Four years ago, Cori Roberts was living in a rented basement in St. Cloud, Minnesota, when she received a diagnosis that would upend her life: early-stage cervical cancer. A recently divorced former stay-at-home mother, Roberts had returned to the workforce in her mid-40s, taking a human resources position that paid $41,000 a year. Despite having health insurance, the cost of her care culminated in more than $8,000 in medical bills.
For someone living on the edge of financial stability, the debt was insurmountable. Roberts sought financial assistance from CentraCare, the nonprofit health system that treated her. In the United States, nonprofit hospitals receive millions of dollars in federal, state, and local tax breaks. In exchange, they are legally and ethically obligated to provide “community benefit,” which often takes the form of charity care for patients who cannot afford their bills.
But CentraCare told Roberts she earned too much to qualify. For two years, she scrimped on groceries and skipped Christmas gifts for her children to pay down more than $6,000 of the debt. Despite these efforts, CentraCare sued her last year over the remaining balance. Roberts eventually settled the debt, but only after taking out a loan against her retirement plan—a move that traded a current crisis for future insecurity.
Roberts’ experience is not an isolated incident. A collaborative investigation by KFF Health News and the Minnesota Star Tribune reveals a systemic failure in how charity care is administered in Minnesota, where hospitals are among the least charitable in the nation. The findings suggest a widening gap between the tax advantages these institutions enjoy and the actual relief they provide to the underinsured and the working poor.
The Gap Between Tax Breaks and Patient Aid
The investigation, which analyzed five years of financial data and reviewed every hospital charity care program in the state, found that Minnesota hospitals provide significantly less financial aid as a percentage of their operating budgets than hospitals in nearly every other state. Nationally, hospitals spend an average of approximately 2.4% of their operating budgets on charity care, according to data compiled by Hossein Zare, a researcher at Johns Hopkins University.
In Minnesota, that average drops to roughly one-third of the national figure. The disparity is even more stark at the individual facility level. Of Minnesota’s 123 general hospitals, 62 devoted less than 0.5% of their operating budgets to charity care between 2020 and 2024. CentraCare’s flagship St. Cloud Hospital spent less than 0.25%—which equates to just $25 in patient aid for every $10,000 spent on general operations.
| Entity | Charity Care Spending (% of Operating Budget) |
|---|---|
| National Average | ~2.4% |
| Minnesota Average | ~0.8% (Approx.) |
| St. Cloud Hospital (CentraCare) | < 0.25% |
Minnesota Attorney General Keith Ellison has raised concerns about this imbalance. He argues that the nonprofit status granted to these hospitals is a public subsidy that should result in a tangible public benefit. “There is a benefit you get from being a nonprofit hospital in the state of Minnesota,” Ellison stated. “But do the people get the benefit?”
A Gauntlet of Paperwork
Beyond the low spending levels, the investigation highlighted significant barriers that discourage patients from even applying for aid. Because Minnesota has not standardized the criteria for charity care, eligibility is often a postcode lottery. Some hospitals provide free care to those earning up to $47,000 annually, while others cap eligibility at $15,000.
the application process at many facilities is designed more as a deterrent than a gateway. While paying a bill online is often a one-click process, applying for charity care can require a mountain of documentation. Many hospitals demand:
- Detailed bank statements and retirement account balances.
- Mortgage documents and property valuations.
- Estimates of assets, including the make, model, and value of vehicles.
- In some cases, the market value of livestock and farm equipment.
At Hendricks Community Hospital, near the South Dakota border, the application includes 53 detailed questions about a patient’s finances. Jared Walker, founder of the nonprofit Dollar For, notes that these burdensome requirements lead to high “drop-off rates.” Hospitals have optimized the systems for collecting payment, but they have not applied that same efficiency to distributing aid.
The Rural Hospital Dilemma
Hospital executives defend these practices by pointing to the precarious financial state of the healthcare industry, particularly in rural areas. They argue that “community benefit” extends beyond forgiving bills to include training medical staff and maintaining essential but money-losing services, such as mental health care and obstetrics.
Robert Pastor, CEO of Rainy Lake Medical Center in International Falls, describes rural hospitals as operating on “razor-thin margins” while facing escalating labor costs and underpayment by public programs. He argues that the portrayal of hospitals as sitting on piles of cash is a misconception, noting that while insurers post billions in profits, rural providers struggle to keep their doors open.
This creates a tension between the institutional survival of the hospital and the financial survival of the patient. For patients like Roberts, however, the sight of a $200 million campus expansion at CentraCare’s Plaza campus makes the claim of financial strain difficult to reconcile with the denial of a few thousand dollars in aid.
A National Crisis of Medical Debt
The scarcity of charity care arrives at a critical juncture. Healthcare debt is a systemic crisis in the U.S., burdening an estimated 100 million people. While charity care was historically designed for the uninsured, it has become a lifeline for the “underinsured”—people who have coverage but cannot afford the rising copays and deductibles associated with modern health plans.
With the uninsured rate ticking upward and potential budget cuts to Medicaid and other safety-net programs, the reliance on hospital charity care is expected to grow. When these programs are inaccessible or overly restrictive, the burden falls on the most vulnerable, often leading to medical bankruptcy or the depletion of retirement savings.
Disclaimer: This article is for informational purposes only and does not constitute legal or financial advice. Patients struggling with medical debt should consult with a qualified legal professional or a certified financial counselor.
The next phase of this issue likely rests with state regulators and the Attorney General’s office, as pressure mounts for Minnesota to standardize charity care eligibility and ensure that nonprofit hospitals are meeting their community obligations. Whether the state will move toward mandatory transparency or standardized income caps remains the primary point of contention for patient advocates.
Do you have experience navigating hospital financial aid? Share your story in the comments or share this article to raise awareness about medical debt.
