Minnesota hospitals give far less charity care than others across the U.S.

Cori Roberts was living in a basement apartment when she was diagnosed with early-stage cervical cancer four years ago. The 40-something former stay-at-home mother had just started working again, earning $41,000 a year in a human resources job. Even with insurance, the hospital bills reached more than $8,000.

Roberts asked CentraCare, the nonprofit health system that treated her in St. Cloud, Minnesota, for help paying her bills. Under state and federal law, nonprofits get millions in tax breaks in exchange for providing charity care to patients who cannot afford treatment. CentraCare told her she earned too much to qualify, according to Roberts.

Roberts cut back on groceries and Christmas gifts for her children and paid down more than $6,000 of the debt over two years. Then CentraCare sued her last year for the remaining balance. "They're supposed to be a nonprofit," Roberts said. "It's like, 'Come on!'"

Roberts's experience is far from unique in Minnesota. A Minnesota Star Tribune-KFF Health News investigation found that Minnesota hospitals are among the least charitable in the nation. Hospitals in the state provide less financial aid as a share of their operating budgets on average than hospitals in almost every other state, including Illinois, Iowa, Nevada, and Texas.

Nationally, hospitals spend an average of about 2.4 percent of their operating budgets on charity care, according to federal data compiled by researcher Hossein Zare at Johns Hopkins University. Minnesota hospitals spend about one-third of that on average. Of the state's 123 general hospitals, 62 devoted less than 0.5 percent of their operating budgets to charity care between 2020 and 2024.

CentraCare's flagship St. Cloud Hospital spent less than 0.25 percent of its operating budget on charity care. That equals roughly $25 in patient aid for every $10,000 the hospital spent to operate. CentraCare declined to discuss the details of Roberts's case or its charity care spending.

The timing of these findings is urgent. Minnesota's uninsured rate shot up last year, reaching its highest level since 2017, and experts predict it will rise further as proposed federal budget cuts force states to reduce Medicaid coverage. Even people with health insurance increasingly cannot pay their medical bills due to rising copays and deductibles.

"The system is not working," said Erin Hartung, director of legal services at Cancer Legal Care, a Minnesota nonprofit that helps patients with medical debt. "And the burden is falling hardest on the people who are least able to bear it."

Hospital leaders argue they cannot shoulder the entire burden of an affordability crisis. "No amount of charity care from hospitals will ever fully meet the needs of uninsured or underinsured Minnesotans. The need is simply too great," said Tim Nelson, a spokesperson for the Minnesota Hospital Association, in a statement.

Minnesota hospitals say many face tight finances and steep costs for labor and supplies. But state Attorney General Keith Ellison disagrees. "There is a benefit you get from being a nonprofit hospital in the state of Minnesota," he said. "But do the people get the benefit?"

Some Minnesota hospitals give financial help to fewer than two dozen patients per year. Mahnomen Health Center, which now serves as a rural emergency center, provided no charity care over eight years, even though it serves one of Minnesota's poorest regions. Other hospitals serving large low-income populations ranked among those giving the least charity care, the investigation found.

Several factors explain why Minnesota hospitals spend so little on financial aid. The state has broad job-based insurance and an expanded Medicaid program, so fewer people are uninsured compared to other states. Hospitals in states with higher uninsured rates typically spend more on charity care.

But Minnesota patients also face steep barriers to getting aid. Many hospitals require patients to submit extensive personal information, including bank statements, retirement account details, mortgage documents, and estimates of assets such as cars, homes, or livestock. Some ask applicants to describe their monthly spending on food, utilities, and other medical bills.

Minnesota has not set standard rules for charity care across hospitals, so eligibility varies dramatically. Some hospitals give free care to patients earning up to $47,000 a year, while others cap it at about $15,000. Patients might qualify at one hospital but be rejected at another just miles away.

Had Roberts driven 30 miles east to Princeton or 35 miles north to Little Falls, she would have found hospitals with more generous financial aid policies than CentraCare. But she did not know those options existed.

Roberts eventually took out a loan against her retirement plan to clear the medical debt and make the lawsuit go away. Now 49, she is remarried and living in a home decorated with inspirational plaques. "It just feels very unfair," she said.

Hospitals point to other ways they serve their communities. They train doctors and nurses, they keep money-losing services like obstetrics and mental health care open, and they help patients enroll in insurance programs. "This helps provide broader, longer-term protection for patients," said CentraCare spokesperson Karna Fronden in a statement.

Still, the financial stakes are real. Minnesota hospitals collectively write off about $200 million each year as bad debt after failing to collect unpaid bills from patients. By comparison, they devote about $163 million annually to charity care. In 2024, hospitals collectively posted $2.4 billion in net income.

Some hospitals are genuinely struggling. Thirty-one have lost money on operations in four of the past eight years. HCMC in Minneapolis, the state's largest safety net hospital and the one providing the most charity care, is losing so much money that without additional taxpayer support it could close.

Larger health systems such as Mayo Clinic, Essentia Health, and Sanford Health have remained financially strong. Operating margins at most CentraCare hospitals exceeded 10 percent in 2024, state data shows.

Medical debt wreaks havoc on patients' lives. Nationwide, an estimated 100 million people carry health care debt, much of it from hospitals, according to studies. The burden increases stress and can lead to premature deaths.

Abby Kelley-Hands, a special education coordinator in St. Paul, has a rare immune condition that causes severe allergic reactions. A Mayo Clinic doctor prescribed a costly drug to control her illness. When she briefly lost health coverage in 2021 due to an insurance error, she received more than $20,000 in bills from Mayo.

Although Kelley-Hands and her husband earned less than $100,000 per year, Mayo denied her request for financial assistance, saying she earned too much. "I was in tears," she said. "It was so scary and so hard. And it causes all of this additional stress, which then makes you sicker and less able to even figure things out."

The couple sold a car and agreed to a $6,500 monthly payment plan before Mayo would continue her treatment. Kelley-Hands's husband now bikes 5 miles to work. They have no dishwasher. They took a honeymoon seven years after their wedding. "We live very simply," she said.

In 2024, state lawmakers banned hospitals from denying care to patients with unpaid bills. That same year, Attorney General Ellison investigated Mayo and found the multibillion-dollar institution was systematically discouraging patients from applying for financial aid. Mayo agreed to overhaul its charity care program. After the investigation, Mayo's charity care spending nearly doubled, reaching 1.5 percent of operating expenses in 2024.

Hospitals are required by a 2023 state law to post their financial aid policies online. Yet many made the information difficult to find, posting it only after being contacted by news organizations. Charity care information was often harder to locate than information on how to pay bills.

"Hospitals have optimized to get payment," said Jared Walker, founder of Dollar For, a nonprofit helping patients apply for charity care nationally. "If you want to get on a payment plan, if you want to get on a credit card, it's so easy."

Patients frequently said nobody told them about charity care. Joe Robling, 29, was treated at St. Francis Regional Medical Center in Shakopee for a broken pelvis and fractured spine after a 2024 motorcycle accident. He was uninsured and between jobs. The hospital billed him more than $19,000 but never mentioned financial aid, according to his mother, Janet.

The family learned about charity care through an internet ad. Dollar For helped Robling qualify for financial assistance five months after his accident. An Allina Health spokesperson declined to comment on the case but said the health system has since reached out to the family.

In another case, M Health Fairview's University of Minnesota Medical Center hospitalized an unemployed, uninsured man from Idaho for two months of psychiatric care. The hospital offered him a two-year payment plan at $6,500 per month, even though he had no income. The man's sister, who is a doctor, contacted a lawyer to get help. Only then did the hospital offer him charity care.

Fairview spokesperson Aimee Jordan said she could not comment on the case due to patient privacy laws, but she said patients offered payment plans can always apply for charity care afterward.

Hospitals use 11 different income thresholds to determine whether patients qualify for free care. HCMC's parent company, Hennepin Healthcare in Minneapolis, and Olmsted Medical Center in Rochester offer the highest threshold: 300 percent of the federal poverty level, which is nearly $48,000 a year for an individual.

Standards vary even between neighboring hospitals. Madelia Health in south-central Minnesota limits financial assistance to patients earning less than twice the federal poverty level. About 13 miles away at Mayo's hospital in St. James, patients earning twice as much can qualify for help.

Some Minnesota hospitals consider only income when evaluating patients. Most demand bank account information. More than two-thirds require additional details about retirement accounts, life insurance policies, property values, and vehicle ownership. One hospital's policy states patients "may be required to sell recreational vehicles."

Hendricks Community Hospital, near the South Dakota border, asks financial aid applicants 53 questions about their finances. Questions cover the make, model, and value of vehicles; the market value of farm equipment, livestock, and land; and the purchase price and square footage of homes. The hospital says stringent requirements ensure limited resources go to those who need them most.

"We don't feel it's fair for someone with lower annual income but yet owns numerous acres of land, debt-free, to be able to qualify for charity care," said Travis Olsen, chief executive of Hendricks Community Hospital.

Hospital leaders say community pressure, not just applications, deters people from seeking aid. "People are too proud to pick up an application. We all know each other," said Olsen.

But complexity is the real barrier, experts say. "The drop-off rates are much higher the more questions you ask and the more documentation you have to provide," said Walker at Dollar For.

Arleen Mullenax had a cancerous tumor removed from her neck at Mayo in Rochester. Assembling her financial aid application while dealing with "cancer fog" was overwhelming. "I knew as a former office manager I had to stay on top of it," she said. "But it was the most daunting thing I had to do as a patient."

Attorney General Ellison and several state lawmakers want to simplify the system. They are calling for common eligibility standards and a standard application across Minnesota hospitals. New York and Maryland already use both approaches.

"Eliminating as many barriers as possible for people is really important," said state Sen. Liz Boldon. She said she hopes lawmakers can enact these standards in the next session.

The Minnesota Hospital Association opposes standardizing financial assistance, arguing that hospital boards are best positioned to assess charity care needs in their communities. "Adding mandates for providers across the state will not close that gap, and will only increase bureaucratic and procedural barriers to patient care," said Nelson.

Ellison has also pushed hospitals to automatically screen and qualify low-income patients for financial aid without requiring an application. Some hospital systems already do this. South Dakota-based Sanford Health uses software that checks patients' eligibility based on information such as credit history. At Sanford Health's 10 Minnesota hospitals, about a quarter of patients who receive financial aid get it this way, said Nick Olson, the system's chief financial officer.

Nearly all Sanford hospitals devote more than 1 percent of their operating expenditures to charity care, higher than most hospitals in the state. Screening software can be expensive, and several executives at small Minnesota hospitals said they cannot afford it.

Other solutions exist. In California, Los Angeles County is developing a public system allowing hospitals to quickly assess patients' eligibility without buying their own software. Texas and Nevada have laws requiring hospitals to provide minimum amounts of charity care.

Back in St. Cloud, Roberts drives past CentraCare's $200 million expansion at its Plaza campus and wonders why Minnesota hospitals do not live up to higher standards. "They have all the money," she said. "But they can't grant a good person some grace?"