Buy Now, Pay Later Firms Entering the Health Care Space

Breaking up payments can offer short-term relief but also overextend patients.

BNPL Medical

Buy now, pay later (BNPL) services have become increasingly popular as a payment method for online shopping and even travel, and major players are creeping into the world of health care. But while breaking up medical bills can provide some short-term relief, critics worry about the lack of protections in the BNPL industry and the threat of overextending patients' budgets.

Key Takeaways

  • BNPL services can break up payments into installments over the course of six weeks or longer.
  • The approach can make medical bills feel more manageable for patients, but it can still overextend their finances.
  • Critics also worry about the lack of consumer protections offered by BNPL services compared to traditional financial products.

BNPL Services Present an Inexpensive But Complicated Alternative to Pay Medical Bills

BNPL services like Afterpay, Affirm, and Sezzle offer consumers the chance to pay off online purchases, travel, and other major purchases over time. In some cases, these companies don't charge interest or fees.

The adoption of BNPL services exploded during the coronavirus pandemic. According to a report from the Consumer Financial Protection Bureau (CFPB), BNPL loan volume grew from $2 billion in 2019 to $24.2 billion in 2021.

While most purchases made with BNPL loans are for consumer products, such as apparel and other personal effects, health care products and services also saw a significant increase, going from $10 million in 2019 to $230 million in 2021.

While much of that is made up of health care products with retailers like CVS, some BNPL companies are working with medical providers to allow customers to pay their medical bills.

For example, EyeBuyDirect has partnered with Afterpay to allow customers to buy prescription and non-prescription eyewear, and patients of WellNow Urgent Care can use Sezzle to finance their medical bills in five states. Companies like Walnut and PayZen have launched specifically for health care-related expenses.

On the surface, having more options to pay off medical bills might seem beneficial, particularly if the service doesn't charge interest or fees—putting health care costs on a credit card can be incredibly costly if you can't pay it off quickly.

But BNPL services, also called "care now, pay later" services in the health care industry, don't come with the same consumer protections as credit cards and other financing options available to health care patients. Some critics also worry that the new financing option could cause consumers to overextend themselves financially with what appears to be a more direct pathway to big-ticket medical services, particularly ones that aren't covered by insurance, such as Lasik, fertility services or cosmetic procedures.

Even if the payments are interest- and fee-free, you're still paying them with your credit card or checking account, which affects your ability to pay for necessary expenses. While it offers a shortcut for providers to get paid, it could ultimately put the patient in the same amount or more debt.

The CFPB has noted the potential risks of these services to consumers and shown interest in taking action to rein in the relatively new industry.

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. Consumer Financial Protection Bureau. "Buy Now, Pay Later: Market trends and consumer impacts."

  2. Eyebuydirect. "How to Use Afterpay: The Easiest Way to Pay for Eyewear."

  3. PR Newswire. "Sezzle Partners With WellNow bringing Buy Now, Pay Later to Urgent Care."