For many Americans, a credit card geared solely toward paying for medical care may seem like a good option and a way to pay off healthcare costs in one lump sum, while making installment payments later. But New York Attorney General Andrew Cuomo is speaking against these products, saying that they are not in the best financial interest of consumers and may lead to sizable debt.
Health-related credit cards are being issued by most big-name issuers, many of whom offer "kickbacks" to physicians who encourage a certain number of patients to secure the card in a given amount of time, according to American Medical News. However, many of the cards offer zero percent introductory rates that are then retroactively increased to upwards of 25 percent if a consumer does not pay their bill in full in a certain amount of time, the publication reports.
Cuomo launched his first investigation into GE Money's CareCredit card in December following a number of consumer complaints that they were charged exorbitant interest rates after securing the product, the medical news publication said.
"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. "People are being tricked by misleading offers that have them paying for services they never received as well as interest charges they never knew about - and they are ignored and given the runaround when they try to get their money back."
Medical debt can be extremely burdensome and lead to severe credit score damage if the unpaid balance is sent to collections or forces the consumer to declare bankruptcy. Patients facing large amounts of debt may benefit from contacting their insurance company, physician and hospital to determine the various types of payment options that are available.
Consumers should also examine their medical bills and insurance claims to ensure the correct amounts are being reported. It is not uncommon for physicians to make billing mistakes and charge for the wrong procedure or services that were never provided, forcing patients who do not review their bills to pay for more than what they truly owe.