Findings from a recently published Consumer Financial Protection Bureau (CFPB) report maintain specialty products that include medical credit cards are typically more expensive for patients than other forms of payment.
“Fintechs and other lending outfits are designing costly loan products to peddle to patients looking to make ends meet on their medical bills,” CFPB Director Rohit Chopra said. “These new forms of medical debt can create financial ruin for individuals who get sick.”
According to the CFPB, the report determined that medical credit card interest rates often exceed 25 percent. Patients are typically offered the products in a medical provider’s office when their insurance may cover the procedure or they qualify for a hospital’s reduced or no-cost financial assistance program.
The research revealed medical financing companies market their products directly to healthcare providers, patients need guidance on terms and risks, and patients can get stuck with ballooned deferred interest and lawsuits.
According to the CFPB, consumers used specialty medical credit cards or loans with deferred interest periods to pay for almost $23 billion in healthcare expenses for more than 17 million medical purchases from 2018 to 2020 – adding payment products are used for a wide range of basic medical care that includes emergency room visits, medications, and lab work, in addition to dental and vision visits and treatment.