STATEMENT: U.S. PIRG calls for protections from medical credit cards

FOR IMMEDIATE RELEASE: Friday, July 7, 2023

Advocates say financial dangers are clear, so rule-making is essential 

WASHINGTON —  Three federal agencies announced a Request for Information (RFI) Friday to solicit feedback on the patient impact of the proliferation of medical credit cards and its relationship to growing medical debt. The Consumer Financial Protection Bureau (CFPB) as well as the Departments of Treasury and Health & Human Services are seeking public input about the “specialty product payment market,” which is usually pitched to patients as a “medical credit card.” In June, U.S. PIRG submitted comments to urge the CFPB to issue rules to prohibit health care professionals from promoting “medical credit cards” and to prohibit the inclusion of medical debt on credit reports.

The RFI comes after months of Congressional hearings about the high cost of health care and a year after the CFPB released a report showing $88 billion in medical debt on consumer credit reports as of mid-2022. The CFPB is planning another hearing on July 11 focusing on the impact of proliferation of medical credit cards and the impact of medical debt on families. 

A 2021 OSPIRG (Oregon State PIRG) study of bankruptcies in Oregon showed that the most frequently listed creditor was the issuer of a health-care-specific credit card, CareCredit (from Synchrony Bank), followed by big hospital/provider networks. The report found that 1,037 debtors reported owing a total of more than $2 million to CareCredit, with a median of $1,443 owed per debtor. The median debt owed to CareCredit was higher than the median debt owed to any of the 10 most frequently mentioned health care systems. 

In response to the announcement, Patricia Kelmar, U.S. PIRG’s Health Care Campaigns senior director, made the following statement:

“To truly help patients afford their medical care, physicians and their staffs should help patients use their insurance and screen them for public health programs or hospital financial assistance programs. Handing people an application for a high-interest, high-fee credit card violates the principle of ‘do no harm.’ 

“Patients trust their doctors. When their health care professionals offer a ‘medical credit card,’ there is an implied trust that extends to these financial instruments. However, these cards are driving patients into more consumer debt if they miss a payment and owe high late fees and retroactive interest. 

“We urge the tri-agencies to move swiftly from this RFI to a rule-making. We have enough information about high health care prices and patients’ desperation for a quick fix to pay those bills. We have to put an end to the peddling of medical credit cards in health care settings.”