Farley Santos

This is a long introduction, but -- I promise -- is worth the read.

The General Law Committee, of which I am a member, overwhelmingly passed HB 5127, An Act Concerning Medical Credit Cards, a consumer protection bill to ensure Connecticut patients are not pushed into high-interest credit products while seeking medical care.

This is a big step in curbing the use of medical credit cards, which are third-party financing products marketed specifically for health care expenses.

They are often presented as “no interest” options, but many carry interest rates exceeding 30% and include deferred-interest terms that can add substantial costs if the balance is not paid off within a promotional period. In many cases, interest accrues from the date of purchase and is applied retroactively to the full amount if even a small balance remains.

According to a study by the Consumer Financial Protection Bureau, patients who were assessed deferred interest paid, on average, 23% more than the original purchase price. Nearly 40% of subprime cardholders did not pay off their balances before the promotional period ended. There are approximately 66,000 deferred-interest medical credit card accounts in Connecticut.

Patients have reported that they did not fully understand they were opening a credit card account. Some believed they were signing up for a provider payment plan. Others were offered these products while in waiting rooms, exam rooms, or even while under stress or medication. Once a medical credit card is used, patients may lose the opportunity to negotiate a lower bill or enroll in a provider’s standard payment plan that may offer better protections under state law.

HB 5127 is narrowly tailored to address these concerns. The bill does not regulate banks, interest rates, insurance benefits, or clinical care. Instead, it focuses on how medical credit cards are marketed and processed within health care settings, particularly when patients may be vulnerable.

The bill would:

• Prohibit providers from marketing or promoting medical credit cards in patient care areas such as waiting rooms and exam rooms.

• Ban financial incentives or kickbacks to providers for enrolling patients in these credit products.

• Prevent providers and staff from completing or assisting with credit card applications on behalf of patients.

• Prohibit charging a medical credit card before services are provided.

• Protect Medicaid and Medicare patients by prohibiting the use of medical credit cards for covered services, and require clear disclosure to privately insured patients that credit is not required to receive care.

• Require written disclosures explaining deferred-interest risks when information is provided outside of care settings.

• Ensure patients affirmatively agree to ancillary products and can return unused items for a refund.

Violations would be enforceable under the Connecticut Unfair Trade Practices Act (CUTPA), using Connecticut’s existing consumer protection framework.

This legislation is about drawing a clear line between medical care and financial products. Patients should be focused on their health — not navigating complex credit agreements in moments of stress or vulnerability. My goal is to promote transparency, prevent coercion, and ensure Connecticut families are protected from unnecessary medical debt.

A huge shout out to my colleague, Rep. Gary Turco, for introducing this legislation, which passed out of committee by an 18-2 vote. The next step is for the House and Senate to possibly take it up and debate it before full votes in both chambers.