In New York state, the attorney general has launched an investigation into medical credit cards. These cards, which generally have very high rates, are sold to patients that need cash now, generally right in the doctor’s office. These cards are sold as an instant loans advance to settle bills, rather than an actual credit card.
The workings of medical credit cards
Medical credit cards are a product offered by a couple of financing corporations. The financing is intended for medical bills, but it also charges a very high interest rate. The medical provider is generally paid within a couple of days of the credit card charge and gets a rebate (aka extra cash) based on how much is charged on the card.
Investigating medical credit cards
For some patients, medical credit cards appear to be the easy answer. Alleged deceptive practices have led to an investigation into these cards by the New York Attorney General. The high interest rates on these cards aren’t always fully disclosed at the time people apply for the card. The Attorney General has stated that the investigation is to the deceptive marketing and kickbacks involved with these cards. Some doctors may be violating their ethical or lawful responsibilities by pushing financial products.
The very high cost of medical care
Though the new health care bill has various provisions that are intended to address the high cost of medical care, many changes have not yet taken effect. Health care debt is the leading cause of personal bankruptcy within the United States. The credit card marketing for these products are set up in a way that they’re intended to be a no credit loan product that will pay the bills. The end result is that the high interest rates compound the debt problem. Medical credit cards grew out of the belief that medical bills are a huge concern – and until medical costs are addressed, products like this will exist.
