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Debt Wars: Patients and Doctors View Medical Credit Cards Differently

The problems many patients have encountered with medical credit cards are so bad that some healthcare providers are no longer offering them. According to an October 2013 New York Times article, Cameron P. Kmet, a chiropractor in Anchorage Alaska, said he stopped offering them to patients because “one missed payment can ruin a patient's life.”

            Mr. Kmet now runs a company that negotiates payment plans between patients and their providers that only charges an annual interest rate of about eight percent – far lower than what patients must pay with the larger medical credit card companies, especially if they miss one or more payments or need to take the maximum number of months allowed to pay off their debts.

Patient Stories Document Major Financial Challenges and Heartaches

            When 78-year-old Patricia Gannon couldn’t afford to pay cash for a new $5,700 partial denture, she wondered what she would do since her insurance would only pay a small fraction of the total cost. Her dentist’s office then suggested she fill out a medical credit card application so she could pay for the item. After doing so Ms. Gannon discovered that while her dentist is fully guaranteed his fees under the plan, she is being billed $214 a month (with a 23% interest rate – escalating to 33% if she ever misses a payment).                                                                                     This monthly payment equals about one-third of her monthly Social Security check. Penalty fees may also be added if she ever runs late with a payment.

            Others are facing similar dilemmas and confusing paperwork. After 82-year-old Harold Koi-Than visited a dentist for major dental work, he was later surprised to learn that he had not only missed a payment, he didn’t even know that he had signed up for any type of medical credit card during his last visit. Fortunately, family members who knew Mr. Koi Than was very careful about paying his bills intervened on his behalf. They were able to get his medical credit card canceled. After all, it’s really possible that a person might reasonably believe that he or she is just filling out a financing form documenting a long-term payment arrangement with a doctor, as opposed to a medical credit card application.

            Carl Dorsey’s predicament was also documented in this same New York Times article. At age 74, he receives Social Security and only earns about $800 a month as a used car salesman. After he was told he needed dentures costing $2,634, he was advised to apply for a medical credit card to help him pay the fees. When Mr. Dorsey missed a payment, “the lapse set off a penalty interest rate of nearly 30%. [He] says he’s being pursued by debt collectors.”

How Some Medical Credit Card Issuers View This Situation

            Arguably lacking significant compassion, these companies are a bit quick to paint a somewhat rosy picture about how these cards are affecting many seniors and the poor. One representative of a medical credit card company claims that about 80% of her company’s patient clients are able to pay off their cards before being charged any interest. While this may be true, the stories already shared above make it clear that many people are suffering.

Conclusion

            Everyone should try to avoid signing up for a medical credit card when they can’t afford to pay cash for their general medical or dental care. However, if you have no other alternatives, then look over the credit card application very carefully, noting all of the possible interest rates that may one day be applied to your account. After all, no one deserves to be made heartsick by the overreaching greed that often appears in America’s healthcare financing system.

If you believe that you’re a victim of any abusive debt collection practices, contact the Law Offices of Georgia consumer protection attorney Shane Smith so that you can learn more about your rights under federal and state consumer protection statutes. Call (770) 487-8999 today to schedule your free initial consultation.


Shane Smith
Advocate for the Seriously Injured in Georgia