Citing research that found about half of U.S. adults find it difficult to afford the cost of their healthcare, the Consumer Financial Protection Bureau (CFPB or Bureau) published a report focusing on medical credit cards and loans used to cover basic medical treatment and emergency health care. According to the CFPB, the use of medical credit cards and installment loans can increase the financial burden on patients who may pay more than they otherwise would pay.

The CFPB acknowledged in its report that both insured and uninsured Americans face significant challenges paying for necessary medical procedures. One reason is that many medical services and devices, such as fertility treatments, auditory devices, and dental services, may not be covered by insurance. Another reason is that average deductibles have grown 336% in the last two decades. For these reasons, many people will use financial alternatives, including medical credit cards and installment loans, to cover healthcare costs.

Specifically, the CFPB found that:

* Medical credit cards and installment loans were once used primarily for elective care but now cover everything from emergency visits and specialty care to regular checkups.

  • When a patient signs up for a medical credit card, their card can be used again for medical services until they reach their credit limit.

  • Medical installment loans, on the other hand, are generally offered before a treatment and are only authorized to cover that treatment.

* Medical financing companies rely on healthcare providers to market their products.

  • According to the CFPB, healthcare providers may be disincentivized to explain mandated financial assistance programs or zero-interest repayment options to patients before offering these products.

  • The Bureau also stated that healthcare providers may be unable to adequately explain complex terms, such as deferred interest plans, to patients.

* Certain medical payment products offer deferred interest promotions. These products offer zero or low interest for a set period of time. Once the promotional period expires, the rates can increase significantly.

  • Notably, the report acknowledged that for the majority of patients who pay off their full balance in the designated time period, deferred interest financing can be advantageous.


The CFPB concludes its report by stating, “[w]e will continue to look at how medical credit cards and loans are marketed to providers, the reach of these products, and how the use of these products, particularly for patients with limited access to credit, impacts patients’ finances and health outcomes.”

This is an area where we have not seen much activity from the CFPB in quite some time. The fact that the issue of medical procedure financing is coming up again may indicate that the Bureau’s interest in this area has returned. Troutman Pepper will continue to monitor the CFPB’s activity in this area and report if the Bureau’s findings prompt more enforcement actions.

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