Humana, Bank Team Up For Card

TAMPA - Just how expensive is health insurance becoming? Here's a clue: A major insurer and a bank are co-sponsoring a no-interest credit card for out-of-pocket expenses.

Humana and Republic Bancorp, both based in Louisville, Ky., say their HumanaAdvance Visa card allows health care purchases to be repaid over six months through payroll deductions.

Armed with such a card, employees would feel protected against unexpected expenses and be more willing to sign up for low-premium plans that carry high deductibles and co-payments, say the insurer and bank.

'They can reduce their premiums dramatically - and the employer's, too,' said Steve Trager, chief executive officer of Republic Bank & Trust. Republic Bancorp is the parent company of the bank, which has two Florida locations, both in Pasco County.

'It's just a brilliant innovation,' said Greg Scandlen of Hagerstown, Md., president of Consumers for Health Care Choices, a nonprofit group that calls for giving patients more power and responsibility in decision-making.

The card avoids both of the downsides in the current financing system, he said. HMO-style prepaid plans that provide security encourage overuse of the system, he said, just as an all-you-can-eat buffet encourages gluttony. Inflation caused by overuse makes health coverage increasingly unaffordable, he said.

However, the alternative - low-cost insurance that comes with huge deductibles followed by high co-payments - presents the opposite problem, discouraging doctor visits to the point of danger, he said. Both patients and medical providers can end up taking a financial hit if insurance leaves too much of the risk on the patient, he said.

'It is very bold of Humana to accept that there are times when bank financing may work better than insurance financing,' Scandlen said.

Humana said it will make the no-interest card, which carries an annual fee of $96 an employee, available to selected employer groups. Employees can get the card without regard to their credit history, the bank's Trager said.

Mohit Ghose, a spokesman for the Association of Health Insurance Plans, said he wasn't sure whether other companies have developed similar cards, but he said many tools are emerging to make health coverage more affordable. 'You're going to continue to see innovation.'