Today's New York Times carries an article that is rather topical for me at the moment: Patients Turn to No-Interest Loans for Health Care. The article discusses the growing industry of providing loans specifically to cover medical costs. Ostensibly an alternative to putting it on the (usually high-interest) credit card, this new method is merely another finger in the dike, an attempt to prolong the already failed for-profit model of health care by enriching some lenders and putting basic medical needs at risk.
What exactly is this phenomenon I'm talking about?
For $3,500 laser eye surgery, $6,000 ceramic tooth implants or other procedures not typically covered by insurance, millions of consumers have arranged financing through more than 100,000 doctors and dentists that offer a year or more of interest-free monthly payments....
But as the price of health care continues to rise and big lenders pursue new areas for growth, this type of medical financing has become one of the fastest-growing parts of consumer credit, led by lending giants like Capital One and Citigroup and the CareCredit unit of General Electric.
However, we can already detect some of the usual, right-wing media bias at work here. This quote, taken from the first 4 paragraphs of the article, suggests that it's only those patients wanting some sort of gold-plated health care that would turn to an interest-free loan.
This is what we call a lie.
When my fiancé was in her teens, her family was in dire economic straits. They'd just relocated to Washington State, her dad was unable to continue working as a skilled electrician due to injury, but the disability payments hadn't yet begun. My fiancé's teeth had cavities, and as the state didn't then have dental care they qualified for, they had to find the cheapest dentist they could.
Ten years later, most of these fillings are breaking down. One of them has already failed catastrophically - the filling fell out, and in recent weeks she found pieces of her teeth coming out when she brushed. She hadn't had medical coverage these last few years, and like so many other young people in their 20s, was looking for a steady job that would allow her to pay her student loans, her housing costs, and still have enough left over for medical needs. Needless to say, she didn't find that job until last fall.
Now she has medical coverage through her job with a city here on the central California coast. And so she went to the dentist a couple weeks ago to have things checked out. They knew she needed a root canal, at minimum, and sent her off to an oral surgeon.
The oral surgeon told us it was worse than anticipated - the decay had gotten near to the bone, and the tooth - a molar - had to be extracted. And so last week it was taken out. This morning, she goes in to learn what the replacement options are - an implant, or a bridge, or who knows what.
The oral surgeon's office gave us an application for CareCredit - one of the services noted in that NY Times article. And as the receptionist told us - and as I could confirm by sitting in the waiting room and listening to the other patients' conversations - pretty much every patient was using it, for every procedure.
The NY Times wants us to believe that it's only for unnecessary surgeries that people are turning to loans. But as anyone who has had any experience with a dentist knows, if your tooth has to be extracted, it's a VERY necessary act. Infection can get into the bone, and cause truly massive health problems not just in the mouth, but across the body.
My fiancé's dental plan pays 80% of the cost of an extraction - and only 50% of an implant/crown/bridge. Not only that, but they will only pay out $1500 a year for ALL dental care, period. Anything beyond that is on us.
So forgive me, NY Times, if I'm skeptical of your article at its outset. But let's continue with what you did offer.
"As more and more of the costs of care are shifted to consumers, people are going to need more credit," said Red Gillen, a senior analyst at Celent, an insurance and banking research firm. "They are still going to need health care."
Just what this country needs more of - debt. Virtually every day now, Daily Kos' rec list includes at least one diary by bonddad, or Jerome a Paris, or New Deal Democrat, or someone else about the economic and financial damage being done by the subprime crisis, and how perilously close to a general economic crisis we are because of how indebted this society has become. And as many of us argue, this debt is not because people wanted the high-end implant, but instead because the cost of living has outstripped our wages, our ability to pay.
What Red Gillen is saying to us is that the health care system is only going to become even more broken, as the costs of care are shifted to us, as we have to pay for it with debt. It's yet another sign that for-profit health care has failed.
But wait - there's more!
The zero-interest plans are not for everyone. In fact, they are available only to the creditworthy — meaning they offer no help to those among the nation’s 47 million uninsured who are in difficult financial situations.
And creditworthiness is starting to be judged even more stringently, in light of the subprime mortgage crisis’s impact on the debt markets...
Even for those who can get credit approval, the plans make sense only if users are able to make payments on time and close the loan on schedule, typically within 12 months. Otherwise, the loans after defaults can carry interest rates of 20 percent or more — similar to the default penalty on a typical credit card.
Ah, the glorious free market. If you're creditworthy, you're not likely to even need this kind of loan. If you're not creditworthy, you are more likely to need it. So the "zero interest" thing is little more than a predatory lending scam.
The article goes on to detail how the for-profit providers are planning to adopt this credit card-style method of financing health care. Wave of the future, I guess. Nothing surprises me any more about these folks - after all, they are the same people who commit murder by spreadsheet as a basic business practice.
But it's a further sign of how broken our health care system has become. And it's another reminder of how the ONLY solution to this is universal, single-payer care.
Here in California, Democratic leaders in the legislature are trying to push a muddled, likely unworkable reform that will provide health insurance to some. The politics of this are complex, and Republican opposition may doom the entire thing - Calitics has extensive coverage of the matter.
Many of us activists are skeptical of the entire thing. We want REAL reform. We want universal health care. Happily the Sacramento Democrats seem to agree - in 2006 they passed SB 840 - Sen. Sheila Kuehl's Healthcare for All measure that would actually provide universal single payer care. Arnold vetoed it, but committees in both the Assembly and the Senate have passed SB 840 this year, and it remains the solution most popular among the Democratic Caucus. The leadership remains skeptical, however.
It's also gaining support among voters. A Field Poll released last week shows a dramatic shift among Californians: universal single-payer care is now the most popular option, with 36% support - up by 12 points from December 2006. In December 52% said they wanted reform within the current, insurance-based system; now only 33% want that - a stunning 20 point drop.
As Californians see that their only choices now are disease or debt - even IF they have health insurance. And they understand what the best solution is - universal single payer care.
As my fiancé sat down with all the CareCredit paperwork last week, she remembered back to her extensive travels in Europe and sighed. "Why can't we just have universal health care like Europe?"
That's a good question, folks. Should we turn to the solution that worked SO well for the housing market - massive lending - or should we actually do what works? What do you all think?