In an effort to address crushing medical debt that can result in long-term consequences, State Senator Sara Feigenholtz championed a law to encourage transparency so patients know what they are signing before they finalize credit agreements.
“Medical payment plans and medical credit cards offered by certain lenders are often deferred-interest financial products that are increasingly being used to finance health care, including dental care,” said Feigenholtz (D-Chicago). “When not offered as a direct payment plan with a dentist’s office, these services can set high interest rates, pre-charge for treatments and ultimately drive patients into a cycle of debt.”
The Consumer Financial Protection Bureau reported last year that the typical annual interest rate for a medical credit card – often used for dental financing – is over 26%.
The new law protects Illinoisans from predatory financing arrangements by prohibiting dentists and their employees from advertising third-party financing during a patient’s treatment or while they are sedated or under anesthesia. Additionally, dentists cannot arrange third-party financing, fill out financing applications or submit any applications on a patient’s behalf. Further, patients and their guardians must receive a disclosure when discussing financing options with their dentist.
“Once patients receive a bill, they see they’re on the hook for a significant amount of interest,” Feigenholtz said. “This law promotes transparency up front so patients can make informed decisions about financing their care.”
House Bill 4891 was signed into law Aug. 2 and takes effect Jan. 1.
