Here's a thought: say your insurance doesn't cover Lasik surgery. Or dental (or other) implants. But you want (or need) that procedure, and the bank account's running a bit low.
What to do?
Well, if you've got an HSA, or access to an HRA or FSA, then you may have enough to cover the cost (or can get there quickly enough) that it's not an issue.
But what if you don't?
Well then, how about borrowing the money (ah, debt: the American way!) to pay for it?
Believe it or not, there's a growing number of folks who are doing just that. And the providers themselves are helping.
Anyone who's bought (and financed) a car in the last 50 years knows that the dealership has a "finance guy" just itchin' to talk terms and deals. After all, it's extra profit, and guarantees that the inventory will move. Taking a nod from Crazy Larry's Used Car Emporium, more and more doctors (and, of course, other providers) are offering financing options for their patients.
I began to see this a few years ago, when Lasik was $5,000. Per eye. Not many folks could afford that much all at once for what is, generally, an elective procedure. But make it $29.99 (per month), and all of a sudden it becomes a lot more doable.
"But as the price of health care continues to rise and big lenders pursue new areas for growth, this type of medical financing has become one of the fastest-growing parts of consumer credit, led by lending giants like Capital One and Citigroup and the CareCredit unit of General Electric."
Depending on how one sets it up, there may even be some positive tax results from such deals.
According to the Wall Street Journal, "(t)he mortgage-lending market may be a mess, but lending people money to get health care is a booming business." This "new" market is attracting some big names in the financial services sector: Capital One and CitiGroup, for example, are introducing new, zero-percent loans for qualified customers. Like the discount cards we've also discussed, these come with a built-in time bomb: pay off the loan on time, or the rate skyrockets.
Still, for folks on a tight budget (or with unfunded high deductibles), these kinds of loans may be appropriate.
And it's not just the financiers who are putting these deals together. Insurers are also looking for creative ways to make a few extra bucks. In fact, at least one company is touting a product that encourages (and facilitates) its insureds to take out loans to cover unreimbursed expenses.
Is this "a good thing?"
It depends, one supposes, on how much more debt a given insured/patient can really handle. And on whether providers will "hard sell" services that may not be medically necessary, in order to bolster their own practice's bottom line.
There's another factor at play here, as well. If you've been watching the news, you know that the credit market is taking a tumble, and "creditworthiness is starting to be judged even more stringently, in light of the subprime mortgage crisis’s impact on the debt markets." So if you want (or need) that non-covered procedure, you'd better be sure that all your other debts are caught up, as well.
Oh, and one last thing: as we've discussed before, non-covered medical expenses aren't eligible for in-network pricing, so you're on your own when negototiating both the cost, and the financing, of these procedures.