I got the following (below) a few minutes ago. Is this anti-consumer or just 'good business'?
I'm going to be asked by my older clients: "Al, if I let Blue Cross have access to my checking account how can I be assured they won't wipe me out?" Or "Al, say I cancel the plan and go to a different carrier, how can I prevent Blue Cross from continuing to take my money?"
I don't know the answer because I've never in my entire life ever given anyone a green-light into my bank account. If you are comfortable with it, fine, but having spent 25 years on the IT (computer) side of these systems, no way would I do this with my own account. (I won't even use a debit card!)
Anyone have some good answers? Personally, I think that BC makes enough money to not force people to accept the company's way of doing things. If they made an argument that this would lower premiums, I might see it, but you know, I know, and everyone's NAA hating dog knows that this is just another way for BC to add to their already very 'blue' bottom line.
(Me? Cynical? Moi?)
Al
Dear Blue Cross Agents;
$2 Administrative Fee for California Paper Bills - Begins July 1, 2007
Starting July 1st, your clients who receive paper bills will see a $2 administrative fee on their bills. We are sending information with June, July and August bills that lets members know about this fee and gives them a short form to fill out if they want to avoid this fee by signing up for the Checking Account Automatic Premium Payment program. The Monthly Checking Account Automatic Premium Payment authorization form is on the agent website under forms and documents.
Note: This administrative fee does not apply to Tonik members, regardless of how they pay their premiums.
Remember, postage goes up again on May 14th - another great reason for your clients to stop paying their bills the "old fashioned way!" If they sign up for automatic premium payments, they will avoid the administrative fee, avoid the increased postage cost and won't have to worry about missing a bill payment.
My med supp companies won't accept monthly payments unless it is drafted. None of my clients have had a problem. Its cheaper that way compared to semi annual or quarterly. It also prevents lapses from happening if someone isnt around to pay the bill.
I understand the logic, a lot of companies are doing this sort of thing. But you would think with all their high paid PR people they could present it a different way. "These are our premiums. We'll give you a $2 per month discount if you sign up for our auto pay".
Just how I would do it if I ran the world (scary thought that it is )
Well I know this is common way of doing business, lets face it we have to make things simple and cost effective for these companies, not like we expect companies to actual spend an extra dollar here or there on service. Well going back to the days of AOL and others many are very leary of giving these companies access to accounts and can anyone deny the improper usage by some companies if not down right abusive tactics they employ. What I recommend is setting up a special account one can transfer minimun amount of money in (generally free accounts many banks offer) or use a credit card since you can actually challenge and stop improper billing with a credit card and actually get your money back unlike Debit Cards or Bank Drafts.
The insurance company's have come to the realization that EFT's use less man power instead of 50 people that are paid by the hr. to open an envelope and pross. paperwork.....I have never had a prob. with a co. over drafting a prem........
I'm not convinced it has anything to do with saving the insurance company a few dollars a day to have someone open an envelope and process the payment. A lot of people send in payments electronically, they still get charged, since they send it from their bank, rather than setting up an EFT transfer from the carrier.
Insurance companies know that EFT's prevent the policy from lapsing. People put off payments for a few days since they are short on funds, and then decide not to pay it, but to take their family vacation instead. With
EFT, people just assume they have to pay it, before they pay for the extras in life, rather than after.
I have been overcharged by people doing EFT's, though I will say it has always been resolved. I get very nervous about them, and frequently just pay the extra $2 for paying it manually, since this is becoming common practice with a lot of companies.
Let me save the $2 by taking online billing. Don't make me have EFT to save it. Unfortunately, I've lost that argument :(
Many of my clients use credit card and get frequent flyer miles for their premium payments. This is nothing new, Health Net has been charging $5 for this service for years now.
Every month I get those premium not received yet letters, and of course they are all monthly/bi-monthly billing clients.
The other problem is "grace period". 30 days to get the premium in, but most insureds do not realize that they are technically uninsured until that premium has been received and credited.
I have had in the past clients who insisted on using the grace period every month. Sure enough one guy ended up in the hospital and guess what, the carrier told the provider that there was a policy in grace, but they could not commit to paying any claim until the overdue premium was actually received and posted. Ended up a big mess.
I seldom advise billing and either use credit card or EFT. It works out so much better and these situations are eliminated.
State Farm has a similar policy. ( I know because I'm an insured)
I've run into carriers that will only take EFT. I simply explain it to clients and if they don't like it then move to another carrier. Looking back over the years I had alot of EFT problems when I did p and c. But the health policies I have only had one problem and it was caused by a voided policy. My experience with BCBS NM and the EFT was excellent. 5 years and not one complaint.
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Steph
My job is so secret I don't even know what I'm doing!
I find the vast majority of my clients prefer either credit card or EFT so they don't have to think about it. One less bill to deal with for them.
I know there are some people who simply don't want to give access to either cc or eft, and that is their right. But they may have to pay a little extra for it and should be willing to accept that.
I know there are some people who simply don't want to give access to either cc or eft, and that is their right. But they may have to pay a little extra for it and should be willing to accept that.
Why is it that these days everything that is good for the company is 'free' but what is good for the consumer cost extra? People hate to be nickled and dimed, especially for things that used to be considered a cost of doing business. I used to love my bank, but in the past ten years that they have become fee-based, not so much anymore. (They say they make more off of fees than loans!) Same with the phone companies (land and cell).
I know why so many young people hate big business and why the anti-globalization movement is so strong. And I know why I'd rather deal with any small biz than any large one.
Who is by far the most "loved" insurance carrier in the country? USAA. Why? Because they treat their customers with respect and 'love' and not as sponges to wring money out of.
Al
(no, I don't have USAA... but wish I did/could)
Why is it that these days everything that is good for the company is 'free' but what is good for the consumer cost extra?
Not true... When it's good for the company they charge for it also! Think about the ATM fees. You can go to a different bank, use the ATM, and get billed by the other bank (I can accept this), AND you get billed by your bank. On the other hand, you can write a check (remember those) at the grocery store, and not get billed by either the grocery store or your bank.
Problem with this scenerio is it cost your bank less to process that ATM transaction (i.e., $0.0000001) than it did to process the check. BUT, they charge you anyway, since it's not only a convenience to them, but it's a convenience to you to have access to your cash.
It is a case of you'll pay it, or not. The bank doesn't care.
Service is declining in our society, due mainly as a bottom line tool of saving and increasing profits. Sooner or later you reach the point of declining returns, I think that is what we're seeing with companies the insist on ETF's or other automatic payment methods. While many find these type of transactions beneficial others find them intrusive. Fact is billing is a built in to price, the fact that they want to charge more for billing isn't about recovering cost but increasing profits.
I have had clients using EFT for many years. Never had a complaint. In one instance there was a mixup because of a change of banks by the client and a failure to notify the insurance company. It was quickly resolved to the satisfaction of all parties.
Is this good business or anti-consumer?
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