August 04, 2010
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News: Healthcare Credit Cards A Bad Deal
A number of health care providers have received subpoenas to release records pertaining to credit cards they recently assisted patients in opening., New York's Attorney General Andrew Cuomo is looking into the connections between health care providers and a growing phenomenon in the financial industry; healthcare credit cards. Complaints have indicated that a number of healthcare providers such as dentist, plastic surgeons, chiropractors, and veterinarians have been pushing the so called "healthcare credit card" leaving patients hanging with high debt and exurbanite interest rates. Cuomo said that these healthcare providers are trying to wear two hats, profiting from both.
Cuomo's office intends to look into the terms between the healthcare providers and the credit card companies. The largest provider is GE Money, however, also claiming a piece of the market is Chase Health Advance, Visa Health Benefits and Citibank Health Card. Investigators will be examining the contracts between the healthcare providers and the credit card issuers to determine the extent of the incentives that might prompt some of the companies to push the service unnecessarily. Such items such as start-up fees, commissions, interest rates, and other fees will be scrutinized. Providers that are currently promoting the card are also being asked to explain why they support its use. The American Dental Association and the American Society of Plastic Surgeons have also received notice from the Attorney General's office asking them to explain why they support the healthcare card.
According to some of the complaints, consumers did not understand that they were signing up for a new credit card and most had never been informed of the terms and conditions of the card. Others thoughts the healthcare provider was issuing the credit. Of major concern is the large number of individuals who were not able to pay the high interest fees and ended up in bankruptcy court. "Health care debt is the number one cause of individual bankruptcy and this scheme is contributing to the economic burden being felt by consumers," Cuomo said. There is also speculation that some healthcare providers have even promoted the card when the patient was capable of paying cash.