“This is problematic for multiple reasons,” she said. Stahl noted, however, that people can be stripped of that benefit if their medical debt becomes credit card debt. Last year, national credit reporting agencies announced that medical debts under $500 would be wiped from people’s credit reports, which was welcome news to many whose credit scores had been impacted by health care bills. “People would likely be better off without these cards, as the report shows, because they might be eligible for a financial assistance program through the health care institution, and if a bill is in error, they’re in a more difficult place to challenge it since they’re now dealing with a third party,” Collins said. “These products often replace cheaper forms of credit, such as low-cost loans offered by the medical providers themselves, or interfere with some patients’ rights to obtain financial assistance that many hospitals are required to provide,” the CFPB spokesperson said.Ĭollins and Stahl both stressed that patients should consider speaking with their health care providers before turning to a medical credit card, since some providers offer payment plans with no interest rates or fees. Though the survey didn’t distinguish what type of credit cards, Collins noted that it’s indicative of “how many people are paying off medical debt at high interest rates.” For medical credit cards, it’s roughly 27%.Īccording to the latest Commonwealth Fund Biennial Health Insurance Survey, in 2022, 39% of individuals who reported problems paying medical bills or that they were paying off debt indicated that they had taken on credit card debt. The average annual percentage rate (APR) - which is defined by CFPB as "the cost you pay each year to borrow money, including fees, expressed as a percentage" - is 23.84% for general purpose credit cards. “In moments of distress and uncertainty, people want to resolve medical bills swiftly and may sign up for medical credit cards that offer lower interest rates or deferred interest opportunities,” Eva Stahl, vice president of public policy at RIP Medical Debt, told Yahoo Finance. For those with employer-sponsored insurance, the average single deductible has increased by more than 57% since 2013 while the average family deductible has risen by more than 55%. Out-of-pocket costs are continuing to rise, averaging $1,315 per capita in 2021. As a result, it’s likely that even people covered under Medicare, ACA marketplace plans, or under employer-based insurance may feel the negative impact of these products.” “Today, these products are used to cover a range of medical costs, including co-pays and costs associated with emergency care. “The uses of medical credit cards and other deferred interest products have shifted significantly over time from treatments and procedures that were typically not covered by insurance to services that typically are covered by insurance,” a CFPB spokesperson told Yahoo Finance. health care costs, with national health expenditures touching $4.26 trillion in 2021. Why people would 'likely be better off' without themĮxperts have attributed the increased reliance on medical credit cards to the larger issue of U.S.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |