Breaking Down Hearing Aid Financing Options for your Audiology Office
You may find it surprising that only 20% of patients with hearing loss get hearing aids. The biggest reason so many patients don’t get these potentially life-changing devices?
High upfront costs, which can be as much as $6,000 for a premium set of hearing aids.
Not only are hearing aids expensive, only 5 states in the US require insurance to partially or fully cover adults’ hearing aids. That leaves most hearing loss patients responsible for paying the difference out-of-pocket if they want hearing aids, and so many opt out for financial reasons.
General Process for Hearing Aid Financing
When a patient isn’t able to pay for the entire cost of the hearing aid out of pocket, typically they’ll apply for a credit-based financing program. The patient will apply to receive a small loan to cover the costs and pay it back over time, plus interest.
The patient needs to pass a credit check that determines the risk involved with extending a line of credit to them. The check is done using some combination of credit score and proof of income. Then the patient receives a timeframe for the loan, usually between one and three years.
However, this traditional financing process only works for patients with high enough credit scores or incomes, which excludes a big percentage of those who need access to hearing aids. These patients need to have a wider variety of financing options laid out. Let’s compare these credit-based plans with some alternatives so you can get a bird’s eye view of the options available to your audiology office.
Option 1: Credit-Based Plans
Audiology practices primarily offer credit-based repayment plans through lenders like CareCredit or GreenSky. These lenders provide patients with a pre-loaded credit card that can only be used for healthcare-related expenses.
The downside of credit-based plans is that lenders tend to rely solely on a patient’s credit score or income verification for approval. If a patient has bad credit or no credit history, they’re unlikely to be approved. Most traditional credit-based lenders require a credit score of at least 640 for approval.
The credit check also determines the interest rate your patient pays, which can run north of 30% for patients with bad credit. Because the average FICO score in the US is around 690, about half of all people may not qualify for these credit-based plans.
Option 2: Workplace or Federal Benefits
Another option for patients is to check if their employer provides workplace benefits that cover the cost of a hearing aid. Patients that don’t have workplace benefits may be able to apply for a flexible spending account (FSA) or healthcare savings account (HSA) through their employer.
An FSA allows patients to set aside pre-tax dollars from their paycheck, which are allocated to paying for healthcare expenses that aren’t covered by insurance. When a patient makes a purchase, they submit receipts to be reimbursed.
An HSA is slightly different from an FSA. HSAs are tax-advantaged medical savings accounts to which patients can defer their taxable income for healthcare expenses. Usually these sorts of plans are available to patients with a high-deductible insurance plan.
Option 3: Pay-Over-Time Plans
For patients that don’t qualify for credit-based repayment plans and don’t have workplace benefits, another option is a pay-over-time plan. These plans allow your practice treat many more patients, even those that have been shut out from traditional medical financing plans.
Pay-over-time providers like Healthcare Finance Direct (HFD) are a better option for audiology offices who want to increase the accessibility of care for patients with difficult economic circumstances. These plans allow the patient to pay their balance over time through monthly debits from their bank account.
Unlike credit-based lenders, HFD uses a complex data-driven underwriting algorithm to determine eligibility without charging exorbitant interest rates. This formula considers data from thousands of patients to determine the risk of the loan.
You and your patient have access to a payment portal that offers support services, auto-debits their accounts, and uses a proven collection strategy to ensure your practice receives payment.