The news: Senators requested information from Synchrony and Wells Fargo regarding their credit cards designed for medical expenses.
Synchrony told Bloomberg that it offers products responsibly with “clear, simple, and transparent terms” and that it’s working with senators and public officials to respond to the information request.
Digging deeper: The senators want to shed light on potentially harmful and predatory behavior in the medical payments space.
Why it matters: Affordability is a major problem in the US healthcare system. Forty-one percent of US adults are in healthcare-related debt, according to Kaiser Health News. US medical debt topped $195 billion in 2019.
Financial institutions (FI) and fintechs have sought to close the gap between what patients can afford versus the cost of medical care with credit cards and—more recently—with buy now, pay later (BNPL) products.
But closing this gap has raised concerns that some of these products may be doing more harm than good, particularly for financially vulnerable patients. The senators pointed out that some patients may go for a medical credit card or loan because they’re unaware of more affordable and less risky options at their disposal—like charity care.
Senators aren’t the only ones paying attention to medical credit cards—the Consumer Financial Protection Bureau has also had them on their radar, though the agency hasn’t taken any action toward providers.
The big takeaway: The information provided to senators can shed light on how issuers in the medical sector operate—and could lead to a larger probe from regulators.
This article originally appeared in Insider Intelligence's Payments Innovation Briefing—a daily recap of top stories reshaping the payments industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.