Healthcare Only Credit Cards?

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As the price of healthcare keeps rising, health insurers are offering cash-strapped consumers a new way to pay their bills -- credit cards that only can be used for medical or dental expenses.

The cards typically feature low- or no-interest introductory periods, and they're tailored for use only at doctor and dentist offices, pharmacies, hospitals and other healthcare providers.

The catch: Just like traditional plastic, the health cards often come with fees and high interest rates after the grace period for payment is over.

"Healthcare costs are rising for the consumer. And so they may, from time to time, need some additional assistance," said Beth Bierbower, vice president of product innovation at Humana. "This is something for people in time of need."


Oh The 'Humana Of Life
Humana became the latest insurer to venture into the field this week, with the launch of a Visa card that's issued by Republic Bank.

The HumanaAdvance card, with a $96 annual fee, will be promoted to all employees of companies that offer a high-deductible consumer-driven health plan, even workers who don't have Humana coverage.

Users can charge a medical bill to the card, and pay it back without interest over six months through automatic deductions from their paychecks.

Humana's move follows in the steps of other insurers, such as Aetna and UnitedHealthcare, which also have been extending credit to their members in recent months.

That's in addition to credit cards that some financial institutions pitch directly to patients at doctors' offices.

For example, dozens of Tarrant County healthcare providers -- mainly dentists, eye doctors, and sellers of hearing aids -- offer their patients the Citi Health Card.

That card comes with several months of interest-free payments. But users who don't pay off the balance in the allotted time are hit later with interest rates well above 20 percent.

Another payment option, dubbed CareCredit, is available from hundreds of local providers under similar terms.


Consumers Can Easily Get Screwed
The proliferation of easy credit troubles some consumer advocates, who contend that rising health costs and a shift toward health plans with skimpier coverage have left many patients unable to afford their care.

Mila Kofman, an associate research professor at Georgetown University's Health Policy Institute, said health-specific cards are often touted as a convenient way to make payments seamless for patient and doctor.

"That's a noble goal. But the reality is, it's all about affordability," Kofman said. "If you can't afford the deductible, then putting the deductible on a credit card -- adding in the fees and the interest -- is the worst thing that you can do. That's not going to help you be able to finance your medical care. It's just going to get you further into debt."

Mark Rukavina, executive director of the Boston-based Access Project, said insurers and financial institutions are experimenting with healthcare credit as Americans are expected to spend $265 billion out-of-pocket on their medical care this year. "There's $265 billion to be spent, and they want a piece of it," said Rukavina, who co-wrote a report about medical debt.

Humana's Bierbower said the insurer's interest-free card could help people whose employers have opted for consumer-driven plans that pair a high annual deductible with a health spending account. Workers who run out of money in the account or can't afford their share of a medical bill can tap the card to spread out their payments.

"That's typically the consumer's greatest concern, right? What if something happens, and I don't have enough money in the account?" Bierbower said. "Many people do a good job of trying to budget for their healthcare expenses. Others don't. But unexpected events happen."


Before Enrolling, Consider Your Options
Rukavina said healthcare credit cards may be a good deal for some consumers, but they could prove costly for patients who don't have the money to repay their balance quickly. Before you go into debt to pay for healthcare-related bills, be sure to consider all of your options:

1. Ask whether your healthcare provider offers financial assistance or a discount for charity patients.
   
   
2. If you have health insurance, make sure you understand what your plan is supposed to pay and how to appeal coverage denials.
   
   
3. Find out whether you're eligible for government programs that could cover the expense.
   
   
4. If you're uninsured, negotiate with your doctor for a price similar to the discounted rate that insurers pay.
   
   
5. Ask whether your physician has a payment plan that would allow you to spread out payments over a long period.
   
   
6. If you opt for a credit card or loan to pay for healthcare, consider the terms carefully beforehand.