Health gift-card fees can make you sick

Adding a new twist to the growing gift-card industry, the Healthcare Visa Gift Card from Pennsylvania-based insurer Highmark is designed to be used exclusively for health-care products and services. But as gift cards go, this new one is much like the old ones, with enough fees and restrictions to give you indigestion.

Though the health-care gift card is billed as "a unique way to let loved ones know just how much you care," it’s little more than a bank-issued gift card with all the typical ailments. Want to buy one? That’ll cost you $4.95, plus a minimum $1.25 shipping fee. Lose it? Pay $4.95 for a replacement. Want to close out the account and take the balance? That’s another $6.95. Still have a balance after eight months? A monthly $1.50 fee will be deducted from what’s left.

So what do you get for all this? Not much. Unlike other bank-issued Visa gift cards, which are valid at most merchants that accept Visa, the Highmark card is supposed to be used only for health-related purposes, such as doctor and hospital visits, dental work, eyeglasses, medications, ambulance services, health spas, and so on. It can be loaded with as little as $25 or as much as $5,000.

It sounds good in theory, but there’s a big problem. The Visa electronic payment system isn’t capable of limiting the individual products purchased with a card, at least not yet. So Highmark does the next best thing: It limits card usage to businesses that typically market health-care services and products. But falling into that category are discount stores such as Target and Wal-Mart, supermarkets, and wholesale clubs (not to mention the candy aisle of your local pharmacy). That means your elderly aunt can use the card to support her cigarette habit, satisfy her sweet tooth, or buy just about anything else her heart (as unhealthy as it may be) desires.

What to do. If you would like to help a loved one pay for health care, there are better ways to do it than buying a gift card. You can simply write a check to his or her doctor for the next visit or pick up the cost of a prescription.

If you really prefer to give a gift card, consider one from a health-care retailer, such as a pharmacy. While you won’t prevent recipients from using the card to buy soda and Cheez Doodles, you will avoid saddling them with a bunch of fees and other annoyances common to the Healthcare Visa Gift Card and other bank-issued cards. —Anthony Giorgianni