SALT LAKE CITY — A new report from the Consumer Financial Protection Bureau points to a growing trend that may appeal to people during vulnerable times, but can be dangerous for wallets: medical credit cards and medical installment loans.
Patients are usually offered the products at a medical provider's office even when their insurance can cover a procedure or if they qualify for the hospital's reduced or no-cost financial assistance program.
The report shows the payment methods tend to be more expensive for consumers than other forms of payment, including regular credit cards. The interest rates on these cards or installments can vary anywhere from 16-27 percent.
Finance companies market the products to healthcare providers and give them the training and promotional tools to use when presenting the products to patients.
The CFPB is concerned healthcare providers may be deterred from offering legally mandated financial assistance programs or zero-interest re-payment options in addition to the medical credit cards.
“The medical provider gets paid right away for whatever service they provide, so there are features of these products that make them increasingly liked by medical providers,” says Tavi Carare with CFPB’s research team. “The medical providers themselves may have an incentive to offer these products.”
The CFPB says between 2018-2020, consumers used specialty medical credit cards or loans with deferred interest periods to pay for almost $23 billion in healthcare expenses. Their advice for patients is that before they sign off on anything, ask questions including "Is this a credit card?"
Patients should also make sure they understand the length of the promotional period if options are offered.