This may pinch a bit – Credit cards for health care can cost big bucks
By Jennifer Heldt Powell
BostonHerald.com
June 19, 2006
The cards and credit programs have been around for many years but they’re becoming more prevalent as credit card companies look to create new products. New consumer-driven health plans could also drive up demand. Under those plans, patients face higher co-pays and deductibles. They may look to put those payments on credit cards.
Overall, consumer advocates say they’re concerned about the use of credit cards to pay for health care costs, especially among those with lower incomes.
But those who offer the cards say they allow consumers to get treatments they might otherwise have to delay.
Some plans, like Capital One’s, work like a car loan with a fixed interest rate and a fixed monthly payment for a certain amount of time.
Others are credit cards with no interest for a number of months. If the card is not paid off by the end of the promotional period, interest rates of 22 percent or more will be charged retroactively to the beginning of the loan.
http://business.bostonherald.com/businessNews/view.bg?articleid=144360
Comment:
By Don McCanne, M.D.
How often have we heard that national health insurance should be rejected because it would suppress innovations that could only take place in the private sector? Well, they’re right.
Only in the private sector would insurers offer innovative products that are designed to shift risk from the insurer to the individual insured (by reducing benefits and increasing cost sharing). Only in the private sector would insurers establish health savings accounts and high-deductible health plans (with their lucrative fees and decreased risk for insurers). Only in the private sector would insurers expand their market to include credit cards and debit cards (with an additional twenty-two percent added to the patients’ out-of-pocket costs). Only in the private sector would insurers push for a mandate to require individuals to purchase their own affordable plans (affordable only because they shift unaffordable costs from the insurers to the patients). Only in the private sector would insurers push for regulatory relief allowing them to offer more profitable, lower-premium plans (threatening to eliminate financial security for patients). Only in the private sector would insurers support policies allowing them to cherry-pick the healthy (while shifting high-cost patients to public programs, proposed government reinsurance schemes, and to involuntary private charity when all else fails).
Wouldn’t it be terrible if we had to give up all of this innovation merely because we decided to establish a national health insurance program?
Twenty-two percent is hard to beat. Why look for health care value when private innovation can generate profits like that?