By Kiplinger

Filed under: Health Care, Credit Cards, Healthcare Industry

You already trust your health care providers with your physical well-being. Should you also trust them with your financial health?

That’s the question consumers are facing as a growing group of health care providers give patients the option to charge their treatment costs on so-called medical credit cards. These cards, offered by major financial-services firms such as Citigroup, GE Capital and Wells Fargo, are designed for consumers paying out of pocket for dental, vision, audiology and other treatments not covered by patients’ insurance. These cards also can cover veterinary costs for your pet.

Many patients sign up for these cards in their health care provider’s office. The cards typically offer “deferred interest” payment options that promise consumers will avoid paying interest as long as they pay the full balance within a certain time frame, often six months to two years. Most regular credit cards assess interest charges much sooner.

Such cards may sound like the perfect solution for seniors slapped with, say, a $3,000 dental bill that Medicare or private insurance won’t cover. But consumer advocates and state attorneys general are raising a host of concerns.

Among potential problems are confusing features of the deferred-interest payment options that can cause consumers to rack up huge interest charges. In some cases, there’s also the potential for consumers to be charged upfront for treatments they never receive. And paying promptly with plastic may mean that patients lose the opportunity to negotiate prices with health care providers-a move that could save them much more money than a zero-interest payment plan.

Patient advocates also question whether such products should be promoted in a doctor’s office. Often, in a health care setting, “you’re dealing with people in the most vulnerable state,” says Mark Rukavina, principal at consulting firm Community Health Advisors, in Chestnut Hill, Mass. “Most people go into a health care provider with pain and concern, and they’re not there to make a financial-services decision.”

Medical credit cards have gained steam as health care costs spiral higher and many patients find themselves paying a greater share of costs out of pocket. The cards attract health care providers because they can encourage more patients to move forward with treatments and offer immediate payment for services. GE Capital’s CareCredit card, for example, is now accepted by roughly 160,000 providers, up from fewer than 150,000 in 2011. Providers pay a fee to offer the cards. A 2010 investigation by New York‘s attorney general found that CareCredit paid providers rebates based on the amount consumers charged on the cards. CareCredit spokesperson Cristy Williams says “there’s no longer any type of rebate program.”

Untangling the No-Interest Option

Many patients, meanwhile, are attracted by the cards promising no interest charges when balances are paid in full within a specific time frame. These plans typically require minimum monthly payments. If consumers don’t …read more
Source: FULL ARTICLE at DailyFinance