With medical care costs in the United States among the highest in the world, getting quality care can be difficult for some patients to afford - especially if they lack medical insurance, or if their care is not covered by insurance. As a result, some creditors have created medical-financing programs to help address this issue.
Lenders like CareCredit, Sofi and Lightstream offer private financing for patients seeking to pay for everything from dental surgery to plastic surgery and even pet procedures. But while these credit programs may seem like a straightforward way to break up costly medical bills without having to delay the care you need, many consumers don’t realize some credit programs come with hidden pitfalls that could end up costing them a lot more than they bargained for.
The problems often begin because patients don’t realize they’re enrolling in private financing. That’s because it wasn’t too long ago that many doctors offered payment plans through their practice. Today, while some still offer this service, collecting debts has proven to be too costly and time consuming, and many practices have instead opted to accept private credit plans.
"Private credit plans allow the doctor to receive the payment in full, up front, without the patient having to wait to receive treatment," says Dr. Ryan Mitchell, a plastic surgeon from Henderson, Nevada. "I believe it streamlines the payment process by taking the doctor out of the equation. The last thing your doctor wants to do is nag you for payment."
Unfortunately, while these credit plans do have their benefits, some patients simply don’t understand what they’re signing up for when they apply for financing. For example, some plans offer zero interest if the balance of the loan is paid within a specified amount of time, but some patients miss that crucial last detail.
"The zero interest is only if the patient pays the balance off in full before the time limit is up," says Mitchell.
If the patient fails to pay off the balance, an interest rate will apply - and in many cases, creditors will even tack on retroactive interest based on the full loan amount, not just the current balance.
"We advise all of our patients to pay very close attention to the deal they are getting," says Mitchell. "We want you to get your procedure when you’re ready, but read the terms and conditions of the loan before agreeing to take that money. It’s still a line of credit."