SmartHealth PayCard Debuts as the First and Only Credit Card Dedicated to Medical Expenses
The SmartHealth PayCard recently debuted, and it may change how Americans pay for medical care. As of now, this is the first and only credit card solely dedicated to paying medical expenses. According to the terms and conditions page accessed through SmartHealth’s application page, the issuer of this new credit card is 1st Community Federal Credit Union. This is a small Texas-based credit union that restricts membership to only a handful of counties in Texas. It’s odd that a groundbreaking credit card like the SmartHealth PayCard would partner with such a small financial institution. SmartHealth employed i2c Inc. to facilitate the creation of this new credit card. This banking technology platform provider may have had something to do with choosing 1st Community as the issuer of the PayCard. It’s unsure what the financial reasoning is. Nevertheless, this card does have some unique features that may help both patients and providers
What does the SmartHealth PayCard Do?
The PayCard differs from existing healthcare payment options. It’s neither a Health Savings Account (HAS) nor an insurance plan. It functions almost exactly like a regular credit card. In fact, it’s part of the Mastercard payment network. As such, you must apply for the SmartHealth PayCard just as you would any other credit card. Applicants can receive credit limits between $3,000 and $15,000. A big difference between this card and other credit cards, though, is that cardholders can only use this card for medical expenses. However, this can include cosmetic procedures, which many health insurance plans typically do not cover. Cardholders can pay for copays, deductibles, co-insurance, and other out-of-pocket expenses at any provider that accepts Mastercard. Unlike insurance, you don’t have to find a provider that is in network.
Another feature of the SmartHealth PayCard is that it actually offers cardholders complimentary emergency medical coverage. This coverage is not health insurance and doesn’t comply with ACA guidelines. Rather, it’s what the industry refers to as an indemnity reimbursement plan. Basically, the SmartHealth card will cover hospital admissions, outpatient ER visits and ambulance use up to $5,000 a year. You can almost see this as supplemental emergency health coverage. Cardholders can only use this coverage for three occurrences per year. Additionally, cardholders receive up to $5,000 in accidental death coverage to help family pay for funeral and other expenses. SmartHealth plans to roll out further benefits in the future, including discounts at participating providers. It’s also possible that this card will offer cardholder rewards at some point, although there are no further details about this feature at the time.
Is It Really That Helpful?
As of right now, the SmartHealth PayCard may benefit healthcare providers more than it does patients. This comes down to numbers. The card’s official website boasts a low APR. However, the website doesn’t provide the exact number in writing. After calling customer service, the team at BestCards.com found that the APR is a fixed rate of 18%. That’s not unreasonable, but it is slightly higher than the national average. The PayCard functions almost exactly like a regular Mastercard at medical facilities. Most providers in the U.S. already accept Mastercard as a method of payment. Therefore, there may be little incentive to apply for this card if you currently have a lower-interest credit card. Perhaps the only benefit of this card right now is the fixed indemnity plan. For consumers receiving treatment for chronic illnesses, this card may also help streamline expense tracking. Cardholders have access to a member website, mobile app, and record keeping resources. Providers, however, have more to be excited about. For starters, providers don’t have to pay a fee to accept the SmartHealth card. Furthermore, it may reduce the time and money spent on accounts receivable, billing, and collections. Currently, many patients may defer paying medical bills for lack of funds. Many medical providers dedicate a large portion of their resources to collecting payments from patients. SmartHealth leadership is hoping that if patients have a means to pay for healthcare expenses up front, it can reduce the time and money spent on collecting payments.
Most of what the SmartHealth PayCard promises to do is purely conjecture at this point. Time has yet to tell how this credit card will affect the health care industry or whether patients will be onboard with it. At best, it may have a similar effect as HSAs, which still see a limited acceptance rate among many American consumers. The relatively higher interest rate, association with a very small bank, and offshore customer service may deter some consumers from applying for this credit card. At the same time, these details may spark other issuers to start offering medical expense-related financial products.
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