The scheme provides free health care to uninsured state residents whose income is up to 200% of the federally designated poverty line, and provides discounts which gradually phase out at incomes between 200% and 300% of the poverty line; the patient's liquid assets (not including the patient's home and one automobile) must not exceed $7,500.
A special fund was designed to compensate the health care provider—which may have furnished either inpatient or outpatient services—for the applicable difference in cost.
Some private health care providers in other states—particularly those that are operated on a nonprofit basis (often by religious entities)—also provide free and/or low-cost health care to uninsured patients, using income thresholds similar to those observed statewide in New Jersey; but state laws vary widely as to how much, if any, reimbursement (usually in the form of tax credits) the institution receives for so doing (and in only one other state besides New Jersey—Washington—does an outright mandate exist to provide charity care).
Perhaps the most famous example of such an institution was the Charity Hospital of New Orleans, founded in 1732 and now run by the Medical Center of Louisiana, now closed due to damage from Hurricane Katrina.
In 2007 the community hospitals in Washington State agreed to uniform standards for providing free and reduced cost care to low-income individuals.