Treasury Dept. and CFPB Investigate Medical Credit Cards and Installment Loans

Three federal agencies have launched an inquiry into “high-cost specialty financial products” used to pay for routine medical care.

The inquiry will include medical credit cards and installment loans, the Consumer Financial Protection Bureau (CFPB), Department of Health and Human Services (HHS) and Department of the Treasury said in a Friday (July 7) press release.

“Financial firms are partnering with healthcare players to push products that can drive patients deep into debt,” CFPB Director Rohit Chopra said in the release. “We are opening a public inquiry to better understand how these practices are affecting patients in our country.”

The three agencies are asking for public input about the prevalence of these specialty financial products and patients’ experiences with them, according to the release. They also seek information about billing and financial assistance issues and healthcare providers’ incentives to offer these products.

After gathering this information, the agencies will consider ways to address any harms caused by the products and actions to take regarding financial companies’ practices around credit origination, debt collection and credit reporting, the release said.

“Hearing directly from patients about their experiences will help shape policies that can prevent families from incurring medical debt,” HHS Secretary Xavier Becerra said in the release.

Deputy Secretary of the Treasury Wally Adeyemo said in the release: “Treasury is proud to partner with agencies across the [President Joe] Biden administration to crack down on these often-abusive practices that take advantage of patients during vulnerable times. We look forward to receiving stakeholder input so that we can better protect patients and consumers.”

The CFPB reported in April 2022 that it sent over 750,000 complaints involving medical debt to companies for review and response in 2021.

Fifteen percent of all debt collection complaints involved attempts to collect on a medical bill, the agency said in its complaint bulletin “Medical Billing and Collection Issues Described in Consumer Complaints.”

The CFPB added in the bulletin that people often don’t have the time to shop around for medical care — and often make decisions about it under stressful circumstances.

“People do not generally plan in advance” for medical emergencies, it said at the time.