\u201cThe concern here is the current structure of our health care system often requires that patients enter into medical debt in order to access services they need,\u201d the senators wrote. \u201cWithin that context, patients \u2013 often under duress because of concerns about their medical care \u2013 are being pushed into and then locked into medical credit cards despite the availability of alternative payment options that might be more beneficial and offer lower interest rates.\u201d<\/span><\/p>\n Senators have asked Synchrony and Wells Fargo to provide information on the number of card holders, average balances, interest rates, delinquency rates, all hospital partners, and more, as they look into potential financial harms.<\/span><\/p>\n Wells Fargo declined to comment. In a statement, a spokeswoman for CareCredit, a medical credit card brand operating under Synchrony, said protecting consumers was of \u201cparamount importance\u201d and said it was working to respond to the senators\u2019 request.<\/span><\/p>\n \u201cCareCredit works hard to ensure our products are offered responsibly and with clear, simple, transparent terms so consumers can make well-informed decisions about financing their care. Every credit card application is underwritten based on a consumer\u2019s creditworthiness and ability to repay the balance,\u201d the spokeswoman said.<\/span><\/p>\n Synchrony Financial\u2019s CareCredit, is one of the largest issuers of such cards, with 12.7 million card holders, according to the letter. In Massachusetts, numerous health organizations accept CareCredit, including providers of dental, vision, and hearing care, primary care clinics, surgery centers, and more.<\/span><\/p>\n Wells Fargo also offers a Health Advantage card, which can be used for audiology, dental, veterinary or vision care and is similarly used by a number of Massachusetts organizations, according to its website.<\/span><\/p>\n While the cards are not new, their use is growing. <\/b>CareCredit, which began in 1987, launched a co-branded credit card with Walgreens last year, in addition to signing partnerships with major medical systems in other states. Synchrony reported that its health and wellness portfolio, which included CareCredit, accounted for $2.3 billion, or 15 percent of its total interest and fees on loans for 2021, according to year-end company financial data.<\/span><\/p>\n Consumers typically learn about medical credit cards from health care providers, which make the products available to patients or clients, according to a 2014 report from the US Government Accountability Office. And often providers share in the wealth \u2014 of the 130 professional groups CareCredit partnered with, over 80 were paid endorsements linked to member enrollment in the medical credit card program, according to company financial documents.<\/span><\/p>\n Despite the proliferation of such cards, the senators worry about some of the terms, including that CareCredit\u2019s interest rate is as high as 26.99 percent \u2014 far greater than the average 16.27 percent rate for other credit cards, according to the letter.<\/span><\/p>\n Patients may also miss out on more advantageous payment plans. <\/b>For example, Mass General Brigham, the state\u2019s largest health system, offers a 0 percent interest monthly payment plan for most <\/b>bills, as well as other financial assistance programs. The health system said it does not partner with any medical credit card providers.<\/span><\/p>\n Medical credit cards can also hurt a person\u2019s credit score, as they are treated as credit card debt. Medical debts on traditional credit cards, however, are treated more favorably. Last year, the country\u2019s three largest credit bureaus \u2014 Equifax, Experian, and TransUnion \u2014 <\/b>agreed to remove medical debts paid in full from credit reports. Starting next year, the credit bureaus will no longer include medical debt in collections under $500 on credit reports.<\/span><\/p>\n The limit for the card is also sometimes set to the cost of the service, maxing out the card and damaging credit scores that way, the senators\u2019 letter said.<\/span><\/p>\n Many medical credit card companies also advertise \u201cno interest\u201d periods ranging from six to 24 months. However the cards actually offer deferred interest promotions, in which the interest accrues and will be retroactively charged if the entire balance is not paid off by the end of the promotional period. In 2013, CareCredit, then part of GE Capital Retail Bank, was ordered by the Consumer Financial Protection Bureau to refund $34.1 million<\/a> to consumers who were victims of allegedly deceptive credit card enrollment tactics, and to change its consumer disclosures.<\/span><\/p>\n \u201cThey are predatory and end up saddling people with debt and interest that in some instances they shouldn\u2019t have at all,\u201d said Andrew Cohen, director and lead attorney for the Access to Care and Coverage Practice at Health Law Advocates, a legal services organization focused on Massachusetts.<\/span><\/p>\n Cohen said that he has seen instances where people took out medical credit cards to pay for dental implants, which often are not covered by MassHealth. However people usually aren\u2019t aware that their insurance would cover alternative services such as partial or full dentures.<\/span><\/p>\n \u201cEven more problematic is, this isn\u2019t just a credit card company,\u201d Cohen said. \u201cThis is a doctor or dentist you\u2019re supposed to trust. Yet they are partnering with this company that has terms that are problematic for consumers.\u201d<\/span><\/p>\n Medical credit cards add to the growing problem of health care debt. In Massachusetts alone, 13 percent of residents reported having family medical debt, according to a survey of Massachusetts residents released in July. Of those with family medical debt, 88 percent incurred all of those medical bills while they and their family members had health insurance.<\/span><\/p>\n In 2007, a study conducted by Warren and others found that medical debts contributed to over 60 percent of bankruptcy filings.<\/span><\/p>\n Providers may be incentivized to take medical credit cards to save the time and resources negotiating with a patient\u2019s insurance company, or instead of putting patients on payment plans. But ultimately, the senators said, such cards may \u201cserve only to exacerbate [the] financial harm of unaffordable healthcare.\u201d<\/span><\/p>\n Jessica Bartlett can be reached at jessica.bartlett@globe.com<\/a>. Follow her on Twitter @ByJessBartlett<\/a>.<\/p>\n<\/div>\n![\"Signage](\"https:\/\/bostonglobe-prod.cdn.arcpublishing.com\/resizer\/clEWTZIrrghqxe3GjNcCunqHU48=\/960x0\/cloudfront-us-east-1.images.arcpublishing.com\/bostonglobe\/EIHZIRJ3UIM6ZB4WE5XATCXMS4.jpg\")
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