Patient financing for non-covered medical expenses

I recently made an appointment for Fraxel laser skin resurfacing - a cosmetic procedure not covered by my medical insurance. I have some money allotted to it in my savings account, and planned on paying for the treatments with a credit card (to get the rewards), and then simply paying off the credit card balance with the money in my savings.

However, when booking the appointment, they asked me if I needed financing. I said “no, unless there are really attractive financing options.” Turns out there are — through a company called “CareCredit,” I can get financing for 18 months interest-free. $5000 in my Emigrant account at 5% for 18 months is about $375 - a big enough savings to warrant opening another account.

To get the financing, I simply went to Care Credit’s website, filled out a short online application (they asked for my contact information, DOB, Drivers license info, Social Security number, Net Income, and my housing situation - own/rent/etc.). I instantly was told how much money I qualified for, and was given an account number. I was then able to call the clinic with that number, which they used for the $250 deposit on the treatment.

So basically what I have now is a revolving line of credit that I can use for medical/cosmetic treatments, much like a credit card. My monthly payments will be equal to 3% of the balance, and I’ll have 18 months to pay it off before interest starts kicking in. Note: it looks like if I’m late on payments the interest rates go up to something like 22%, so I’ll have to be careful to avoid that.

Apparently consumer medical financing is a growing market - as deductibles and policy exclusions grow, people are finding themselves footing more and more of the bill for their (non-elective) healthcare as well.

From an article in Fierce Healthcare

Many lenders are offering zero-interest healthcare services financing, a favored marketing tactic in the automotive lending world, but slamming consumers with 20-plus percent interest rates if they miss a payment or even turn one in late. (In an interesting note, some health plans–including United Healthcare–have also gotten into this market, establishing special credit plans for patients with health savings plans.)

Some of the procedures consumers finance are elective or at least not urgent, such as $3,500 eye surgeries or $6,000 ceramic tooth implants. But consumers without health insurance–or those who need procedures not covered by their plan–are borrowing large sums to pay for care. And consumers who don’t qualify for zero-interest teaser-rate loans are often financing care on high-interest credit cards. Small wonder that medical bills are a major and growing cause of consumer bankruptcy.

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