The bureau says the number of these products being offered to consumers is growing.
05/08/2023 2:25 P.M.
1 minute read
The Consumer Financial Protection Bureau has released a new report on financing mechanisms for consumers’ out-of-pocket health care costs.
The report, “Medical Credit Cards and Financing Plans,” focuses on “alternative financing products” the bureau says are being generated at a growing rate by financial institutions and fintech companies.
“Medical payment products can offer the promise of cost savings, payments within a few days, administrative ease, and a way to minimize financial risk,” said CFPB Director Rohit Chopra in a speech before the American Association of Healthcare Administrative Management the day the report was released. “But our research illustrates that patients can be worse off.”
The CFPB found that consumers have used “specialty medical credit cards or loans with deferred interest periods to pay for almost $23 billion in health care expenses for more than 17 million medical purchases from 2018 to 2020,” according to a news release on the report.
The report findings include:
- Medical financing companies market their products directly to health care providers.
- Patients need guidance on terms and risks.
- Patients can get stuck with ballooned deferred interest and lawsuits.
It also identifies background on these financing products, shows potential lack of transparency and financial risks to consumers, reviews data on deferred interest health care credit cards, and offers a summary of the terms for a sample of financing products.
Read the complete report (PDF) here.
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