Group Medical

Healthcare Credit Cards – Charge It to Your Health
by Beth Bierbower

You must be familiar with health savings accounts by now. Health savings accounts, which have been around for a few years, are being touted as the next great thing to help consumers pay for out-of-pocket healthcare costs. They’re appealing for a number of reasons: they support consumerism, they make healthcare more cost efficient, and they offer a better way to save for medical expenses. However, one of the concerns employers have is whether the employee will accumulate enough money to cover their medical expenses.

Average out-of-pocket costs for employees, such as co-payments, coinsurance, and deductibles, are expected to increase 10% to more than $1,700 in 2008, up from from $1,576 in 2007, according to Hewitt Associates. Thirty percent of Americans say that a family member has delayed medical care because of payment problems, according to a 2006 Kaiser Family Foundation survey.

You can offer a healthcare line of credit to help consumers to fill in the gap. It allows the consumer to finance their healthcare expenses until they can build up funds in their HSA account or replenish the funds. The healthcare credit card can be used for health-related expenses at locations that provide health services and products.

Many insurers are now offering these cards, some of which have low annual fees. One offers no interest on purchases repaid within six months. When using these healthcare credit cards along with HSAs, consumers can spread payments over time with no penalty. When consumers use the card for health purchases, they have the added tax benefit of reimbursing themselves from their HSA funds.

The healthcare credit card is a great tool for employers to offer with consumer directed health plans including HSAs. Employees who feel protected against unpredicted medical costs are more inclined to commit to low-premium plans with higher deductibles.
In case you need help explaining the benefits of healthcare credit cards, think about these things:
• Employees are more likely to participate in employer benefit programs when they can use a line of credit in a time of need.
• Healthcare credit cards encourage employee participation and satisfaction in healthcare programs while helping reduce administrative expenses.
• Consumers and providers appreciate the simple and convenient payment process.
• Healthcare credit cards help consumers track health expenses. They also offer consumers the tax advantage of using HSA funds to reimburse themselves.

As you deal with open enrollment this year and you prepare for next year’s selling cycle, keep in mind the protection these healthcare credit cards provide when people have unexpected expenses, when they’ve exhausted their accounts or when they haven’t accumulated sufficient funds in their HSA. These cards help you demonstrate that you have your clients’ best interests in mind and their financial viability at heart. Use the cards to your advantage. Your clients certainly will.
––––––––––
Beth Bierbower is vice president of Product Innovation for Humana Inc.