Mailers from a New York City dentist piqued my interest last week.' The dentist was offering a $127 special for an initial visit including a comprehensive oral evaluation, full-mouth X-rays and a personal consultation. The mailer also noted that the while the practice accepted credit cards, '0% financing' was also 'available through CareCredit.'' ' Zero percent financing is the same come-on that car manufacturers have used for years to entice you to buy Chevys and Toyotas.
Lindy Washburn, a reporter for the Bergen Record, recently produced a fine expose about doctors and dentists who pressure patients to sign up for credit cards to pay for their care, recommend more expensive treatments than necessary and sometimes don't complete the treatments after they are paid by the credit card company.' Washburn found that patients can end up paying much more than they bargained for.' For example, one patient signed an agreement with the understanding that the loan would be activated only if she proceeded with treatment.' Instead, the patient got stuck with a $6000 loan.
Dental care is expensive, and most people don't have insurance that covers the cost.' Some of the biggest names in banking ' like JPMorgan Chase and Capital One ' have found a niche market for these single-purpose credit cards or lines of credit to be used for health care.' GE Capital issues the CareCredit card, which tells prospective customers on its website that the card is 'the credit card just for your health and beauty needs.'' Site visitors also learn that the card 'removes the accounts receivable responsibilities from the doctor and allows them to focus on recommending and providing the best care to their patients.'' In other words, providers get paid right away, often before treatment is completed.
Since these are credit transactions, and good consumers should always be wary of credit deals and the fine print they come with, I stopped by the dental office to see if I could obtain a copy of their agreement.' I told the receptionist I had received one of the practice's mailings and wanted to know more.' He readily gave me one and said that obtaining credit was pretty easy: Once the dentist determined the extent of the treatment necessary, they'd work out a billing plan and I could apply for the CareCredit card.' 'Approval," he said, "was instantaneous.'' That did sound like a good deal, especially for anyone howling in pain with a sore tooth.
If getting the credit approval was simple, reading the contract was not.' It was tricky and difficult to figure out what I was getting. For example, the contract described two promotional options.' One option called for no interest to be paid if the account was paid in full within six, twelve or 18 months.' It came with the caveat that not all doctors offer this option, but, more importantly, it noted that 'interest will be charged to your account from the purchase date if the promotional purchase is not paid in full within the promotional period, or if you make a late payment.'
The second payment option called for a fixed monthy payment schedule with a 14.90 annual percentage rate. ' The agreement disclosed that both options applied to 'purchases made with your CareCredit credit card account.'' However, another section of the document labeled 'credit card account agreement' noted a 26.99 APR.' To the casual reader or patient, it's not clear how the promotional options link to the credit card agreement the consumer is signing.
What consumer protections patients have under various federal and state laws depend on particulars of agreements, so I showed the contract to one New York consumer credit expert who advised: 'Do not enter into these agreements.' They are nothing but trouble.'' One woman Washburn interviewed who had signed an application while in pain at her practitioner's office put it a different way:' 'Even though you're in pain, you just ought to walk out the door and take some more Ibuprofen.'
While special offers and low interest rates have worked well for many car buyers, having special financing to string out health care costs is less likely to be a good value.' In order for health care 'deals' and offers to work for consumers, patients first have to have access to a range of treatment costs from various providers, and then, if necessary, make choices about payment plans.' Otherwise, it is all too easy to pay too much and get too little in return.