Providers, Companies Offer Medical Credit Cards
Health care providers in states such as Texas and North Carolina are pairing with financial institutions to offer medical credit cards to patients to pay their medical bills, the Boston Globe reports. Medical credit cards can reduce the need for bill collection for doctors and hospitals, but the cards' potentially high interest rates can cause financial difficulties for low- and middle-income patients, according to the Globe.
Citibank's Citi Health Card is offered to patients through participating health care providers. The card offers monthly payments as low as $10 and includes a no-interest option for patients who pay down their medical debt quickly through higher monthly payments.
Patients who do not meet the terms of that plan pay more than 20% in annual interest on their balance.
Hospital chain Tenet, in partnership with UnitedHealth Group, has implemented a pilot program in Texas that offers a line of credit to employees to help address their escalating medical debts. Under the program, workers' copayments for health care services are paid through automatic payroll deductions.
Tenet spokesperson Steven Campanini said the company hopes the credit program will help stem "the rising bad debt that is generated at a hospital from patients who are not paying their portion of the medical bill." Meanwhile, a growing number of U.S. residents are using traditional credit cards to pay for medical services.
A survey released last week found that 20% of low- and middle-income households with medical debt on average had $3,700 more in credit card debt than households without medical debt.
"The health care safety net is made of plastic -- it's called 'credit cards' for many people," according to Mark Rukavina, director of Access Project, which conducted the survey. He added, "It's a pretty frightening prospect" (Rowland, Boston Globe, 1/22).
"It's one thing to reach for your Visa or MasterCard to pay for a Barbie doll or flat-screen TV," but it is "way different to pull out the plastic because you've just learned you have cancer or heart disease," columnist Bob Herbert writes in a New York Times opinion piece. For low- and middle-income people, using high-interest credit cards to pay for needed medical services can be "the final push into bankruptcy" and "only adds to the trauma of serious illness," according to Herbert.
He states that the U.S. health care system and the "American way of debt" are both in need of reform, concluding, "At the very least, in the short term, we need to protect financially vulnerable patients from a credit card universe in which there are no legal limits on fees or interest, and where the abuse of customers is the norm" (Herbert, New York Times, 1/22).