Is Anthem Blue Cross Automatic Payment Cancellation a Scam?

Note: This post has been generously contributed by a forum member. He emailed me his concerns about this issue and asked if he could write a blogpost about it, which you will find below.

A few days ago I received a notice in the mail from Jimmy Lee, Vice President and General Manager at Anthem Blue Cross of California.  The letter stated the following:

Your payment options and billing period are changing

  • If you pay your premium automatically every month by credit card, this will end on August 1, 2011.   We reviewed our processes and decided to eliminate this payment method.   You can make single monthly payments with your credit card by calling customer service.   A $15 convenience fee will apply each time you use this option.

Monthly billing schedule

  • As part of our process review, we have also decided to only offer monthly billing.   Most members prefer this, but if you’ve used bi-monthly or quarterly bills in the past, this will be a change for you.

I called Anthem’s customer service number and asked why they were doing this and the representative stated the following:

“Because of the fees associated (with credit cards) and the constantly changing credit cards numbers and expiration dates, whereas checking account numbers do not change as frequently.”

I then told the representative that I was concerned because I relied on my credit cards to cover my insurance payments during periods where I did not have the cash to immediately pay them.  You see, I typically receive only two or three bulk payments a year as my sole source of income.  I think a lot of people are in the same boat as I am on this issue.

After the representative seemed dumbfounded by this explanation, I went further and brought of a major bone of contention.  Approximately 1 year ago, when I acquired coverage, I was required to complete and sign an application titled:

“Anthem Blue Cross Individual Coverage Credit Card Premium Payment Authorization Applicant Information.”

The application stated the following:

I request and authorize Anthem Blue Cross to charge my card for premiums in the manner and frequency indicated above. I understand that the amount may vary as a result of changes I make, such as, but not limited to, adding and deleting dependents, or moving to a new location. The amount may also change as outlined in my policy. This authority is to remain in effect until revoked by me by providing a 30-day written notice. I agree that if any card payment be dis-honored, whether with or without cause and whether intentionally or inadvertently, Anthem Blue Cross is not to be liable, including any fees imposed by my bank, should my card be rejected even though such dishonor may results in forfeiture of coverage.

With this signed application in place, and with the specific verbiage indicated, doesn’t this guarantee me the right to continue with paying via credit?  How is this even legal? Coincidentally, David Lazarus with the LA Times just posted an article further elaborating about this:,1,851818.column

Followup thoughts by CreditCardGuru: Anthem Blue Cross of California is one of the must disgusting, unethical companies based on my personal experience. They listed acne from when I was a kid as a reason to deny me coverage.

I’m sure there are devious reasons as to why they canceled automatic credit card payments. In addition to profiting from an excessive monthly fee, I would speculate their motivations are due to one or more of the following reasons:

  • Are there any fees involved if you do not pay on time? How long after the payment due date can they revoke coverage? I wonder if the elimination of automatic card payments is a strategy to punish late payments and/or weed out customers they don’t want?
  • If you read the article by David Lazarus in the LA Times (linked above) you will read about how their new system will result in $24 per year ($2 per month) in new fees for paper statements, even if you pay by check. This is nothing but greed.
  • According to “In an annual report, the California Medical Association found Blue Cross spends 78.9 cents per premium dollar on health care. Meanwhile, their profits are about twice as much (or more) than any other large health plan.” I guess that isn’t good enough and maybe they are looking to boost profits even further by shaving card payments out of the equation?

Written June 2011

The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

I travel a lot and don’t open mail at time for months. So I have all my bills on a credit card. No problem, ever.

Anthem of Colorado was paid on a credit card for 7 years. No hitch. With a 30 day notice in the mail they cancelled the auto-payments. 30 days later they cancelled my policy. I didn’t find out for another couple months. I spent over $16,000. on premiums over the years. They didn’t call my phone or make sure I have the info and they cancel my policy.

This must have happened to others. Last year I made a claim. I paid out of pocket for $5000 knee surgery. They covered nothing. Okay. But I believe they have calculated it’s better to drop me that continue to cover me and this is one simple way to attempt that. With me it worked because I travel so much.

It’s criminal. It’s mafia. It’s uncivilized. They are predatory.

I travel, too. But more to the point is that I don’t open all the mail I get from places like Blue Cross. It drives me crazy and there’s nothing I can do about them so I just feel impotent and frustrated. I, too, auto pay my bills with my credit cards. I can easily see where my money’s gone and what’s been taken care of without worrying about bouncing checks.
ZOOOM-no more cedit card payments and no more rewards or cash back. After I switched I was moving along, watch the rates go up and up with whatever amount of money disappearing from my checking account until the end of December. At the beginning of February I got a notice that said my insurance would be canceled if I didn’t pay up. This was 4 days after that date- I finally got around to reading the letter. Wait. What happened to the auto pay?
For a mere x amount of money in penalty fees I went online and paid for 2 months- THEY WOULD ONLY TAKE CREDIT CARDS!
I’m now reapplying for auto withdrawal through my checking account. I hope it works-I’m going out of town for 6 weeks. I hope the account gets set up.
I hope I never get sick.

stefanie novinski

I have my 9 yr old daughter covered by Anthem Blue Cross through an individual plan. She is healthy and has been insured since June 2011 and I have been billed bi-monthly and paying by paper check, however the most recent bill came on the 23rd of Sept. for coverage that began on the 1rst of Sept. The bill itself was printed on the 15th and says due: IMMEDIATELY. They NEVER sent a prior notice of upcoming dues. Along with the bill they also sent a brochure about online bill pay for automatic deduction from my bank account which doesn’t sit well with me so I’m not going to be setting that up. What I might be dealing with now is being told to either set up the autopay by forking over my banking info (won’t be doing) or face a penalty by possible rate increase due to their delayed billing, and if so I need to drop Anthem because this billing tactic is something I can’t afford. I went online to research consumer complaints about Anthem and there’s alot of scary stuff out there about this company. Alot of complaints cited obstructed attempts to cancel policies, along with the billing issues. None so far though, have been about the belated billing though so watch for it incase this is a new penalty scheme. If this recent billing issue comes off as a scam to me, I will be putting in complaints to the state’s insurance board and encourage you to do the same if it should happen to you as well.