CHARLOTTE, N.C. – Middle class hospital patients who make too much money to qualify for Medicaid but not enough to pay off balances within a year could end up paying more for medical care because they’re charged interest on a medical credit card offered by the hospital.
Margaret Hedrick, 77, who lives with her daughters in Gaston County, had surgery for colon cancer this summer after a tumor blocked her intestine.
Margaret loved her surgeon at Carolinas Medical Center in Pineville. “The man was so nice and never embarrassed me at all,” she said.
But when she got home, the bills rolled in. Medicare took care of the biggest part of the balance. But there were still more than $2,000 in out-of-pocket expenses that she owed. Margaret and her daughters paid what they could for a few months, sometimes $200 at a time, but a collection agency kept calling.
“I got real upset and I just wouldn’t answer the phone,” Hedrick said.
That’s when CMC pointed Margaret toward a medical credit card that would make the dunning calls stop but would charge her interest. “I was mad about it because credit is something you pursue. They don’t pursue you,” she said.
CMC has a contract with Access One Med Card based in Fort Mill to offer the credit cards. Dr. Russell Salton Jr. founded the company to get hospitals their money quicker while offering consumers credit at a lower interest rate than many bank credit cards.
“I actually think patients are better consumers than most people give them credit for,” Dr. Salton said.
The Access One Med Card lets patients pay interest free for a year. But after 12 months, Access One charges an interest pegged at the prime rate plus six percentage points, currently about nine-and-a-quarter percent annual interest.
“Our interest is a lot less than patients can get if they were to put it on their own credit card,” said Dr. Salton.
And unlike debt collectors, Access One promises not to hassle customers with phone calls or ding their credit rating if they miss payments.
“There is no financial or credit rating harm that can come to a family for taking part in our program,” said Dr. Salton. “The program is entirely voluntary.”
Voluntary–but not without costs. Patients like Margaret Hedrick who can’t afford to pay thousands of dollars in 12 months will have to pay interest.
“They’re making money off of your bill that you’re trying to pay off,” said Gayle Halbert, Margaret’s daughter. “So, in other words, they’re charging you to give you this credit card.”
Dr. Salton agrees that his company is making money off the interest, but argues that interest is less than what customers would pay if they applied for credit separately from the Med Card. If patients default on three consecutive payments, Access One merely turns the balance back over to the hospital. No reporting to credit agencies. No harassing phone calls. No spikes in interest rates.
So consumers like Margaret Hedrick may resent the card, increasing the cost of health care for consumers who can’t pay off the full balance in a year, but higher deductibles mean the medical credit card will likely become more common–not less.