PrimaHealth Credit will now lend to borrowers looking to pay for addiction treatment

Jonathan Shieber
An assortment of pill bottles set against the backdrop of the American flag, 1982. (Photo by Alfred Gescheidt/Getty Images)

PrimaHealth Credit, which offers loans to borrowers to pay for medical treatment, is expanding its pitch to cover addiction treatment centers.

Currently, PrimaHealth offers loans for elective healthcare procedures like plastic surgery, LASIK, dental surgery and orthodontics. The move into addiction treatment is both a sign of how broken the American healthcare system is when it comes to substance abuse and addiction -- and mental health therapies more broadly -- and an indicator of the potential size of the market.

According to the company, PrimaHealth won't charge any interest for most of its loans -- depending on the creditworthiness of the borrower. Instead, the company will make money by charging a fee to the treatment center. If the borrower has poor credit, the APR on loans is 19.99%, according to a spokesperson for the company.

“Addiction treatment centers are under-served in relation to viable financing options to offer their patients,” says Brendon Kensel, founder and chief executive of PrimaHealth Credit, in a statement. "The burden of out-of-pocket costs falls on their patients, who often are unable to start the treatments they urgently need.”

Spending on substance abuse treatment in the U.S. is expected to reach $42.1 billion this year, with patients paying about $3.7 billion out-of-pocket for treatment and services, according to data from the Substance Abuse and Mental Health Services Administration cited by the company.

“Out-of-pocket expenses are often a key barrier to patients proceeding with care,” says Fritz Quindt, marketing director at A Better Today Recovery Services, a leading addiction treatment provider based in Scottsdale, Ariz., in a statement. “PrimaHealth Credit offers a new approach to helping patients fund the treatment they need. Their easy-to-use platform, customer support, and results speak for themselves.”

The company wouldn't comment on the number of loans it has issued for elective surgeries.

PrimaHealth uses an algorithm to determine the credit-worthiness of potential borrowers and provides a payment management solution for treatment centers. Using underwriting models that use 200 determining factors, the company can issue instant credit decisions and offer different payment plans for borrowers, according to a statement.

For providers, the company offers reduced administrative costs and manages payment services, accounts receivable and credit reporting. PrimaHealth also said it would help addiction providers meet regulatory requirements to collect co-pays and deductibles.

The company's services are currently available in Arizona, California, Florida and Texas.