CFPB’s Spotlight on Medical Payment Products Threatens Chilling Effect on Healthcare Access

Health Here Teams With OVN to Streamline Healthcare Payments

The Consumer Financial Protection Bureau (CFPB) is sharpening its focus on healthcare payments, and the result may be that at least for some consumers who have shown interest in payment plans and especially cards, getting and paying for necessary care may be out of reach.

The PYMNTS Intelligence report “The Digital Platform Promise: How Patients Want to Streamline Healthcare Payments” found that 21% of consumers encountered at least some difficulty when paying for their healthcare. The research also showed that 16% said insurance covered less than expected.

Certain demographics may be particularly vulnerable if the range of payment options, including cards and payment plans, is winnowed down. Per PYMNTS Intelligence’s 2024 Women’s Wellness Index, 23% of women who struggle to pay monthly expenses said medical bills are a key reason for distress.

One-quarter of women see financial constraints as a challenge to managing their personal health and well-being, and mothers spend 26% less on their own health than their partners. Given that the average unplanned medical expense in the United States — which is consistent regardless of consumer spending — is $1,310, solutions that spread out healthcare payments over time could better accommodate their paycheck-to-paycheck budgets.

The CFPB’s renewed scrutiny on medical debt, cards and alternative payments comes as 46% of patients cancel their healthcare appointments due to high costs, per the PYMNTS Intelligence “The Embedded Finance Tracker®.” The tracker found that embedded finance has been gaining traction with providers and patients. Roughly a quarter of healthcare firms were mulling embedded finance offerings at the time of the survey, and 11% of millennials had already been using those plans to help triage both expected and unexpected bills, along with 13% of paycheck-to-paycheck consumers with issues paying their bills doing the same.

The CFPB’s Take

The CFPB said Tuesday (July 2) that its examiners reviewed medical payment products, including medical credit cards. It noted that these financial options are marketed to consumers at healthcare facilities, including doctors’ offices or hospitals, to pay for medical services or products.

“Healthcare providers commonly use sales and marketing materials provided by the financial institutions issuing these payment products,” said the CFPB. Examiners have “identified a significant number of consumer complaints” tied to the representations of deferred interest and how providers have promoted, offered and sold medical credit cards to patients.

As to what comes next: “CFPB examiners will continue to assess financial services companies’ oversight of medical providers and will be monitoring marketing materials and incentives offered to enroll patients,” the bureau said.

The door may be opening for new rules governing how, when and even whether healthcare providers and financial institutions can market these (and other) payment options to their patients.

(Recent) Past as Prologue

There’s some prologue here. In recent months, and with the constitutionality of the bureau itself assured, the CFPB has been taking steps to reshape the ways healthcare is paid for and how these payments and products are documented and used in credit reporting.

New rules that seek to remove medical debt from credit reports and cap card late fees are proving popular with the general public. Erasing medical debt, in this case, from credit reports may disincentivize patients from making timely payments, with negative impacts on providers. Providers could stop offering financing options, including payment plans, to patients.