Don’t sign a bank loan in the hospital

Shefali Luthra reports for Kaiser Health News on how unsuspecting patients are signing bank loans in the hospital in order to pay their hospital bills. Some hospitals are partnering with banks as a way to help ensure they are paid in full for their services. While that may be good for the hospitals, it may not be good for the patients.

One insured patient, Laura Cameron, was approached by a hospital employee about taking out a loan while strapped to her gurney in the emergency room. Cameron reported that she was pressured to believe that her only choice was to take out the loan or immediately to pay the $830 she was told she owed out of pocket. Fortunately, she turned the loan down and did not pay the hospital right then, as her total out-of-pocket costs with insurance turned out to be $150.

Advocates suggest that patients should not be signing up for these loans so quickly. The loans, which are often no interest or low interest may sound better than they are. The loans can be tempting because they are available without credit checks or affordability tests. But, you may not need the loan and could be paying the hospital more than you owe. The out-of-pocket costs for the hospital stay may be lower than the hospital suggests, with the insurer’s negotiated price, as was the case for Cameron.

If you have traditional Medicare and supplemental insurance, you may not face this situation during a hospitalization since you should have no out-of-pocket costs. With a Medicare Advantage plan, there is a good chance that you have high out-of-pocket costs. But, beware. An increasing number of hospitals are partnering with financial institutions as a way to ensure that they are paid in full for the care they provide. Many people with insurance have such high out-of-pocket costs that they cannot afford to pay them. Right now, about 15-20 percent of hospitals offer loans to patients.

Advocates argue that patients with low incomes should not need loans to cover costs their insurance does not pay. The hospital should offer them assistance or charity care.

Here’s more from Just Care:

• Financial scams abound: Advice from the Consumer Financial Protection Bureau
• Seven tips to prepare for your hospital stay
• Choose your hospital emergency room carefully
• How to keep your emergency care costs down
• Six things to know about your 2018 Social Security benefits