Senate to vote on Jackson bill targeting predatory medical credit card practices

AUGUSTA – On Tuesday, the Legislature’s Health Coverage, Insurance and Financial Services Committee reconsidered legislation from Senate President Troy Jackson, D-Allagash, to better protect patients from predatory medical credit card practices. The final vote was 6-7, with a narrow minority recommending the passage of the amended legislation.

“When it comes to health care, there’s a lot on the line. Patients shouldn’t have to worry about being taken advantage of by predatory credit card companies while they are recovering from surgery, nor should they have to worry about whether or not a doctor is trying to sell them on a credit card when there are better financing options available,” said President Jackson. “This bill is about protecting patients from predatory practices and most importantly, safeguarding their relationship with a trusted health care professional. I’m grateful to the committee members who supported this proposal and hopeful the Senate will follow their light.”

The amended measure – LD 2174, “An Act to Protect Consumers from Predatory Medical Credit Card Providers” – would put basic, commonsense consumer protections on medical credit cards. The proposal also prevents the use of medical debt on a consumer’s credit report or credit score.

LD 2174 prohibits the following predatory practices:

·        A prohibition on the signing up patients for a medical credit card while the patient is in the exam or recovery room; 

·        A prohibition on providers arranging or establishing an application on a patient’s behalf;

·        A prohibition on the false promotion of a medical credit card as having “no interest” if the card has deferred interest.

“Consumer Reports strongly urges you and your colleagues to support LD 2174 to protect Maine consumers from unfair practices in the marketing and use of medical credit cards, which can potentially lead to consumers incurring high levels of medical debt for medical services,” said Chuck Bell, Consumer Reports in written testimony. “These common sense protections will help ensure that consumers will only sign up for medical credit cards that they themselves select and review, and that they will be better protected against making duplicative payments for services covered by other sources of payment.”

Medical debt is prevalent in Maine and across the country. Recent data found that 40 percent of Mainers and about 41 percent of Americans have medical debt. Medical credit cards are marketed as a helpful financing tool, however, this type of credit card often employs practices that can trap patients in debt. According to the Public Interest Research Group, medical credit cards often charge exceedingly high interest rates and skirt consumer protection law regulating traditional credit cards. 

The Consumer Financial Protection Bureau found interest payments on medical credit cards can inflate medical bills by almost 25 percent. People used medical credit cards or loans with deferred interest periods to pay for more than 17 million medical bills from 2018 to 2020, for which they ended up paying $1 billion in deferred interest.

LD 2174 will now go before the Senate and House for initial votes.

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