In a move that may have far-reaching consequences for healthcare financial products, the Consumer Financial Protection Bureau (CFPB), the Department of Health and Human Services (HHS), and the U.S. Department of Treasury, have launched an inquiry into medical credit cards and installment loans in an effort to regulate the medical credit industry.
“Financial firms are partnering with health care players to push products that can drive patients deep into debt,” said CFPB Director Rohit Chopra in a prepared statement. “We are opening a public inquiry to better understand how these practices are affecting patients in our country.”
Deputy Secretary of the Treasury Wally Adeyemo also added that the “Treasury is proud to partner with agencies across the Biden Administration to crack down on these often abusive practices that take advantage of patients during vulnerable times. We look forward to receiving stakeholder input so that we can better protect patients and consumers.”
According to both the WSJ and Bloomberg, regulators have set their sights on several key aspects of medical credit cards and installment loans, including interest rates, fees, collection practices, and the incentives extended to healthcare providers to promote these financial products. The primary focus of these investigations is to ascertain whether current practices are fair, transparent, and in the best interest of consumers.
Concerns about the lack of oversight and lack of regulation within the industry are not new. The CFPB has been vocal about the lack of transparency—and the serious risk around healthcare financial products for some time. We previously covered why consumers should be wary of these products, particularly when many healthcare providers are actively marketing and promoting these financing options to patients. Because many patients may not fully understand the terms and conditions of these financial products, they’ll end up paying more than they originally bargained for.
While it’s still early days, the inquiry is a good first step in regulating the space. It signifies an acknowledgement of the potential pitfalls and abuses within the industry, while seeking to strike a balance between providing access to care and protecting vulnerable patients. As the regulatory inquiry progresses, the financial healthcare landscape could undergo significant changes, potentially reshaping the way Americans manage their medical expenses in the years to come.
