, according to a 2024 survey by the Oregon Values and Beliefs Center. Hospitals were an outsized contributor — 41% of those with medical debt said hospital bills were the main source.
More than half of Oregonians with medical debt owe less than $2,000, according to a state report on health care costs. About a quarter said the debt came from a diagnostic test like an X-ray or CAT scan. Another 12% said it was from emergency room care.
Important: Even if the threshold increases, patients with incomes up to 400% of the federal poverty level — $63,840 for an individual or $132,000 for a family of four — may still qualify for some financial assistance. You just have to know to ask for it. Hospitals are required to have financial assistance policies, but if you’re not automatically screened, you have to apply on your own.
What to Do If You Have Medical Debt
Whether you’re in Oregon or anywhere else, the same principles apply:
- Ask about charity care or financial assistance — every tax-exempt hospital is required to have a policy, and many patients qualify without knowing it
- Don’t ignore hospital bills — contact the billing department and ask about payment plans or discounts before the debt goes to collections
- Check your state’s protections — many states are strengthening medical debt protections, even as some face rollback pressure
- Medical debt under $500 no longer appears on credit reports — a 2023 change by the three major credit bureaus removed small medical debts
Need Help? If medical debt is part of a larger financial problem, take the free Find Your Path quiz to see which approach fits your situation — there are more options than most people realize.
Key Takeaways
- Oregon HB 4040 would triple the charity care screening threshold from $500 to $1,500 per hospital visit
- State data shows current protections cut urban hospital bad debt by more than half while charity care spending nearly doubled
- Rural hospitals face genuine financial strain — 14 of 37 ended 2024 with negative operating margins
- Without automatic screening, eligible low-income patients would have to navigate the system on their own
- Nearly a third of Oregonians have recent medical debt; more than half owe less than $2,000
- Every tax-exempt hospital must have a financial assistance policy — ask about it before a bill goes to collections
FAQ
What is Oregon House Bill 4040?
HB 4040 is a health care bill before Oregon lawmakers that includes a provision to raise the threshold for automatic charity care screening at tax-exempt hospitals from $500 to $1,500 per visit. This means patients with bills under $1,500 would no longer be automatically evaluated for free or discounted care.
Who qualifies for hospital charity care in Oregon?
Patients with incomes up to 400% of the federal poverty level may qualify for financial assistance at tax-exempt hospitals. That’s $63,840 per year for an individual or $132,000 for a family of four. Currently, hospitals must automatically screen patients who are uninsured, on Medicaid, or owe more than $500 after insurance.
Does medical debt still affect your credit score?
Medical debt under $500 no longer appears on credit reports as of 2023. Larger medical debts may still be reported, but only after being in collections for at least one year. The credit bureaus have been gradually reducing the impact of medical debt on credit reports.
How can I get help with hospital bills I can’t afford?
Contact the hospital’s billing department and ask about their financial assistance or charity care policy. Every tax-exempt hospital is federally required to have one. You can also contact organizations like Dollar For, which helps patients access charity care programs they may be eligible for.
Are other states rolling back medical debt protections too?
While some states face pressure to reduce protections, many are actually strengthening them. Several states have passed laws limiting medical debt collections, banning credit reporting of medical debt, and expanding charity care requirements. The trend varies widely by state.
Update (April 20, 2026): A JAMA study now confirms Oregon’s hospital debt law is working — 872-1,180 fewer people per county in medical collections. Here’s how to use the same 501(c)(3) rule at any nonprofit hospital.
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