Patients piling medical costs on credit cards
Some doctors and hospitals are teaming up with financial-services companies to market credit cards to patients, reducing healthcare providers' dependence on bill collection, and causing more low- and middle-income consumers to pay interest on their medical debts.
While hospitals in Massachusetts are not pushing such credit cards, they are attempting to get patients to pay up front for services not covered by insurance, and are routinely asking them to provide credit card information before they receive treatment.
Patients can be turned down for elective procedures if they don't pay in advance, but hospitals are required to treat emergency cases. The state doesn't keep statistics on the number of people denied elective procedures because of financial reasons.
In states such as Texas and North Carolina, financial-services companies have joined with healthcare providers in an effort to promote the use of charge cards for medical expenses. For instance, Citibank's Citi Health Card is offered to patients through participating healthcare providers.
The card features monthly payments as low as $10, and has a no-interest option for patients who agree to pay down their debts quickly by making higher monthly payments. But those who do not meet the terms of the payment plans pay annual interest on their balance of more than 20 percent.
According to the results of a national survey released last week , about one-fifth of low- and middle-income households with credit card balances cited significant medical expenses as a reason.
A survey analysis -- by Access Project , a nonprofit medical consumer advocacy group, and Demos , a public-policy research organization -- said the number of patients using credit cards to pay their medical bills is expected to rise as employers increasingly shift insurance expenses to workers who already face larger insurance co payments and higher deductibles for medicine and treatment.
"The healthcare safety net is made of plastic -- its called 'credit cards' for many people," said Mark Rukavina , director of Access Project, which is affiliated with Brandeis University. "It's a pretty frightening prospect."
The telephone survey of 1,150 people across the country also found that the 20 percent of households that owed medical bills had , on average, credit card balances of $3,700 higher than those without medical debt, or $11,623 compared with $7,964. Healthcare advocates said that while credit cards make it easier for healthcare providers to get paid, patients who use them to settle medical bills are exposed to hefty fees, penalties, and sometimes sky-high interest rates.
Some consumers, like Lauren and Jefferson Riordan of Lynn, say they can't avoid piling up medical debt on credit cards.
Lauren works as an area manager for a staffing company, and her husband is studying for a doctorate in English. The Riordans, who have a 2-year-old son, have amassed $3,000 to $4,000 in medical and dental expenses on credit cards, partially because the medical insurance Lauren has through her employer includes a $650 deductible for prescription medications. She said the days of $5 copayments for routine medical treatment and prescription drugs are a distant memory.
Today, she juggles medical debt from card to card, watching the mail for zero- percent interest-rate offers and transferring balances as a way to avoid adding to the family's debt.
"You need a prescription because you have an infection or something, and you just put it on your credit card," she said.
Tenet Healthcare Corp., the largest publicly traded hospital chain in the country, is attempting to deal with its employees' escalating medical debts by offering them a line of credit.
Under the company's pilot program in Texas, employees' copayments for doctor visits and other healthcare services are paid through automatic payroll deductions.
The program is being offered in partnership with UnitedHealth Group, the large health insurance company that markets "health savings accounts."
Tenet hopes the program will help stem "the rising bad debt that is generated at a hospital from patients who are not paying their portion of the medical bill," said Steven Campanini, a company spokesman.
The Access Project/Demos analysis said medical debts should not be used to tarnish an individual's credit rating, and that doctors and hospitals should be discouraged from marketing credit cards to patients.
"Patients unable to pay their bills in full may feel obligated or pressured to accept the terms of credit offered by the very people or institutions that they look to for healing," the report said.
Peggie Sherry , 50, of Tampa, Fla., said she accumulated $20,000 in credit card debt during the two years she underwent mastectomies and reconstructive surgery for breast cancer. She was able to pay off the balance after receiving an inheritance.
Patients who "max out" their credit cards because of medical debt "shouldn't be treated the same as someone who buys big-screen TVs," Sherry said. "We're not out buying fur coats on MasterCard and Visa. We're trying to live."
Christopher Rowland can be reached at crowland@globe.com. 
