Was It for Your Health? Or Was It for the Points?
GE Money, Citibank and JPMorgan Chase and others have created credit cards and lines of credit specifically for medical care not covered by insurance. The cards are marketed not to patients — but to medical providers who offer them as an alternative to payment at time of service. A 2007 report by McKinsey & Company estimates Americans pay for about $45 billion worth of medical care using a credit card.
Just another way to bill.
Isn’t this a way for the seller to extend credit to a buyer? If so, how is it different from any other form of credit?
Successful businesses must find ways to collect on sales (or fill a niche so other businesses can collect on a sale). Home mortgages make home ownership more widespread than if buyers had to save up cash. Auto loans and auto leases make it easier to own a car. Stores like Kmart have layaway or brand-specific credit cards. Master Card and Visa provide access to credit and stores willingly forgo a small percentage of gross charges to attract customers who value the convenience of using a charge card.
There are two things about medical credit cards that intrigue me. 1) People often don’t think of medical debt the same way they think of other debt; for instance hospitals probably write-off Emergency Room charges more than other industries write down bad debts. I assume this could make it harder to for financial institutions to collect on medical debts thus creating more risk; 2) I also wonder if transferring the balance to a financial institution (rather than owing the doctor or hospital) makes people feel more obligated to pay?
It’s neither for your health or for the points. It’s for the money.