Hospital Charity Care: How It Works and Why It Matters

Authors: Zachary Levinson, Scott Hulver, and Tricia Neuman

Published: Nov 3, 2022

About four in ten adults (41%) in the United States—and about six in ten (57%) of those with household incomes below $40,000—have some level of medical debt, owing an estimated $195 billion or more in total. Many adults who report medical debt cite costs associated with emergency care (50%) and hospitalizations (35%) as sources of unpaid bills. Affording this care may be especially challenging for the large number of adults who are uninsured or underinsured. The financial impact of unpaid bills from hospitals and other providers on patients and their families can be substantial and long lasting. Recent reporting indicates that hospitals are earning healthy margins in some regions where a large share of residents are burdened with medical debt. In response to concerns about medical debt and the affordability of care more generally, policymakers have explored options to strengthen the regulation of hospital charity care programs, which provide free or discounted services to eligible patients who are unable to afford their care.

This issue brief addresses key questions about hospital charity care programs. According to our analysis of hospital cost reports, charity care costs represented 1.4 percent or less of operating expenses at half of all hospitals in 2020, though the level of charity care varied substantially across facilities (Figure 1) (see Methods for details about our calculations). For example, while charity care costs represented 0.1 percent of operating expenses or less on the lower end of the spectrum (for 8% of hospitals), they represented 7.0 percent of operating expenses or more among a similar share of hospitals (9%). The variation in charity care costs as a percent of operating expenses likely reflects differences in hospitals’ missions and business practices; the need for charity care among patients; and federal, state, and local policy and regulation. Federal, state, and local governments provide funding in a variety of ways—including through tax benefits for nonprofit hospitals—to support hospital charity care, which may in part motivate efforts to increase the regulation of these programs. Although charity care programs are an important source of relief for uninsured and underinsured patients, many Americans continue to have difficulty affording hospital care. In 2022, about one in seven adults (14%) reported delaying hospital services in the past year due to cost.

Half of all hospitals reported that charity care costs represented 1.4% or less of their operating expenses in 2020, though the level of charity care varied substantially across facilities

What is hospital charity care?

The Internal Revenue Service (IRS) defines “charity care”, also known as “financial assistance”, as “free or discounted health services provided to persons who meet the organization’s eligibility criteria for financial assistance and are unable to pay for all or a portion of the services.”¹ Depending on their eligibility criteria, hospitals may provide charity care to both uninsured and insured patients. Among other government regulations, federal law requires that nonprofit hospitals—which account for nearly three-fifths (58%) of community hospitals—provide some level of charity care as a condition of receiving tax-exempt status, and many state governments require all or a subset of hospitals to extend eligibility for charity care to certain groups of patients. Within the broad parameters set by government regulation, hospitals establish their own charity care policies, which vary in terms of eligibility criteria, application procedures, and the levels of charity care provided. While hospitals bear the direct costs of providing charity care, support from donors and federal, state, and local governments may cover some or all of these expenses. Estimates from one recent study suggest that the value of the tax exemption alone covered about half (50%) of the cost of charity care and other community benefits provided by nonprofit hospitals from 2011 to 2018.²

The sum of charity care and bad debt is sometimes referred to as “uncompensated care”. “Bad debt” refers to instances where a hospital bills a patient but, after pursuing collection, determines that it is unlikely to collect payment. This stands in contrast to charity care, for which hospitals do not seek reimbursement. Hospitals accumulate bad debt when patients are unable or unwilling to pay for their care. Some of these patients may be eligible for charity care under the hospital’s charity care policy but do not know to apply, have difficulty doing so, have their application improperly denied, or choose not to apply.

Who is eligible for hospital charity care?

Hospitals have broad flexibility to establish their own eligibility criteria for charity care, and as a result, eligibility criteria vary across hospitals. For example, one analysis of a large sample of nonprofit hospitals that used the federal poverty level (FPL) to determine eligibility for free care in 2018 found that about one in three (32%) of the hospitals required patients to have incomes at or below 200 percent of the FPL ($50,200 for a family of four in that year) or imposed more restrictive eligibility criteria, while the remaining hospitals (68%) relied on higher income caps. For discounted care, about three-fifths (62%) of nonprofit hospitals in the study limited eligibility to patients with incomes at or below 400 percent of the FPL or used lower income levels, with the remaining nonprofit hospitals (38%) relying on higher income caps.

Hospitals may condition free or discounted care on other eligibility criteria in addition to or in lieu of income thresholds based on the FPL, such as by requiring that patients have limited assets or reside in the hospital service area or by extending eligibility to patients who are unable to afford large medical bills despite exceeding income or asset thresholds under standard eligibility pathways. For example, one analysis of charity care policies at 170 large nonprofit and government hospitals found that most policies (76%) identified a streamlined application process for some groups that are likely eligible for charity care, such as patients experiencing homelessness.

It is unclear what share of low-income patients are eligible for hospital charity care, let alone what share of eligible patients end up benefiting from these programs, or what share of their costs are covered. Eligible patients may not receive charity care because they are unaware that charity care is available, do not know that they are eligible, have difficulty completing an application, are improperly denied charity care by the hospital, or choose not to apply. Some evidence suggests that many eligible patients may not be benefiting from charity care. For example, nonprofit hospitals have estimated that, of the bad debt that they reported in 2019 (reflecting expenses in 2017 or an earlier year), about $2.7 billion came from patients who were likely eligible for charity care but did not receive it. This amount is a rough estimate, as it comes from unaudited hospital reports, is restricted to nonprofit facilities, and does not account for instances where eligible patients paid bills that would have been reduced under a given hospital’s charity care program.

How much charity care do hospitals provide?

According to the Medicaid and CHIP Payment and Access Commission (MACPAC), hospitals reported $28 billion in charity care costs in fiscal year (FY) 2019, the majority of which ($22 billion) was for uninsured individuals. Based on our analysis of hospital cost reports, charity care costs represented 1.4 percent or less of operating expenses at half of all hospitals in 2020, though the level of charity care varied substantially across facilities (Figure 1) (see Methods for details about our calculations). For example, while charity care costs represented 0.1 percent of operating expenses or less on the lower end of the spectrum (for 8% of hospitals), they represented 7.0 percent of operating expenses or more among a similar share of hospitals (9%). Charity care costs as a percent of operating expenses were 2.6% in 2020 on average, which is greater than the median given that a relatively small share of hospitals reported relatively large amounts of charity care. Variation in charity care levels across hospitals likely reflects differences in their missions and business practices; the need for charity care among patients; and federal, state, and local policies and regulations. The Medicare Payment Advisory Commission (MedPAC) has noted that the current method for calculating charity costs favors hospitals with higher markups, and it has recommended revisions that would put hospitals on more equal footing and reduce reported charity care costs on average.

Recent research has found that for-profit hospitals devote a similar share of their operating expenses to charity care as government hospitals on average and a larger or similar share as nonprofit hospitals. This may seem counterintuitive because, unlike for-profit hospitals, nonprofit hospitals receive large tax-breaks which are, in part, intended to subsidize the charity care that they provide. Among potential explanations for this result, for-profit hospitals may have a greater willingness to provide charity care in some scenarios because they can take a tax deduction for these expenses, and it is possible that some nonprofit hospitals may not expect significant oversight of their charity care practices from government regulators.

What role does charity care play for undocumented and lawfully present immigrants?

Hospital charity care may play an important role in protecting undocumented and lawfully present immigrants from high medical costs given that they are more likely than citizens to have low incomes and lack health insurance. In 2020, about four in ten undocumented and lawfully present nonelderly immigrants (44% and 39%, respectively) had incomes below 200 percent of the FPL compared to about a quarter (26%) of nonelderly citizens. Additionally, about four in ten (42%) nonelderly undocumented immigrants and a quarter (26%) of nonelderly lawfully present immigrants were uninsured compared to less than one in ten (8%) nonelderly citizens. This disparity reflects more limited access to private coverage and eligibility restrictions based on immigration status in health insurance programs funded with public dollars. Even though charity care programs provide financial assistance for some immigrants, overall, research suggests that immigrants use less health care, including hospital care, than U.S.-born citizens, and it remains unclear to what extent they benefit from charity care programs and how their use of these programs compares to that of citizens.

What charity care rules must nonprofit hospitals comply with in exchange for receiving federal tax-exempt status?

Federal regulations require that nonprofit hospitals provide some level of charity care and other community benefits as a condition of receiving tax-exempt status. The IRS has defined different types of community benefits, including patient benefits (such as charity care), system benefits (such as unreimbursed medical education), and community building activities (such as addressing environmental hazards). According to one study, in 2017, unreimbursed Medicaid expenses accounted for the plurality (44%) of nonprofit hospitals’ community benefit expenses, followed by charity care (17%), unreimbursed health professions education (15%), subsidized health services that are not mean-tested (10%), community health improvement services and operations (4%), unfunded research (4%), cash and in-kind contributions for community benefit (3%), unreimbursed costs for means-tested programs aside from Medicaid (2%) and building activities (e.g., related to housing) (1%). “Unreimbursed expenses” for Medicaid—the nation’s public health insurance program for people with low incomes—and other means-tested programs refers to the extent to which costs related to patients enrolled in these programs exceed corresponding revenues for hospitals. Any unreimbursed expenses from other payers are generally not counted in hospital community benefit calculations.

To retain tax-exempt status, nonprofit hospitals must:

Establish a financial assistance policy (FAP). The FAP must describe who is eligible for charity care, the level of assistance provided, and how patients can apply. A hospital must make its FAP easily accessible to patients and ensure that the FAP is translated into the languages commonly spoken in the community served by the hospital.
Cap charges to patients eligible for charity care based on amounts generally billed to other payers. Federal regulation defines approaches for calculating the amount generally billed based on fee-for-service Medicare rates, Medicaid rates, and/or commercial plan payment rates.
Conduct a community health needs assessment (CHNA) every three years and adopt an implementation strategy to address those needs. The CHNA must define the community that the hospital serves and evaluate the health needs of that community, integrating input from local stakeholders. Community health needs could include, for example, lowering financial barriers to health care or improving social determinants of health.
Make reasonable efforts to determine if a patient is eligible for charity care before engaging in certain debt collection practices, including selling the patient’s debt to third parties, reporting the debt to credit agencies, and taking legal action to control a patient’s financial assets. A “reasonable effort” could entail, for example, notifying the patient of the FAP and giving them at least four months to apply following their first bill after being discharged from the hospital.

However, gaps in federal regulation and weak oversight and enforcement may allow hospitals to provide low levels of charity care in some instances. Federal regulations do not currently define or set minimum standards for hospitals to determine who is eligible for charity care or the level of assistance to be provided. A 2020 Government Accountability Office (GAO) report also raised questions about whether requirements to provide sufficient community benefits, including charity care, are being adequately enforced. According to the report, the IRS had not revoked a hospital’s nonprofit status on the basis of providing inadequate community benefits over the prior ten years.

Do states impose additional charity care requirements for hospitals?

Slightly over half of all states (26 states and DC) require all or a subset of hospitals to extend eligibility for charity care to certain groups of patients, according to a 2021 report from the National Consumer Law Center. Among those that do so, 11 states (CA, CO, CT, IL, MD, ME, NJ, NV, NY, RI, and WA) broadly extend minimum standards to for-profit, nonprofit, and government hospitals alike. The 16 remaining state laws extend to narrower groups of hospitals, including nonprofit or government hospitals (3 states: LA, OR, and TX), hospitals that receive certain types of government funding to offset the cost of care for low-income patients (9 states: GA, KS, KY, MO, NM, OH, OK, PA, and TN), and hospitals seeking approval to expand or build new health care facilities (DC and 3 states: DE, NC, and VA). These state regulations also vary in terms of eligibility criteria and the level of assistance that must be provided. For example, Nevada requires a subset of hospitals to provide free care to uninsured patients with especially low incomes (38% or 39% of the FPL in 2022 depending on household size), while Maryland requires every acute and chronic care hospital to provide free care to both insured and uninsured patients at or below 200% of the FPL and to provide discounted care to patients with higher incomes.

In addition to setting minimum standards in terms of eligibility, several states have implemented regulations intended to increase the uptake of charity care among eligible patients and to protect potentially eligible patients from certain debt collection practices. For example, one analysis found that 13 states require hospitals to screen patients for eligibility, 16 states require hospitals to notify patients prior to collecting payment and/or in every notification about collections, and 8 states regulate procedures for patients to appeal denials of charity care.

There is little information about the effectiveness of these regulations or the extent to which they are enforced. One recent example of a state enforcement activity occurred in California, where the Attorney General sent letters to hospitals alleging that they were not providing descriptions of their charity care policies to patients in the patients’ spoken languages. Another recent example occurred in Washington, where the Attorney General filed a lawsuit against 14 hospitals for violating state charity care requirements, including by sending many patients’ bills to collections when the hospitals knew the patients were eligible for charity care.

What role do Medicaid, Medicare, and other government programs play in helping hospitals afford charity care expenses?

Medicaid provides health coverage for low-income patients and subsequently plays a significant role in reducing uncompensated care, including by lowering the demand for hospital charity care. This was especially evident in 2014, when many states adopted the Medicaid expansion under the Affordable Care Act (ACA) (and when enrollment in the ACA Marketplaces also began in all states). Among hospitals in states that expanded Medicaid, total uncompensated care costs decreased from $16.7 billion in 2013 to $11.0 billion in 2014 (a 34% decrease); in contrast, uncompensated care costs decreased by a much smaller amount (from $18.1 billion in 2013 to $17.9 billion in 2014, a 1% decrease) among hospitals in states that did expand Medicaid.

Medicaid and Medicare both provide supplemental payments to hospitals that are intended, at least in part, to offset the costs of charity care and other uncompensated care:

Medicare disproportionate share hospital (DSH) payments. Medicare provides additional payments to hospitals that care for a disproportionate share of low-income patients, which are known as “DSH hospitals”. The magnitude of Medicare DSH payments is based on hospitals’ Medicaid and Supplemental Security Income (SSI) populations and the amount of uncompensated care that they provide, among other factors. The Centers for Medicare and Medicaid Services (CMS) estimates that additional Medicare payments to DSH hospitals will total $14.0 billion in FY 2023.
Medicaid DSH payments. State Medicaid programs also provide additional payments to DSH hospitals. Federal regulations provide states with a substantial level of discretion in terms of which facilities to designate as DSH hospitals and how to distribute funding. Medicaid DSH payments totaled $19.5 billion in FY 2020.
Medicaid uncompensated care pool payments. In FY 2020, eight state Medicaid programs paid hospitals a total of $8.2 billion to help offset the costs of uncompensated care.

Other state and federal programs may provide additional support to hospitals, which in turn can reduce the amount of charity care hospitals have to absorb. For instance, some state and local governments operate programs beyond Medicaid that provide coverage to low-income patients or that offset uncompensated care costs. As another example, the 340B Drug Pricing Program provides substantial financial support primarily to hospitals that serve a large number of low-income patients. Under this program, the federal government requires drug manufacturers to offer discounts on outpatient drugs to certain hospitals as a condition of having their drugs covered by Medicaid. Sales of 340B drugs totaled an estimated $44 billion in 2021 and DSH hospitals account for the large majority (78%) of sales. These additional revenues help facilities cover their operating expenses, including costs related to the provision of charity care.

How has the provision of charity care changed during the pandemic?

Although the COVID-19 pandemic has led to significant and ongoing disruptions in hospital operations, hospital admissions bounced back after sharp initial declines, and large amounts of government relief have helped stabilized hospital finances and charity care spending. Most prominently, the federal Provider Relief Fund (PRF) program has distributed $134 billion to hospitals and other providers as of early October 2022 to cover health care expenses or lost revenues due to the pandemic. Although the PRF program initially distributed funds on the basis of total patient revenue, which favored hospitals that received a large share of their revenues from private insurance, it later included $16 billion that was earmarked for safety-net hospitals. Among other relief programs, the government also reimbursed providers, including hospitals, for treating uninsured patients for COVID-19, with payments totaling $5.8 billion by the time the program stopped reimbursing claims in March 2022 due to lack of funding.

One study found that average hospital operating margins decreased from -1.0% in 2019 to -7.4% in 2020 when excluding COVID-19 relief funds, but that total margins—which take relief funds into account—were relatively constant over time and were 6.7% in 2020. Similarly, average charity care costs as a percent of operating expenses remained relatively constant at 2.7% in 2019 and 2.6% in 2020 based on our analysis of hospital cost reports (see Methods for details about our calculations). One analysis of 151 large nonprofit and government hospitals found that about three in ten (31%) expanded their charity care policies from 2019 to 2021, while less than one in ten (8%) moved towards more restrictive policies; the remaining hospitals made minimal, indeterminate, or no change to their charity care policies.

Some reports suggest that the financial outlook for hospitals has deteriorated in recent months, which may make it harder for hospitals to maintain current levels of charity care. Further monitoring is needed to assess the extent to which hospitals are experiencing financial stress in response to ongoing effects of the pandemic such as labor shortages, decreases in government relief, rising drug costs, and broader economic trends that have led to rising prices and investment losses.

Looking ahead

In the context of ongoing concerns about the affordability of hospital care and the growing burden of medical debt, several policy ideas have been floated at the federal and state level to strengthen hospital charity care programs. These include changes that would strengthen the requirements for nonprofit hospitals to qualify for tax-exempt status, as well as broader reforms that would apply to all hospitals. Specific proposals include creating or expanding requirements that hospitals provide charity care to patients below a specified income threshold, mandating that nonprofit hospitals provide a minimum amount of community benefits, establishing a floor-and-trade system where hospitals would be required to either provide a minimum amount of charity care or subsidize other hospitals that do so, introducing policies to increase the uptake of charity care, expanding oversight and enforcement of community benefit requirements, and restructuring the tax exemption for nonprofit hospitals to more closely tie government subsidies to the value of charity care and other community benefits provided by a given facility. A related set of proposals are intended to better align community benefits with local or regional needs and may therefore also affect the provision of charity care.

Recent policy changes have been concentrated at the state level. For example, since 2021, California and Washington state have expanded their charity care mandates to cover more patients through higher income eligibility thresholds. Colorado has introduced a private right of action to enforce hospital compliance with charity care requirements, and Illinois has implemented new reporting requirements for charity care programs. State and federal policymakers have also considered several other options to reduce medical debt or increase affordability more generally, such as by expanding Medicaid in states that have not already done so, reducing health care prices through direct regulation or other means, and increasing consumer protections against medical debt.

Efforts to expand hospital charity care will inevitably involve tradeoffs, including the potential cost to hospitals from protecting patients who cannot afford their hospital bills.

Methods

Our analysis of reported charity care costs as a percent of operating expenses is based on 2019-2020 RAND Hospital Data, which is a cleaned and processed version of annual cost report data submitted by hospitals to the Healthcare Cost Report Information System (HCRIS). Every Medicare-certified hospital must submit a cost report, meaning that HCRIS data encompass all US hospitals except federal hospitals and some children’s hospitals. HCRIS instructions indicate that hospitals should report amounts related to both their charity care and uninsured discounts as part of their charity care costs. The Medicare Payment Advisory Commission (MedPAC) has noted that current HCRIS calculations favor hospitals with higher markups, and it has recommended revisions that would put hospitals on more equal footing and reduce reported charity care costs on average.

Our analysis relied on a calendar year version of the RAND Hospital Data, which apportions data from different cost reports for hospitals that do not use a calendar year reporting period. We focused on short-term general hospitals in all 50 states plus DC. We recoded missing charity care costs as $0 if the hospital reported total unreimbursed and uncompensated care costs (affecting about 3% of hospitals) but left as missing otherwise. There were no other instances of $0 charity care costs in our sample. We excluded hospitals with incomplete data for the calendar year, missing or negative operating expenses or charity care costs, or outlier amounts of charity care as a percent of operating expenses (greater than or equal to 38.0%, i.e., the top 0.1% of hospitals). Our final sample for 2020 included 4,279 of the 4,546 short-term general hospitals in the 2020 RAND Hospital Data. When comparing charity care costs in 2019 and 2020, we restricted the sample to the 4,236 hospitals that were in sample in both years.

We evaluated two adjustments to our analysis and found that neither substantially affected our primary findings. First, we found that dropping all hospitals with missing charity care costs, rather than recoding a subset as $0, would result in a similar median value for charity care costs as a percent of operating expenses (1.5% versus 1.4%) and the same mean value (2.6%), with somewhat less variation across hospitals than in our analysis. For example, under this alternative approach, charity care costs would represent 0.2 percent of operating expenses or less among eleven percent of hospitals and 7.0 percent of operating costs or more among nine percent of hospitals. Second, as with our analysis comparing 2019 and 2020, when further restricting the sample to the 1,628 hospitals that used a calendar year reporting period in both years, average charity care costs as a percent of operating expenses remained relatively constant over time (at 2.3% in 2019 and 2.2% in 2020).

This work was supported in part by Arnold Ventures. KFF maintains full editorial control over all of its policy analysis, polling, and journalism activities.

The IRS definition also indicates that charity care excludes “bad debt or uncollectible charges that the organization recorded as revenue but wrote off due to a patient’s failure to pay, or the cost of providing such care to such patients; the difference between the cost of care provided under Medicaid or other means-tested government programs or under Medicare and the revenue derived therefrom; self-pay or prompt pay discounts; or contractual adjustments with any third-party payors”. ↩︎
We derived this estimate from the study by dividing the estimated average value of tax exemption (4.26%) by the estimated average value of community benefits (8.47%). ↩︎

News Release

Half of All Hospitals Have Charity Care Costs That Represent 1.4% or Less of Their Operating Expenses

New Report Explains How Hospital Charity Care Works and the Laws Governing It

Published: Nov 3, 2022

Half of hospitals reported that the cost of providing charity care to patients represented 1.4% or less of their operating expenses in 2020, though the rates vary widely from hospital to hospital, a new KFF analysis finds.

Based on a review of hospital cost report data, the analysis finds some hospitals provide little or no charity care (0.1% or less of operating expenses at 8% of hospitals), while others provide far more charity care (at least 7% of operating expenses at 9% of hospitals).

The variation in charity care rates may reflect differences in individual hospitals’ mission and business practices; the need for charity care among their patients; and federal, state, and local policies and regulations.

The analysis is part of a new brief that examines the role of hospital charity care programs in helping patients who cannot afford their care. The brief answers frequently asked questions, including:

How much charity care do hospitals provide?
Which patients are eligible for charity care?
What are the requirements related to charity care for nonprofit hospitals to receive federal tax-exempt status, and what additional requirements do states impose on hospitals?
How do Medicaid and Medicare help hospitals afford charity care expenses?
How did the COVID-19 pandemic affect charity care?

The brief also discusses policy proposals related to hospital charity care programs, such as creating or expanding requirements that hospitals provide charity care to patients below a specified income threshold, introducing requirements to increase the uptake of charity care, and strengthening oversight and enforcement of existing regulation. It is part of KFF’s expanding work examining the business practices of hospitals and other providers and their impact on costs and affordability.

Contact

Chris Lee

KFF

clee@kff.org

Interest in Using Over-the-Counter Oral Contraceptive Pills: Findings from the 2022 KFF Women’s Health Survey

Authors: Michelle Long, Brittni Frederiksen, Usha Ranji, Karen Diep, and Alina Salganicoff

Published: Nov 3, 2022

Section:

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Issue Brief

Introduction

In July 2022, Perrigo’s HRA Pharma submitted an application to the Food and Drug Administration (FDA) to make its progestin-only oral contraceptive (Opill) available over the counter (OTC). The typical review period is 10 months. If approved, it would be the first daily oral contraceptive pill approved for OTC use available in the U.S. Although it is farther behind in the process, another pharmaceutical company, Cadence, is working toward FDA approval of an OTC version of its combined oral contraceptive pill (Zena).

Oral contraceptives are the most commonly used method of reversible contraception in the U.S., and studies suggest that OTC access would increase use of contraception and facilitate continuity of use in addition to saving time spent on travel, at a doctor’s office, and off work. The American Medical Association and the American College of Obstetricians and Gynecologists support efforts to make an oral contraceptive pill available OTC, without age restrictions.

This brief presents data from the 2022 KFF Women’s Health Survey (WHS) about reproductive age (18-49) females’ preferences for an OTC contraceptive pill (N = 4,088). The KFF WHS is a nationally representative survey that includes 5,201 females¹ , conducted primarily online from May 10, 2022, to June 7, 2022. The survey covers several topics related to reproductive health and well-being. See the Methodology section for details.

Findings

More than three-quarters (77%) of reproductive age females favor making birth control pills available over the counter without a prescription if research showed they are safe and effective (Figure 1). Fifty-six percent strongly favor this policy and 21% somewhat favor it, even if they would not use this option themselves. Twelve percent of females either somewhat or strongly oppose this policy and 11% did not know whether they favor or oppose it.

Larger shares of recent oral contraceptive users (60%) strongly favor making birth control pills available OTC compared to those who have not used contraception in the past 12 months (52%).

About six in ten (59%) White and Hispanic reproductive age females strongly favor making a birth control pill available OTC if research showed it is safe and effective compared to less than half of Black (44%) and Asian/Pacific Islander females (47%). Higher-income (>= 200% FPL) females (62%) are more likely than low-income (< 200% FPL) females (49%) to say that they strongly favor making birth control pills available OTC.²

Large majorities of reproductive age females across demographic groups favor making birth control pills available over the counter without a prescription

Two in five (39%) reproductive age females would be likely to use OTC birth control pills that do not require a prescription if approved by the FDA (Figure 2). One in five would be very likely (19%) or somewhat likely (20%) to use them. Almost half (46%) say they would be somewhat or very unlikely to use them and 14% do not know.

Interest is significantly higher among females who currently use oral contraceptives. Sixty percent of reproductive age females who have used birth control pills in the past 12 months said they would be likely or very likely to use OTC birth control pills compared to 40% of other contraceptive users and 29% of contraceptive non-users.

A higher share of reproductive age Hispanic females (25%) say they would be very likely to use OTC birth control pills if approved by the FDA than their White counterparts (17%). The share of low-income females who would be very likely to use OTC birth control pills is similar to the share of higher-income females (20% and 19%, respectively). One in four (24%) uninsured reproductive age females would be very likely to use them compared to about one in five (18%) of those with private health insurance. A higher share of females living in urban/suburban (20%) are very likely to use OTC birth control pills than rural females (13%).

Two in five reproductive age females would be likely to use over-the-counter birth control pills, with higher likelihood among the uninsured

Convenience is the leading reason that reproductive age females say they would be somewhat or very likely to use OTC birth control pills (59%) (Figure 3). Fifteen percent believe it would be faster; 8% do not want to have to have a physical or pelvic exam; 7% say it would be more confidential; 6% think it would save money; and 3% do not want to use their health insurance to buy birth control pills.

Convenience is the main reason why females would be likely to use over-the-counter birth control pills

While convenience is the leading reason for wanting to use an OTC birth control pill across demographic groups, there are some differences within groups. Nearly two-thirds (64%) of higher-income (>= 200% FPL) reproductive age females who say they would be likely to use OTC birth control pills cite convenience as their main reason (Table 1). One in ten Black females (10%) and those ages 18 to 25 (9%) say their main reason is confidentiality, compared to 5% of White females and 4% of females ages 36-49. Sixteen percent of uninsured females say they would be likely to use OTC birth control pills mainly because they think it would save money, compared to 5% of those with private health insurance. Among reproductive age females likely to use OTC birth control pills, one in five (20%) with Medicaid say that it would be faster, compared to 13% of those with private insurance.

Reasons for wanting to us to use an OTC birth control pill can vary between demographic groups

Among reproductive age females who say they would be somewhat or very unlikely to use OTC birth control pills without a prescription, or who are not sure, the majority (53%) say that the main reason is because they do not currently use birth control pills or do not plan to use them in the future (Figure 4). Sixteen percent say that they would prefer to talk to a health care provider before starting or refilling birth control pills; 12% cited safety concerns as the main reason they would be unlikely to use them; 3% said they would be concerned about the cost; and 3% would be concerned about whether their health insurance would cover them.

Thirteen percent of reproductive age females who are unlikely to or not sure if they would use OTC birth control pills without a prescription report that they are unlikely to use them for some other reason; common reasons include that they or their partner have had a sterilization procedure or that they prefer another method.

These estimates change, however, when looking at reproductive age females who have used oral contraceptives in the past 12 months and those who have used other methods of contraception. Among oral contraceptive users who say that they would be unlikely to use an OTC oral contraceptive or are not sure, the main reason is that they prefer to talk to a provider before starting or refilling birth control pills (46%), followed by safety concerns (20%). Among users of other contraceptive methods who say that they would be unlikely to use an OTC oral contraceptive or are not sure, the main reason is that they do not use or plan to use birth control pills (55%), followed by a preference for talking to a provider before starting or refilling birth control pills (15%).

Reasons for being unlikely to or unsure about using OTC oral contraception vary by contraceptive use status

Among reproductive age females who say they would be unlikely to use OTC birth control pills without a prescription, or who are not sure, 17% of those ages 18-25 cite safety concerns as the main reason compared to 9% of those ages 36-49 (Table 2). A larger share of those ages 18 to 25 (25%) cites a preference to talk to a health care provider before starting or refilling birth control than those ages 36-49 (14%). Seventeen percent of Black and Asian/Pacific Islander females say that they have safety concerns, higher than the share of White females (10%) who have the same concern.

Not using or planning to use birth control pills is the main reason why females would not be likely to use over-the-counter birth control pills

Among reproductive age females who report being likely to use OTC birth control pills, two in five (39%) would be willing and able to pay $1-$10 per month for them (Table 3). One-third (34%) would be willing and able to pay $11-$20 per month and 16% would pay more than $20. One in ten (11%) say they are unwilling or unable to pay anything for OTC birth control pills. Currently, most private insurance plans and Medicaid are required to cover the full cost of prescribed contraceptives.

Among those who say they are likely to use OTC birth control pills, 17% of oral contraceptive users say they would be unwilling or unable to pay anything for them, compared to 7% of contraceptive non-users. Nearly one in five (21%) uninsured females would pay more than $20 per month. Notably, there are no statistically significant differences by income level.

Majority of those likely to use over-the-counter oral contraception would be willing/able to pay up to $20/month; one in ten unwilling/unable to pay anything

Looking Forward

There is broad support among females for an OTC oral contraceptive pill, and many are likely to use it. However, likely users are cost-sensitive, with only one in six willing and able to pay more than $20 per month for it and one in ten not willing or able to pay anything for it.

At the federal level, the Affordable Care Act requires most private health insurance plans to cover FDA-approved contraception for women; however, it must be prescribed in order for it to be covered. The most recent guidance about ACA implementation, issued by the Departments of Labor and Health and Human Services, and the Treasury in July 2022, states that plans and issuers are encouraged to cover OTC emergency contraceptive products with no cost sharing when they are purchased without a prescription, but the guidance does not currently require it.

At the state level, nine states currently require health plans regulated by the state, including fully-insured employer plans and individual plans, to cover OTC contraceptive medications without cost sharing, and without a prescription from a health care provider (three of those state laws apply to emergency contraception only). While no-cost coverage of prescription contraceptives has been required under Medicaid for decades, only six states and DC report covering OTC emergency contraception without a prescription in their Medicaid programs.

The pharmaceutical company that submitted an FDA application to switch from prescription-to-OTC status has not yet made price information publicly available. In addition to the retail cost, which will be an important consideration for those not using insurance, should a daily oral contraceptive pill become available OTC, accessibility and uptake will also depend on whether private health insurance and Medicaid cover it without a prescription.

Aside from the cost issues, many reproductive age women say they would still prefer to talk to a health care provider before starting or refilling birth control and others say they would still have safety concerns. These findings indicate that outreach and education will also play an important role in helping women understand their options in using an OTC oral contraceptive pill should the FDA approve the change in status.

This work was supported in part by Arnold Ventures. KFF maintains full editorial control over all of its policy analysis, polling, and journalism activities.

Methodology

Overview

The 2022 KFF Women’s Health Survey is a nationally representative survey of 6,442 people ages 18 to 64, including 5,201 females (self-reported sex at birth) and 1,241 males, conducted from May 10, 2022, to June 7, 2022. The objective of the survey is to help better understand respondents’ experiences with contraception, potential barriers to health care access, and other issues related to reproductive health. The survey was designed and analyzed by researchers at KFF (Kaiser Family Foundation) and fielded online and by telephone by SSRS using its Opinion Panel, supplemented with sample from IPSOS’s KnowledgePanel.

This work was supported in part by Arnold Ventures. KFF maintains full editorial control over all of its policy analysis, polling, and journalism activities.

Questionnaire design

KFF developed the survey instrument with SSRS feedback regarding question wording, order, clarity, and other issues pertaining to questionnaire quality. The survey was conducted in English and Spanish. The survey instrument is available upon request.

Sample design

The majority of respondents completed the survey using the SSRS Opinion Panel (n=5,202), a nationally representative probability-based panel where panel members are recruited in one of two ways: (1) through invitations mailed to respondents randomly sampled from an Address-Based Sample (ABS) provided by Marketing Systems Group through the U.S. Postal Service’s Computerized Delivery Sequence. (2) from a dual-framed random digit dial (RDD) sample provided by Marketing Systems Group.

In order to have large enough sample sizes for certain subgroups (females ages 18 to 35, particularly females in the following subgroups: lesbian/gay/bisexual; Asian; Black; Hispanic; Medicaid enrollees; low-income; and rural), an additional 1,240 surveys were conducted using the IPSOS KnowledgePanel, a nationally representative probability-based panel recruited using a stratified ABS design.

Data collection

Web Administration Procedures

The majority of surveys completed using the SSRS Opinion Panel (n=5,056) and all of the surveys completed using the KnowledgePanel (n=1,240) were self-administered web surveys. Panelists were emailed an invitation, which included a unique passcode-embedded link, to complete the survey online. In appreciation for their participation, panelists received a modest incentive in the form of a $5 or $10 electronic gift card. All respondents who did not respond to their first invitation received up to five reminder emails and panelists who had opted into receiving text messages from the SSRS Opinion Panel received text message reminders.

Overall, the median length of the web surveys was 13 minutes.

Phone Administration Procedures

In addition to the self-administered web survey, n=146 surveys were completed by telephone with SSRS Opinion Panelists who are web reluctant. Overall, the median length of the phone surveys was 28 minutes.

Data processing and integration

SSRS implemented several quality assurance procedures in data file preparation and processing. Prior to launching data collection, extensive testing of the survey was completed to ensure it was working as anticipated. After the soft launch, survey data were carefully checked for accuracy, completeness, and non-response to specific questions so that any issues could be identified and resolved prior to the full launch.

The data file programmer implemented a “data cleaning” procedure in which web survey skip patterns were created in order to ensure that all questions had the appropriate numbers of cases. This procedure involved a check of raw data by a program that consisted of instructions derived from the skip patterns designated on the questionnaire. The program confirmed that data were consistent with the definitions of codes and ranges and matched the appropriate bases of all questions. The SSRS team also reviewed preliminary SPSS files and conducted an independent check of all created variables to ensure that all variables were accurately constructed.

As a standard practice, quality checks were incorporated into the survey. Quality control checks for this study included a review of “speeders,” reviewing the internal response rate (number of questions answered divided by the number of questions asked) and open-ended questions. Among all respondents, the vast majority (97%) answered 96% or more of the survey questions they received, with no one completing less than 91% of the administered survey (respondents were informed at the start of the survey that they could skip any question).

Weighting

The data were weighted to represent U.S. adults ages 18 to 64. The data include oversamples of females ages 18 to 35 and females ages 36 to 64. Due to this oversampling, the data were classified into three subgroups: females 18 to 35, females 36 to 64, and males 18 to 64. The weighting consisted of two stages: 1) application of base weights and 2) calibration to population parameters. Each subgroup was calibrated separately, then the groups were put into their proper proportions relative to their size in the population.

Calibration to Population Benchmarks

The sample was balanced to match estimates of each of the three subgroups (females ages 18 to 35, females ages 36 to 64, and males ages 18 to 64) along the following dimensions: age; education (less than a high school graduate, high school graduate, some college, four-year college or more); region (Northeast, Midwest, South, West); and race/ethnicity (White non-Hispanic, Black non-Hispanic, Hispanic-born in U.S., Hispanic-born Outside the U.S., Asian non-Hispanic, Other non-Hispanic). The sample was weighted within race (White, non-Hispanic; Black, non-Hispanic; Hispanic; and Asian) to match population estimates. Benchmark distributions were derived from 2021 Current Population Survey (CPS) data.

Weighting summaries for females ages 18 to 35, females ages 36 to 64, and males ages 18 to 64 are available upon request.

Finally, the three weights were combined, and a final adjustment was made to match the groups to their proper proportions relative to their size in the population (Table 1).

Margin of Sampling Error

The margin of sampling error, including the design effect for subgroups, is presented in Table 2 below. It is important to remember that the sampling fluctuations captured in the margin of error are only one possible source of error in a survey estimate and there may be other unmeasured error in this or any other survey.

Design Effects and Margins of Error by Demographic Group

KFF Analysis

Researchers at KFF conducted further data analysis using the R survey package, including creating constructed variables, running additional testing for statistical significance, and coding responses to open-ended questions. The survey instrument is available upon request.

Rounding and sample sizes

Some figures in the report do not sum to totals due to rounding. Although overall totals are statistically valid, some breakdowns may not be available due to limited sample sizes or cell sizes. Where the unweighted sample size is less than 100 or where observations are less than 10, figures include the notation “NSD” (Not Sufficient Data).

Statistical significance

All statistical tests are performed at the .05 confidence level. Statistical tests for a given subgroup are tested against the reference group (Ref.) unless otherwise indicated. For example, White is the standard reference for race/ethnicity comparisons and private insurance is the standard reference for types of insurance coverage. Some breakouts by subsets have a large standard error, meaning that sometimes even large differences between estimates are not statistically different.

A note about sex and gender language

Our survey asked respondents which sex they were assigned at birth, on their original birth certificate (male or female). They were then asked what their current gender is (man, woman, transgender, non-binary, or other). Those who identified as transgender men are coded as men and transgender women are coded as women. While we attempted to be as inclusive as possible and recognize the importance of better understanding the health of non-cisgendered people, as is common in many nationally representative surveys, we did not have a sufficient sample size (n >= 100) to report gender breakouts other than men and women with confidence that they reflect the larger non-cisgender population as a whole. The data in our reproductive health reports use the respondent’s sex assigned at birth (inclusive of all genders) to account for reproductive health needs/capacity (e.g., ever been pregnant) while the data in our other survey reports use the respondent’s gender.

Endnotes

Respondents were asked their sex assigned at birth as well as their gender identity. This brief presents data on respondents who said they were assigned female at birth and includes all gender identities, including transgender, non-binary, and others. ↩︎
The federal poverty level (FPL) in 2022 for an individual is $13,590. ↩︎

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News Release

Most Women are in Favor of Making Birth Control Pills Available Over the Counter without a Prescription if Research Shows they are Safe and Effective

A Substantial Share of Women with Private Insurance are Paying for Some or All of the Cost of their Contraceptives Indicating Plans May Not Be Complying with the Affordable Care Act

Published: Nov 3, 2022

A new KFF survey finds that more than three-quarters (77%) of females ages 18-49 favor making birth control pills available without a doctor’s prescription if research shows they are safe and effective. Among those who favor making birth control pills available over the counter and who currently use prescription oral contraception, 60% say they would be likely to use over-the-counter birth control pills. Most say the main reason is convenience (59%).

Many females who would be unlikely to use over-the-counter birth control pills (46%) or are unsure (14%) say the main reason is they don’t currently use birth control pills nor plan to use them in the future (53%). Among those who use oral contraception, the main reason is they would prefer to talk to a provider before starting or refilling their birth control. Other reasons include concerns about safety, cost, and health insurance coverage.

While the Affordable Care Act (ACA) has required most insurance plans to cover prescription contraceptives at no cost to patients for over a decade, 41% of females ages 18-49 are unaware of this requirement. One-quarter of these females with private insurance say they paid at least part of the cost of their contraceptive care out-of-pocket. A growing number of reports note that some insurance plans are failing to comply with the ACA’s contraceptive coverage requirement, which has been scaled back through regulations and court decisions.

These survey findings come as the U.S. Food and Drug Administration decides whether to approve a progestin-only oral contraceptive pill (Opill) for over-the-counter status, making it as accessible as pain relievers and allergy medications.

Periodically conducted since 2001, the 2022 KFF Women’s Health Survey includes a nationally representative sample of 5,201 people who say they were assigned female at birth (including those who identify as women or other genders). Our analyses present the state of contraceptive access and preferences, including differences in contraceptive use and experiences by income, race and ethnicity, and insurance status.

Additional findings include:

The vast majority of females ages 18-64 (90%) have used contraceptives at some point in their reproductive years, and most have used more than one contraceptive method throughout their lifetime (76%).
Most females get their birth control care at a doctor’s office (77%) and prefer to get their care there, even as more services have become available online. Clinics and health centers remain an essential source of contraceptive care, particularly for those who have low incomes (18%) or are uninsured (23%).
One in five uninsured females say they had to stop using a birth control method because they couldn’t afford it.
One-quarter of females aren’t using their preferred method of contraception, with many raising concerns about side effects and affordability. Only 30% of females say they received all the information they needed before choosing their birth control method.
One in four females either don’t know emergency birth control pills are available over the counter or have never heard of them. Among those who have heard of emergency birth control pills and could become pregnant, three in ten (31%) say they don’t know where they could get them.

Learn more about the 2022 Women’s Health Survey findings in the report “Contraception in the United States: A Closer Look at Experiences, Preferences, and Coverage” and the brief “Interest in Using Over-the-Counter Oral Contraceptive Pills.”

Contact

Mikhaila Richards

KFF

mrichards@kff.org

Contraception in the United States: A Closer Look at Experiences, Preferences, and Coverage

Authors: Brittni Frederiksen, Usha Ranji, Michelle Long, Karen Diep, and Alina Salganicoff

Published: Nov 3, 2022

Section:

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Executive Summary

Contraceptive care is an important component of overall health care for many people. Federal and state policies shape access to and the availability of contraceptive care, but factors such as provider characteristics, as well as individual preferences and experiences also impact contraceptive choices and use. This report provides a close examination of reproductive age (18-49) females’ (including those who identify as women and other genders) experiences with contraception, insurance coverage, contraceptive preferences, and interactions with the health care system based on an analysis of the 2022 KFF Women’s Health Survey, a nationally representative survey of females ages 18 to 64 in the U.S.

Use of Contraceptives

The majority of females 18 to 64 (90%) have used contraception at some point in their reproductive years and many have used more than one contraceptive method throughout their lifetime (76%). People’s needs and preferences for different types of methods can change and speaks to the importance of having a broad range of contraceptive options available. Not surprisingly, most people use contraception to prevent pregnancy (85%), but four in ten also say that they use contraception for another reason such as managing a medical condition or preventing a sexually transmitted infection (STI).

Not all people who want to prevent pregnancy use contraceptives. One in six (17%) sexually active females who say they are not trying to get pregnant are not using contraception. There are many reasons why people may not use contraceptives, ranging from concerns about side effects, lack of desire to use a method, to those who aren’t trying but would not mind if they got pregnant or have religious reasons.

Contraceptive Coverage

Although the ACA has required contraceptive coverage for over a decade, many still do not know about the policy and some privately insured females are still paying for their contraceptives. Four in ten (41%) females of reproductive age do not know that most insurance plans are required to pay the full cost of birth control for women.

While most females (70%) with private insurance say their insurance covered the full cost of their most recent birth control method, a quarter say they paid at least part of the cost out-of-pocket. Of those who paid out of pocket, 16% say it was because they wanted a certain brand of contraception that was not covered by their plan (even though their plan should cover it if their provider recommends it for them). Others say it is because their prescribing provider (10%) or pharmacy (5%) was out of network. Half did not know why they had to pay.

Cost can be a barrier to contraceptive use for some. One in five uninsured females of reproductive age say they had to stop using a contraceptive method because they couldn’t afford it. A smaller share of those on Medicaid (6%) or with private coverage (3%) cited cost as a barrier to continued use. For low-income women, 17% said cost was the leading reason they weren’t using their preferred method.

Contraceptive Preferences and Side Effects

Overall, one quarter of females who are using contraception are not using their preferred method. The leading reason for this is concern about side effects, a theme that comes up in many aspects of contraceptive care. Almost one-third of contraceptive users (31%) say they are experiencing side effects from their current method, and just over half (52%) say the side effects are more severe than they expected.

Just 30% of females say they received all the information they needed before choosing their birth control method. This is even lower among Asian/Pacific Islander females, just 12% of whom say they had all the information they needed before choosing a method, compared to more than a quarter of Hispanic (26%) and Black (28%) females and one-third of White females (34%). Person-centered contraceptive counseling is a key element to assuring people can select the contraceptive method that suits them. However, only 40% of those receiving contraceptive care rate their most recent contraceptive counseling as “excellent.”

Accessing Contraception

The majority of reproductive age females get their birth control care at a doctor’s office (77%) and prefer to get their care there, even as more services have become available online with growing numbers of online contraception platforms. Many also rely on clinics and health centers for their care, particularly those who are low-income, uninsured, Black or Hispanic. Far fewer (7%) have received a prescription or obtained a health care service from an online company in the prior 12 months. Convenience is the main reason those who would prefer to get their birth control care from an online company cite for their preference.

Emergency contraceptive pills (EC) are an effective form of back up birth control, but a sizable minority of people who might benefit from them don’t know where to get them or that they’re available over the counter. Emergency contraceptive pills, which can be taken to prevent pregnancy after a contraceptive failure or unprotected sex, have been available over the counter for more than 15 years. One in four reproductive age females (27%) either don’t know EC pills are available over the counter or have never heard of them. Among those who have heard of EC pills and could become pregnant, three in ten (31%) don’t know where they could get it.

Not only was there a lack of awareness about where to get emergency contraceptive pills, but even before the Supreme Court overturned Roe v. Wade, few knew where they could get an abortion if they needed one. Prior to the ruling in Dobbs, just one-quarter (26%) of females ages 18-49 said they knew what clinic or health care provider they could go to for an abortion if they wanted or needed one. Smaller shares of females living in rural areas, where services are more limited, knew where they could go to get an abortion compared to females living in more urban areas (16% vs. 28%).

Access to abortion and contraception continues to remain at the center of policy debates across the nation. Not only has abortion access been banned in many states, but access to effective methods to prevent pregnancy, like emergency contraceptive pills and long-acting reversible contraception (such as IUDs), may also become restricted. Doctors and health care providers are trusted sources of information for many people, which means they could play an important role in filling information gaps and addressing misinformation. While the ACA preventive services coverage requirement has markedly improved the affordability of contraceptives, the policy is being challenged yet again in the courts by those who object to preventive services such as contraception on religious or moral grounds. The outcomes of these debates, along with state, federal and private sector actions will continue to shape the availability and use of contraceptive care for millions in the years to come.

This work was supported in part by Arnold Ventures. KFF maintains full editorial control over all of its policy analysis, polling, and journalism activities.