With Affordable Care Act firmly in place, point-of-sale lenders fill a gap on health care purchases

On the heels of the Supreme Court decision to uphold the Affordable Care Act, point-of-sale (POS) lenders see opportunities to meet the credit needs of consumers struggling to meet out-of-pocket costs.

Why should we care?
As U.S. consumers look for new ways to meet their health care costs, financial services providers are stepping in to offer solutions. Banks are also buying POS loan companies to enhance their reach, exemplified by Fifth Third Bank’s planned acquisition of Provide, a financial services company focused on health care that includes a lending toolset. Earlier this year, Synchrony Financial acquired Allegro Credit, a POS lender in the health care space. In addition, in 2019, Ally Financial closed its acquisition of POS lender fintech Health Credit Services. With the ACA ruling, Ally sees health care as a new frontier for its offerings. “The ACA is a big impetus for our business," Hans Zandhuis, head of Ally Lending, said in a recent interview. "Consumers are taking on more responsibility for health care payments, and that trend isn't going away." In the past couple of years, POS lending has been expanding beyond retail to include categories like rent and health care. Time will tell if adoption for health care purchases becomes common and consumers are able to avoid the risks. A recent study found that over the past two years, 43 percent of those who used “buy now, pay later” services were late with a payment.