What is the Future of Healthcare Credit Cards?

Jacob Harper |

money and healthcare

General Electric (GE) revealed they are actively shopping the healthcare financing arm of their massive GE Capital division. Financial house Goldman Sachs (GS) will be handling the sale, which is rumored to approach $2 billion in value.

As GE reportedly continues to downsize and spin off pieces of GE Capital, the future of healthcare financing looks dire. GE launched their CareCredit program back in 1987, as a way for uninsured people to use a credit card to pay off medical expenses.

But GE was long criticized for the high interest rates the cards would charge, especially considering the card users were largely poor. In June GE settled with the New York attorney general’s office for nearly $2 million concerning complaints about the cards, citing the disproportionate targeting of the elderly and poor, rushed doctor’s office application process, and an interest rate as high as 26.99 percent.

Citi (C), another company actively engaged in medical credit cards with their Citi Health Card, charges an even higher rate of interest at 28.99 percent. Usury rates in New York are capped at 25 percent.

As public access to healthcare continues to improve, the the future of healthcare credit cards becomes more uncertain. The Affordable Care Act, barring any successful challenges in the House, is six months away from total implementation. As the ACA will require every individual be insured, and healthcare credit cards are used primarily by the uninsured, the need for private, high-interest healthcare financing could soon become totally obsolete.

GE is down .16 percent to 23.27. Their stock is up 8.3 on the year.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
C Citigroup Inc. 45.89 -1.26 -2.67 22,579,772
CLNE Clean Energy Fuels Corp. 4.40 0.10 2.33 2,319,828
GE General Electric Co 29.54 -0.35 -1.17 25,138,576
GS The Goldman Sachs Group Inc. 161.48 -3.65 -2.21 2,764,985

Comments

Emerging Growth

International Western Petroleum Inc

International Western Petroleum Inc is an exploration-stage oil and natural gas company. The Company is engaged in the acquisition, development, and exploration of crude oil and natural gas properties in…

Private Markets

D-Wave

D-Wave Systems is the first quantum computing company. Its mission is to integrate new discoveries in physics, engineering, manufacturing, and computer science into breakthrough approaches to computation to help solve…

Uber

Uber connects riders with safe, reliable, convenient transportation providers at a variety of price-points in cities around the world. Uber makes money from charging their drivers 20% of the fare…