Healthcare credit cards–
boon or boondoggle?
THE CONCEPT OF CREDIT has always been
tricky, ever since the first transaction in the history
of trade was completed. Spending money we don’t
have and accruing interest has created an era of
credit that has sent our economy into a free fall.
While credit does serve an important purpose in
our consumer-based economy, it is more important
than ever to pay attention to the fine print involving
those little plastic cards.
The latest issue has taken me by surprise.
Often, as you leave your dentist’s office, the nurse
hands you a bag with a toothbrush and toothpaste.
Now thousands of dentists are tossing “healthcare
credit cards” into those bags; these cards offer a
means to cover work that needs to be done, with
hard-to-resist repayment terms. If you need care
and don’t have insurance to cover it or cash in
hand, it can be tempting to sign up. You can even
use a card to pay for procedures you previously
But this is where you need to be careful.
Many of these card companies and the practitioners who promote them are currently under
scrutiny for deceptive and fraudulent practices.
New York Attorney General Andrew Cuomo
recently announced an investigation into the
healthcare lending industry, a probe that grew out
of hundreds of complaints from people who had
used the cards for dental work and for other elective
medical treatments often not covered by insurance,
such as cosmetic surgery, chiropractic treatments,
Lasik eye surgery and hearing procedures.
According to investigators and patient advocates who have worked with consumers to resolve
problems, patients frequently aren’t aware that
they’re applying for a credit card; many think
they’re providing financial information to work out
an extended payment agreement with their doctor
Once a patient uses the healthcare credit card,
unpleasant surprises may await. Many cards prom-
ise interest-free borrowing as long as consumers
pay off the amount owed within a specified time—
say, six months or a year. But consumers who don’t
pay off their debt within that time frame often get
hit with interest charges exceeding 25 percent on
the entire amount, back to the original date they
purchased the services. Other consumers have dis-
covered they’ve been charged thousands of dollars
for work that hasn’t yet been done.
Advocates encourage scrutiny
New credit-card regulations that became effective this month limit the size of late fees and restrict
interest-rate increases on balances. But the regulations continue to permit “teaser” or promotional
rates, an incredibly effective tactic in getting people to sign.
Patient advocates are concerned that practition-
ers are taking advantage of patients’ trust at a time
when they need help and may be in pain. “Some of
the people we’ve worked with feel pressured to
apply,” says Mark Rukavina, executive
director of The Access Project, a
Boston-based nonprofit that helps
consumers solve medical-debt
problems. “They need the services,
and the provider is really encourag-
ing them to use these medical
As healthcare costs con-
tinue to rise and more peo-
ple struggle to cover their
medical bills, using plastic
may seem like a good
solution. Instead, asking
for an extended payment
plan from your doctor or
insurance company is a
much smarter, and safer,
way to pay for your
Of course, the safest
and smartest way to monitor your money and avoid
potential problems such as
the healthcare credit card
is, whenever possible, not
to buy on credit; instead,
pay with money you know
you have in the bank. C
IN MAY, I lost my job and
moved residences. Then I
received a call in July saying
I was being dropped by
Ceridian for lack of payment,
despite the fact that I did
not receive my bill because
they sent it to the wrong
address. Had they quoted
me the accurate price over
the phone (my COBRA plan
switched from Conexis to
Ceridian, and in the process
there was a price change)
and had it been a smooth
transition when they
changed companies, I would
be covered. I am now unemployed and without health
coverage. Is there anything
you can do to help?
I advise you to
your state insur-
a concept many
take into account.
inform the Depart-
ment of Labor. Note:
It turned out that the
failed to give Noah
proper notice that he
would be dropped, and,
to Noah’s surprise, he had
been overpaying for years.
In the end, Noah was
retained by the insurance
company and given full
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