The Biden Administration is warning consumers against the risks of the high interest rates from medical credit cards and medical loans.
Patients in the U.S. paid an estimated $1 billion in deferred interest on medical financing from 2018 to 2020, according to a report released May 4 by the Consumer Financial Protection Bureau.
These interest payments can increase medical bills by almost 25 percent, with interest rates reaching as high as 27 percent after promotional periods wherein users pay no interest, the report said.
These medical financing options most often target patients with lower incomes, no insurance or with lower credit scores.
In the event that the patient is unable to pay their bill, medical providers often carry the risk, which can deter them from offering care to people "assumed to have limited access to credit or designated by a financial company as being a high-credit risk, including people with limited English proficiency, older Americans, and people with lower incomes," according to the report.