8/16/2011 12:23 PM ET|
Is your doctor a credit card pusher?
Health care cards and lines of credit are popular among health care providers, who may offer them to patients seeking elective procedures. But they can pose problems.
Credit card issuers are stepping up their marketing of health care cards and lines of credit that help borrowers finance costly elective medical procedures. The cards, which typically boast initial interest rates of 0%, are targeted to clients of plastic surgeons, dentists and even veterinarians.
Though they help some people pay for important procedures, the cards come with a number of drawbacks that may not be apparent at sign-up, including rates that can quickly spike.
Some big firms are ramping up their offerings. Citigroup offers the Citi Health Card, while JPMorgan Chase pitches ChaseHealthAdvance, a line of credit aimed at helping customers finance elective health procedures such as corrective eye surgery. Even General Electric's GE Money unit offers a card, called CareCredit.
In the past two years, such specialty cards have swelled in popularity among health care providers, driven, in part, by baby boomers to finance devices like hearing aids and expensive procedures not covered by insurance, says Gina Calabrese, a professor at St. John's University School of Law in New York.
The card issuers don't disclose their outstanding loan volume, but GE's CareCredit card -- the field's largest -- is accepted by roughly 140,000 health care providers, a 40% increase from three years ago.
A growing number of patients at plastic surgeon Jeffrey Spiegel's office in Boston, for example, have started using the CareCredit card to finance procedures like Botox, says Kelly Bennett, the practice's coordinator. Veterinary Emergency and Referral Group, a specialty animal hospital in Brooklyn, N.Y., gives patients who balk at expensive treatments for pets the option of paying on a CareCredit card.
In part, the card issuers are taking advantage of gaps in health insurance policies for procedures like dental implants, corrective eye surgery and cosmetic surgery. By 2015, patients could be forking over roughly $150 billion in out-of-pocket health care costs, according to consulting firm McKinsey, up from an estimated $45 billion in 2010.
Citigroup's card allows patients to start treatments immediately instead of having to delay expensive procedures, says spokeswoman Elizabeth Forgarty, adding that the card's growth has been "robust." JPMorgan Chase's line of credit "offers consumer financing for medical needs and health care needs that may not be covered by insurance," spokesman Steve O'Halloran says.
For providers, the cards promise relief from billing headaches and the expense of wrangling cash from patients. The cards also can drive up business, since they allow patients to finance expensive elective procedures they might otherwise forgo.
But for some patients, the cards can lead to medical-billing nightmares, according to Minnesota Attorney General Lori Swanson, who says her office has seen a surge in complaints about the cards over the past year.
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I always pay my Doctors with a credit card. I usually get a discount for paying right away, plus I get at the minimum 1% cash back. Then when the bill comes in I pay it off.
The big banks like to play games with their credit card, read and understand the rules and you can win at their game. There are risks, such as if you can't pay the bill off at the end of the month.
I have used CareCredit for both dentalwork and lasik. It provided a line of credit to pay for these specifc services without interest for a specified time period. The terms are clearly marked on the bill. It is perfectly reasonable to to have a free interest period. If one does not pay it off in time or misses a payment, you get hit with the higher rate based on the starting balance. No issues with this, and I plan to use it again in the future. If people would only take responsiblity and read before signing to understand the terms. None of this whining ... Those who fail to read or forget the terms, too bad. If you complain, you are on the same level as that McDonalds chick spilling the hot coffee and suing.
Bulldogbog & old man 76,
Are you suggesting that somehow medical professionals are less entitled to be paid? Or should they only accept cash? Or the client must have insurance that covers the entire cost?
I don't get it.
Great, another debt bubble to worry about. Am I the only one seeing this as another round of artifically driving business on credit while playing pass the IOU? Did we not learn from the housing crash?
Oh right, that would mean doctors would face doing less business, or have to face lowering prices to what paitents could afford if they wanted to keep working. It's so much better to convince people to go into debt, just so long as it's someone lese they'd owe the money to.
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