Medical credit cards, installment loans can ‘increase financial burden on patients,’ report finds
When people are unable to pay their medical bills, research shows this can deter them from seeking needed healthcare in the future
(InvestigateTV) — When people are unable to pay their medical bills, research shows this can deter them from seeking needed healthcare in the future
Healthcare providers in recent years have broadened the scope of medical credit cards and loans to help patients alleviate medical costs for basic treatments and emergency healthcare.
But according to a new report by the Consumer Financial Protection Bureau (CFPB), these loans and credit cards are typically more expensive for patients than conventional credit cards and often have interest rates often reaching above 25%.
Tavi Carare with the CFPB said it’s important patients know what they’re signing up for before leaving the doctor’s office.
“There are risks to the consumer, that include higher costs to the consumer from using these products,” Carare explained. “I think it’s really important for consumers to be informed and for the public at large to be informed.”
According to the CFPB’s report, people paid $1 billion in deferred interest payments for these healthcare charges between 2018 and 2020. And most of the people with the highest interest rates tend to be patients already struggling with low credit scores.
“So, this is certainly a concern, and I think it’s by and large true that the terms of credit that some consumers see for these products are a lot more costly than the alternative products, such as general purpose credit cards or financial assistance,” said Carare.
The CFPB has advice for those seeking to finance medical debt:
- Find out the interest rate for medical credit cards or loans before you visit the doctor
- Consider using an existing credit card that has a low interest rate
- Ask the providers about their financial assistance policies or charity care
The CFPB has an entire section of their website dedicated to medical debt including topics on:
- Knowing your rights and protections regarding medical bills and collections
- The No Surprises Act regarding unexpected medical bills
- Unlawful medical debt collection
- Navigating medical bills
There is also a place to submit complaints about any medical debt issues or collection practices.
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