Elective Surgery Risks Include Wallet Suction

December 8th, 2010. By Hunter West

Medical credit cards… 

Charge it…but more than the fat may be missing post-op

Have you heard about these things? 

They’re designed for those elective procedures not covered by health insurance or Medicaid. It might even be a procedure you don’t even really need, such as laser eye surgery, or cosmetic dentistry. A facelift. 

You may not have the money for it. And you may not have the room on your existing credit cards. But now you can apply for a medical credit card issued by a number of providers with the express use of funding medical procedures. 

But buyer beware… 

As a recent article in The New York Times points out, medical credit cards can dig you into an even deeper financial hole if you’re not careful. The other problem, according to the November 26^th issue of Patient Money in The New York Times, is that such cards have been designed, oddly enough, for those individuals who probably don’t need them. 

However, it is the individual who really can’t afford the risks associated with the medical credit card, that is most inclined to find them attractive. 

The first thing to remember is that a medical credit card is just one payment option for an elective service. For this reason, they are marketed not necessarily to the consumer, but to the service provider—who in turn can swing around and offer the card to an individual as a handy way to pay for a procedure. 

But there are some red flags. 

First of all, health care is a business. Service providers who specialize in procedures usually not covered by health insurance want to get as many people through their door as possible. Hence, to them, yet another seemingly pain-free payment option that may well persuade someone who’s on the fence with regard to having that tummy tuck or caps put on their teeth, to take the leap. 

Secondly, a medical credit card is a CREDIT CARD in the truest sense of the word. There is an interest rate. And it may not be the cheapest way to fund a procedure. Some cards are promoted as having a low interest rate—or even an interest rate posted at zero, which gives the consumer a false sense that financing the procedure can be quite inexpensive. 

But more often than not, it’s just a promotional rate. Once the promotion window expires, the interest rate can jump to as high as 26.99 percent. 

Some patients have reported feeling pressured by their service provider to sign up for a medical credit card. That shouldn’t happen—but you can understand the motivation, given accusations flying around that some medical credit card companies offer incentives to service providers for signing people up. 

Sometimes there is fraud. In Minnesota, state attorney general Lori Swanson has filed a lawsuit against a chiropractor alleging that staff told patients the document(s) they were signing was for a credit check, when in actual fact [allegedly] the paperwork was for a medical credit card application submitted in the patient’s name. The lawsuit also alleges that yearly income levels were also falsified in order to assure the patient(s) qualified for the card. 

In New York, state Attorney General Andrew M. Cuomo launched an investigation into medical credit cards earlier this year. 

There is also a problem with lump-sum payments. Often a service provider will charge a medical credit card with the entire cost of a procedure up front, regardless of the time it takes for the procedure to roll out. Dental implants, for example, which can involve bone grafting, can be spread over several procedures and can take upwards of a year to complete. If the patient changes service providers, or has to abandon the procedure midway through for some reason, it is often difficult to get a refund. 

For some, medical credit cards could be the way to go. It’s a payment option, which, for those with resources, could make the most sense. But for the remainder, a cautioned approach is warranted. Do you even need the procedure? Or are you simply being tempted by seemingly easy ways to pay for it? 

And before opting for (or being pressured into) a medical credit card, explore the alternatives. 

One thing is for sure. It’s big business. A report from McKinsey & Company noted that about $45 billion worth of health care costs in this country are put through on plastic. 

In four years, that figure is supposed to more than triple to an estimated $150 billion. Don’t think the credit card companies aren’t rubbing their hands with glee, and will do anything to get you signed up… 

Hell, it’s like an IV line that slowing siphons funds from your wallet. 

Think before you act…

Tags: Elective Surgery, Medical Credit Card

This was posted on Wednesday, December 8th, 2010 at 4:51 pm and is filed under Drugs/Medical . Feel free to respond, or trackback. Read our comments policy.