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Medical Credit Cards: Before You Sign Up, Weigh the Risks

The cost of health care is ever on the rise, and combined with the gaps in insurance coverage, many patients end up paying medical bills with credit cards. According to a report from McKinsey & Company, patients pay approximately $45 billion of their health care costs with credit cards. In the next four years, this number could triple.

Some companies have begun offering medical credit cards and lines of credit specifically meant to cover elective medical or health care expenses not covered by insurance. Cosmetic surgery, corrective eye surgery, dental procedures and even veterinary care may be covered, but these cards are not meant to cover continuing medical treatment or visits to the emergency room. The companies offering medical credit cards and lines of credit typically market them to doctors, dentists and other medical professionals, rather than directly to consumers. The medical professional then offers the card or line of credit as a payment option for the care a patient is seeking when they come in for a consultation.

It may seem tempting to apply for a medical credit card, particularly if you have limited resources. However, there are risks to take into account before you apply.

Since their inception, medical credit cards have been the subject of scrutiny with less than flattering results. Instead of presenting a medical credit card for what it is, a credit card with fees, interest rate increases and a potentially negative impact on one's credit score, medical providers may be misrepresenting these as simple payment plans. On the extreme side, some providers have been accused of falsifying financial information to make it easier for patients to qualify and of receiving financial incentives for signing up patients.

Taking a stand against these practices, New York Attorney General Andrew M. Cuomo started an investigation into medical credit cards earlier this year. Minnesota State Attorney General Lori Swanson has filed suit against two chiropractors, whose staff stand accused of signing up patients for medical credit cards without their knowledge.

What can you do? Instead of assuming that a medical credit card is your only option, talk to your medical provider. You may be able to negotiate a lower fee for their services. Your provider may also offer a payment plan of his or her own that works within your ability to pay. If a medical credit card seems to be your only option, make sure you get all the information about the card before you sign.

Jacoby & Jacoby is a Long Island bankruptcy and debt relief law firm committed to helping clients throughout the area with all of their debt-related concerns. If you would like to learn about your options in discharging medical debt and credit card bills, please contact a bankruptcy attorney at the firm today.

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