OAKLAND, September 11, 2023 — California Attorney General Rob Bonta today submitted a letter to federal agencies urging the adoption of regulations on medical payment products, which are increasingly being used by patients across the country and too often lack appropriate safeguards. While patients may use products such as medical credit cards and installment loans to pay for healthcare-related bills, such products can leave users with crushing debt and long-term financial hardship, often in situations where they might have been eligible for payment reductions or charity care. In his letter today, Attorney General Bonta urged the federal government to adopt regulations and statutory protections to help safeguard patients who may need to use such products.
“The mounting cost of medical care in our nation is a crisis — one that disproportionately affects our most vulnerable communities,” said Attorney General Bonta. “It’s no wonder that more and more patients are having to turn to products like medical credit cards to pay for their healthcare bills. While such products may appear to be a lifeline to paying care in the short-term, users risk being saddled with high interest rates or getting trapped into years of debt. I urge the federal government to act swiftly to ensure medical payment products can be used safely, and patients are protected from unnecessary financial harm.”
Today’s letter by Attorney General Bonta is addressed to the U.S. Department of Health and Human Services, Centers for Medicare & Medicaid Services, the Consumer Financial Protection Bureau (CFPB), and the Department of Treasury, which are seeking comment on medical payment products. The CFPB has found that these products have become more prevalent in recent years and are likely harming patients who do not appear to fully understand the financial risks associated with them.
The high cost of medical care is a crushing financial reality for many Americans — a burden disproportionately borne by vulnerable communities. In California, 52% of Latino residents and 48% of African American residents reported having medical debt, as opposed to only 28% of white residents. Californians with lower incomes are far more likely to report having medical debt than those with higher incomes. Such disparities and inequalities are exacerbated by the increasing use of medical payment products, which often have high interest rates that can trap financially struggling patients into a cycle of debt.
In his letter today, Attorney General Bonta called for federal regulations and safeguards to help address these issues and protect patients from financial harm. Recommendations in the letter include:
- Designating medical credit card debt as medical debt, not consumer debt, thus ensuring users receive statutory protections.
- Ensuring providers properly screen patients for financial aid and charity care before they are offered a medical payment product.
- Limiting enrollment in medical payment products in provider offices (when patients are often drowsy, in pain, or distressed).
- Providing patients with written notice of financial assistance and potential eligibility for charity care.
- Making reasonable efforts to notify patients whether insurance fully or partially covers their medical expenses.
- Reducing cost-sharing responsibilities to reduce patient need for medical payment products.
The California Department of Justice’s Healthcare Rights and Access Section works proactively to increase and protect the affordability, accessibility, and quality of healthcare in California. These attorneys monitor and contribute to various areas of the Attorney General’s healthcare work, including nonprofit healthcare transactions; consumer rights; anticompetitive consolidation in the healthcare market; anticompetitive drug pricing; privacy issues; civil rights, such as health equity, reproductive rights and LGBTQ healthcare-related rights; and public health work on tobacco, e-cigarettes, and other products.
A copy of today’s letter can be found here