CONSUMER ALERT: As New Yorkers Opt for Medical Credit Cards and T...

Secretary Mosley: "While these products can provide short-term relief for individuals and families in need of financial assistance, it is critical to know your rights as a patient and be cautious of financial traps that could become extremely costly down the road."

The Department of State's Division of Consumer Protection is sharing tips to help New Yorkers navigate medical financial products for the cost of health care procedures that are not covered by insurance. Medical financial products include certain credit cards and third-party installment loans designed solely for paying for health care services, including dental services. A recent Gallup Poll found that Americans' inability to pay for medical bills has increased, with a disproportionate impact on lower-income households. Americans carry an estimated $195-220 billion in total health care services debt with medical financial products now making up a significant portion.

"An unfortunate reality is that many New Yorkers must rely on medical financial products to cover their out-of-pocket healthcare expenses," said Secretary of State Walter T. Mosley. "While these products can provide short-term relief for individuals and families in need of financial assistance, it is critical to know your rights as a patient and be cautious of financial traps that could become extremely costly down the road."

State Health Commissioner Dr. James McDonald said, "Medical debt should never come between a patient and the care they need. While some financing products may seem like an easy solution in the moment, they often carry hidden costs that can trap families in long-term debt. I urge New Yorkers to understand their rights, ask questions, and make informed decisions before signing up for any medical financial product."

What Are Medical Financial Products?

Medical financial products are a type of alternative financing increasingly used by families and individuals struggling to pay for their out-of-pocket medical and dental expenses. Financial institutions market these credit options to healthcare providers, who are incentivized to promote them to patients. According to The National Consumer Law Center, a dental office is the most frequent setting where patients are offered financing through a medical financial product.

Common Consumer Complaints

Common complaints from consumers to the Consumer Financial Protection Bureau include misleading deferred interest terms and fee-related issues like unexpected surcharges and hidden processing costs. The cards often offer "no interest" as a highly marketed feature while drawing little attention to interest rates reaching as high as 30% after the interest-free promotional period.

One practice frequently reported by consumers involves marketing these credit products to patients who are in a diminished capacity to consent, leaving them feeling pressured to sign up for a credit card to cover "unexpected costs" and are later faced with credit card debt they never intended to incur.

KNOW YOUR RIGHTS WHEN VISITING A DOCTOR OR DENTIST IN NYS:

In New York State, when visiting any health care providers, including doctors or dentists, you have the right to considerate and respectful care including:

TIPS TO AVOID A FINANCIAL TRAP:

MEDICAL DEBT AND CREDIT REPORTING:

While New York and other states have enacted statutes shielding medical debt from credit reporting requirements, recent litigation has created uncertainty in connection with medical debt protection laws. Consumers should be aware that medical debt may potentially be reported and could impact credit ratings. REMEMBER: It is important to take the time to understand the terms of any credit agreement to ensure you can make the necessary payments.

About the New York State Division of Consumer Protection

Follow the New York Department of State on Facebook, X and Instagram and check in every Tuesday for more practical tips that educate and empower New York consumers on a variety of topics. Sign up to receive consumer alerts directly to your email or phone here.

The New York State Division of Consumer Protection provides voluntary mediation between a consumer and a business when a consumer has been unsuccessful at reaching a resolution on their own. The Consumer Assistance Helpline 1-800-697-1220 is available Monday to Friday from 8:30am to 4:30pm, excluding State Holidays, and consumer complaints can be filed at any time at https://www.dos.ny.gov/consumerprotection. The Division can also be reached via X at @NYSConsumer or Facebook.