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Health-care financing comparison chart

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Several big lenders have retreated from health-care financing in recent years. Since the recession, for example, Chase, Capital One and health insurance provider Humana have all dropped their health-care lending programs. (Humana still offers a health-care debit card, but discontinued its medical credit card.)  

"Before the recession, there were lots of players," says Mark Rukavina, founder of the health care consulting group Community Health Advisors. "They were aggressively marketing the product and extending it to people who were having a difficult time paying for health care."

(See "5 tips when considering health-care credit cards" and "Medical credit cards: Treatment today, payment headaches tomorrow.")

Today, some smaller lenders have popped up in place of the larger providers. For example, American Healthcare Lending, based in Salt Lake City, markets itself as a direct competitor to CareCredit, with significantly lower rates for consumers with solid credit scores.

The company only offers installment loans for now rather than a medical credit card. Graham Anderson, vice president of business development and marketing at American Healthcare Lending, says they are thinking about introducing a revolving credit line in the future. (Story continues below chart.)

AccessOne, based in Charlotte, N.C., also offers a health-care credit card that has a significantly lower standard interest rate than most -- 11.25 percent -- and, unlike other cards, can be used for general medicine and hospital expenses. The card has been around for more than a decade, but is only accepted by a limited number of health-care providers in a handful of states in the South.

While the recession drove some lenders out of the health-care market, the federal health-care law makes others hesitate to come in. The size of the health-care financing market is expected to shrink as key sections of the federal Affordable Care Act are implemented.

"I would expect that there would be less of a need for these credit cards if more people have insurance," says Gina Calabrese, a professor of law at St. John's University.

Beginning in 2014, Americans who can't afford private health insurance will be able to shop around for a less costly, government-subsidized plan using state-run marketplaces known as health insurance exchanges. Many consumers will also spend significantly less on out-of-pocket medical expenses, thanks to an annual cap on the health-care costs that insurers can pass on to individuals and families.

The changes, which go into effect in 2014, are expected to dramatically increase the number of people who are insured in the United States and cut down on the number of people who are pushed into bankruptcy by out-of-pocket medical expenses.

However, people who are financing elective procedures that typically aren't covered by insurance -- such as cosmetic surgery or in-vitro fertilization -- may still be eager to turn to alternative forms of financing to help bridge the gap. 

"Before the recession, there were lots of players," says Mark Rukavina, founder of the healthcare consulting group Community Health Advisors. "They were aggressively marketing the product and extending it to people who were having a difficult time paying for health care."

(See "5 tips when considering health-care credit cards" and "Medical credit cards: Good, bad or ugly?")

Today, some smaller lenders have popped up in larger providers' place. For example, American Healthcare Lending, based in Salt Lake City, markets itself as a direct competitor to CareCredit, with significantly lower rates for consumers with solid credit scores.

The company only offers installment loans for now rather than a medical credit card. However, Graham Anderson, vice president of business development and marketing at American Healthcare Lending, says they are thinking about introducing a revolving credit line in the future.

Meanwhile, AccessOne, based in Charlotte, N.C., also offers a health-care credit card that has a significantly lower standard APR than most -- 11.25 percent - and, unlike other cards, can be used for general medicine and hospital expenses. However, the card, which has been around for over a decade but appears to be growing slowly, is only accepted by a limited number of health-care providers in a handful of states in the Deep South.

Experts are unsure whether more lenders will be eager to get into the health-care financing market going forward, particularly now that key sections of the Affordable Care Act are about to be implemented.

"I would expect that there would be less of a need for these credit cards if more people have insurance," says Gina Calabrese, a professor of law at St. John University.

Beginning next year, Americans who currently can't afford private health insurance will be able to shop around for a less costly, government-subsidized plan using state-run marketplaces known as health insurance exchanges. Many consumers will also spend significantly less on out-of-pocket medical expenses, thanks to an annual cap on the health-care costs that insurers can pass on to individuals and families.

The changes, which don't go into effect until 2014, are expected to dramatically increase the number of people who are insured in the US and cut down on the number of people who are pushed into bankruptcy by out-of-pocket medical expenses.

However, people who are financing elective procedures that typically aren't covered by insurance -- such as cosmetic surgery or in-vitro fertilization -- may still be eager to turn to alternative forms of financing to help bridge the gap. Here are some of the lending options that are currently available.

Credit Issuer: CareCredit from GE Money

Type of loan: Credit card

Treatment covered: Dental, hearing, vision, cosmetic, chiropractic care, hair restoration, weight loss and veterinary care

Interest rate: 26.99 percent for a revolving line of credit; 14.9 percent for extended payment plans.

Terms: There are two types of promotional financing plans available. If you choose a deferred-interest plan, you can defer paying interest for 6, 12, 18 or 24 months, depending on the plan offered by your health-care provider. If you pay the full balance charged to the card by the end of the promotional period, interest charges will be waived on your account. However, if you don't repay the full amount by the time the promotion expires, a 26.99 percent interest rate will be charged to your card's full balance, beginning with the first purchase.  

If you opt for an extended payment plan instead, you will be responsible for fixed monthly payments lasting 24, 36, 48 or 60 months and will be charged a 14.9 percent interest rate on the loan.

Restrictions: CareCredit can only be used at participating health-care or veterinary clinics. The availability of specific payment and promotional options varies by provider.

**

Credit Issuer: Citi Health card

Type of loan: Credit card

Treatment covered:  Dental, hearing, vision, veterinary care, mobility care and hair restoration

Interest rate: 29.98 percent for a revolving line of credit; 15.9 percent for budget payment plans.

Terms: There are two types of promotional plans available. If you choose a deferred interest plan, you can defer paying interest for up to 6, 12, 18 or 24 months, depending on the treatment amount and plan offered by your health-care provider. If you pay the full balance charged to the card by the end of the promotional period, interest charges will be waived on your account. However, if you don't repay the full amount by the time the promotion expires, a 29.98 percent interest rate will be charged to your card's full balance, beginning with the first purchase.  

If you opt for a budget payment plan instead, you will be responsible for equal monthly payments lasting 24, 36 or 48 months and will be charged a 15.9 percent interest rate on the loan.

Restrictions: The Citi Health card can only be used at participating health-care or veterinary clinics. The availability of specific payment and promotional options varies by provider.

**

Credit Issuer: Wells Fargo Health Advantage card

Type of loan: Credit card

Treatment covered: Dental, hearing, vision and veterinary care

Interest rate: 27.99 percent for a revolving line of credit; 9.9 percent for reduced APR plans.

Terms: There are three types of promotional financing plans available. If you choose a deferred-interest plan, you can defer paying interest for an extended period, depending on the plan offered by your health-care provider. If you pay the full balance charged to the card by the end of the promotional period, interest charges will be waived on your account. However, if you don't repay the full amount by the time the promotion expires, a 27.99 percent interest rate will be charged to your card's full balance, beginning with the first purchase.  

If you opt for a reduced APR plan instead, you will be charged a 9.9 percent APR on any balance that you carry over from month to month.

Some health-care providers may also offer a fixed payment plan with a 0 percent APR that lasts between two and three years. If you opt for this plan, you will be expected to repay your balance in equal monthly installments. As long as you pay your bills on time, you won't pay any interest.

Restrictions: The Wells Fargo Health Advantage card can only be used at participating health-care or veterinary clinics. The availability of specific payment and promotional options varies by provider.

**

Credit Issuer: Access One MedCard

Type of loan: Credit card

Treatment covered: Hospital services, primary care and some specialty services, including women's health care, rehabilitative care and psychiatric services

Interest rate: 9.25 percent

Terms: A 12-month, interest-free option is available for cardholders who agree to repay the loan in 12 equal installments.

Restrictions: The MedCard Access One card can only be used at participating hospitals and health-care clinics in North Carolina, Tennessee, South Carolina, Georgia and Florida

**

Credit Issuer: American Healthcare Lending

Type of loan: Installment loan

Treatment covered: Hearing, dentistry, mental health care, cosmetic procedures, weight loss and hair restoration, fertility treatments and veterinary care.

Interest rate: 8.99 percent for excellent credit; 17.99 percent and up for those with less-than-perfect credit

Terms: There are two types of promotional financing plans available. There is an interest-free option for 6, 12, 18 or 24 months. If you fail to repay the full balance by the time the promotional period expires, interest will be applied to the remaining balance on the loan. There is also a no-interest option that lasts 3, 6 or 12 months and is approved using information from your checking account history in addition to your traditional credit history.

The installment term on the loan offered by American Healthcare Lending may last between 12 and 72 months, depending on the plan offered by your provider.

Restrictions: A loan from American Healthcare Lending can only be used at participating health-care or veterinary clinics. The availability of specific payment and promotional options varies by provider.

***

Credit Issuer (type): Springstone Patient Financing

Type of loan: Personal loan

Treatment covered: Dentistry, Fertility (IVF only)

Interest rate: 22.98 percent for deferred interest loans; 3.99 percent to 17.99 percent for extended payment plans.

Terms: There are two types of promotional plans available. If you choose a deferred-interest plan, you can defer paying interest for 6, 12, 18 or 24 months, depending on the plan offered by your healthcare provider.

If you pay off the loan completely by the end of the promotional period, interest charges will be waived on your account. However, if you don't repay the full amount by the time the promotion expires, a 22.98 percent interest rate will be charged to the total amount borrowed for the procedure.

If you opt for an extended payment plan instead, you will be responsible for fixed monthly payments lasting between 24 and 84 months and will be charged interest on the loan. Interest rates for extended payment plans vary, depending on your credit history. Currently, Springstone offers a wide range of possible APRs, starting at 3.99 percent and topping out at 17.99 percent.

Restrictions: A loan from Springstone Patient Financing can only be used at participating healthcare clinics. The availability of specific payment and promotional options varies by provider. 

Published: March 21, 2013


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