Californians fall prey to high interest credit card loans while in exam chairs. Here’s a fix

By Holly J. Mitchell and Jen Flory, Special to CalMatters

There are few more nerve-racking experiences than sitting in a dentist’s chair writhing from severe pain. 

You trust the dentist to fix the problem, relinquishing yourself to his or her care, while under pain medication. Sitting in that dentist’s chair, the last thing on your mind would be high-interest credit cards.

But for thousands of Californians, the pain of the medical credit card debt they acquire in that moment extends far beyond the office visit.

Medical credit cards are usually offered for services not covered by insurance, like dental and chiropractic care. They are also offered to people without coverage, including immigrants. But even people with coverage can find themselves signed up for high interest credit cards. They might not even remember signing up for the credit.

If that doesn’t sound right, it’s because it’s not. That’s why our economic justice priorities this session includes Senate Bill 639, which would end situations in which patients are signed up for high-interest cards in high-stress medical situations.

In 2017, Los Angeles resident Kenda Williams went to an emergency room with extreme mouth pain. After a shot of pain medication, and after receiving a prescription for additional pain medication, Kenda was referred to a dentist.

She arrived at the dentist at 9 a.m. the next day, and didn’t leave until 7 p.m., when she came out of her medication-induced haze. In those 10 hours, Kenda received a root canal, $300 worth of pain medication, a bill of more than $9,000, and two high-interest credit cards that she doesn’t remember signing up for.

One card was with Dental Alliance at 28.24%. The other was with Care Credit at 26.99%.

“I don’t remember signing anything,” she said later.

Kenda is unemployed and on Medi-Cal, so she didn’t understand how she was approved for the cards while she was in and out of consciousness. When she understood what happened weeks later, she contacted her insurance carrier only to discover that it hadn’t received a claim from the dentist. The entire cost of her treatment was on the cards.

Kenda’s story is not unusual.

People across the state report problems with medical credit cards, despite previous efforts to regulate how providers offer these products. That is why I proposed SB 639, with help from the Western Center on Law and Poverty.

Western Center advocates and their local legal aid partners have heard countless cases in which Medi-Cal patients are signed up for credit cards, particularly in dental offices, despite the Legislature’s decision to restore Denti-Cal, which provides dental services for people in need.

In some cases, the dentist never submits a request to Denti-Cal for reimbursement of services. In other cases, the patient is billed for services not covered by Denti-Cal. 

Providers shouldn’t market high-interest, third-party credit in high-pressure situations when patients can’t research options. 

Medical credit cards are usually marketed with a zero percent-deferred interest introductory period. Few consumers understand that deferred interest provisions mean they accumulate interest at a high rate during the entire introductory period. 

Those who don’t pay the entire balance in the introductory period, or make a late payment, end up with a huge interest charge that can be larger than the remaining balance.  

Most striking is the disparate impact these provisions have on people who are already experiencing financial distress. “Subprime” consumers are more likely to pay high deferred interest rates than wealthier consumers, which means deferred interest provisions deepen racial and socio-economic inequalities that already exist when it comes to credit and debt. 

While third-party financing may have a place when patients need services they can’t immediately afford, products with deferred interest clauses have no place in medical practice.

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Sen. Holly J. Mitchell is a Democrat representing Senate District 30 in Los Angeles, senator.mitchell@senate.ca.gov. Jen Flory is a health policy advocate with Western Center on Law & Poverty, jflory@wclp.org. They wrote this commentary for CALmatters.