The rule, in one sentence
When a New York hospital sets up a payment plan, the monthly installment may not exceed 5% of the patient’s gross monthly income, and interest may not exceed 2% a year. This comes from the 2024 amendments to Public Health Law section 2807-k, the statute that governs hospital financial assistance, effective October 20, 2024. It applies to every hospital licensed in the state, including private and for-profit hospitals.
Gross means before taxes and deductions. If you are paid weekly, multiply by 52 and divide by 12; if you are paid every two weeks, multiply by 26 and divide by 12.
Your cap, worked out
The math runs in your browser and nothing is stored. It applies the published rule; it is not the hospital's decision.
| Gross monthly income | Highest monthly payment | Months to clear a $2,400 balance at that payment, no interest |
|---|---|---|
| $1,500 | $75 | 32 |
| $2,000 | $100 | 24 |
| $3,000 | $150 | 16 |
| $4,000 | $200 | 12 |
| $5,000 | $250 | 10 |
| $6,000 | $300 | 8 |
The cap is a ceiling, not a target. You can always ask for a lower payment; the law only stops the hospital from demanding a higher one.
Ask for financial assistance first
The payment plan is the last step, not the first. For most New York households the bill itself is reduced by law before anything is spread out:
| Household income, share of the federal poverty level | What an uninsured patient can be charged |
|---|---|
| At or below 200% ($31,920 a year for one person, $66,000 for four, in 2026) | Nothing |
| 201% to 300% | No more than 10% of the Medicaid rate |
| 301% to 400% ($63,840 for one person, $132,000 for four) | No more than 20% of the Medicaid rate |
Insured patients qualify for the same tiers on their own share when out-of-pocket medical costs over the past 12 months exceed 10% of gross income. The hospital must decide within 30 days of a complete application, and while it is pending the account may not go to collections. Check where you fall, then apply.
A payment plan agreed before the application is still not the end of it: New York lets you apply for financial assistance at any stage. If the hospital later reduces the bill, ask in writing for the plan to be recalculated on the new balance.
What to say, and what to get in writing
- Open with financial assistance. “Before we talk about a payment plan, I’d like to apply for financial assistance. Please send me the uniform application and note that an application is pending.”
- Once the decision is in, ask for the plan by its rule. “Please set up a payment plan at no more than 5% of my gross monthly income, which is [amount]. That makes the installment [amount].”
- Ask about interest directly. “What interest rate applies? I understand it can’t exceed 2%.”
- Get the plan in writing: the balance, the monthly amount, the number of payments, the interest rate and what happens if a payment is late.
- Refuse anything that changes who you owe. No credit card on file, no medical credit card, no third-party loan. Those convert a protected hospital bill into ordinary consumer debt.
Where the cap does not reach
Other providers. The 5% and 2% limits are part of the hospital financial assistance law. A physician group billing under its own name, an independent lab or an imaging center is not bound by them. They are still covered by New York’s other medical debt rules: no wage garnishment, no lien on your home, a three-year limit to sue, and no credit reporting by licensed providers. Ask them for a plan anyway; most say yes. Every rule and whom it binds.
Out-of-state hospitals. A hospital outside New York follows its own state’s law.
Prescription costs. The Medicare Prescription Payment Plan spreads Part D drug costs across the year without lowering them. It is a different program, run by your drug plan. Medicare in New York.
Questions people ask
How much can a New York hospital make me pay each month on a payment plan?
No more than 5% of your gross monthly household income. On $3,000 a month, that is $150. The rule has applied to every hospital in the state since October 20, 2024.
Can a hospital charge interest on a payment plan in New York?
Yes, but no more than 2% a year.
Should I set up a payment plan or apply for financial assistance first?
Financial assistance first. Up to 400% of the federal poverty level the law reduces the bill, to $0 at or below 200%, and a pending application stops collections. Spread out only what is left.
Can a hospital refuse care unless I put a credit card on file?
No. New York bars hospitals and providers from requiring a card on file or a pre-authorization as a condition of care.
Do doctors’ offices have to follow the 5% cap?
No. The cap is part of the hospital financial assistance law. Physician groups and labs can set their own terms, though most agree to a plan when asked.
What happens if I already agreed to a higher payment?
Write to the billing office, state your gross monthly income, and ask for the installment to be reset to no more than 5% of it. Apply for financial assistance at the same time; you can apply at any stage.
Sources
- New York State Attorney General — Hospital financial assistance (checked 2026-10-07)
- NYS Department of Health — Dear CEO letter DAL 24-01 on the 2024 financial assistance amendments (October 18, 2024) (checked 2026-09-07)
- Health Care for All New York — what the medical debt protections mean (checked 2026-09-07)
More in Medical Debt in New York: What Collectors Can and Cannot Do
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- Medical Debt on Your Credit Report in New York: What the Law Says and What Actually Happens — New York has banned credit reporting of medical debt by hospitals and providers since December 2023. A federal court fight clouds that. How to dispute an entry.
- Medical Debt and Bankruptcy in New York: When It Matters and What to Try First — Most New York medical bills never need bankruptcy: hospitals cannot sue under 400% FPL or garnish wages. When filing matters, and free help in NYC.
This page explains how the system works. It is not medical advice. More.