Blumenthal Presses Anthem of Connecticut to Reject “Pay-to-Pay”

(Washington, DC) – Senator Richard Blumenthal (D-CT) today sent a letter to David Fusco, President of Anthem Blue Cross and Blue Shield of Connecticut, urging the company to disavow the “pay-to-pay” policy that Anthem has recently proposed in California. The proposed policy change would eliminate the option of automatic or online credit or debit payments, requiring consumers who wish to pay by credit or debit card to pay by phone, and incur a $15 charge each month for doing so. In the letter, Blumenthal noted that Connecticut law prohibits surcharges on buyers who use any method of payment, including a credit or debit card.

“Automated payment systems are beneficial to consumer and company alike. Consumers are able to set up payments and not worry about paying their bills on time each month,” Blumenthal writes in the letter. “Companies are able to save on costs by reducing mailings and paper bill processing, and are able to lock customer payments into a routine, predictable system. A company that charges for common payment methods, or eliminates them entirely, increases the difficulty for customers in paying their bills.”

The full text of the letter is below.

June 27, 2011

David R. Fusco
President
Anthem Blue Cross and Blue Shield of Connecticut
370 Bassett Road
North Haven, CT 06473

Dear Mr. Fusco:

I write regarding Anthem’s decision to charge a fee to its California customers who pay their premiums by credit or debit card. I strongly oppose this anti-consumer practice and urge Anthem Blue Cross and Blue Shield of Connecticut to explicitly disavow any intention to adopt this restrictive “pay to pay” policy.

            According to a letter sent by Anthem Blue Cross of California to its policy holders, Anthem will be eliminating its automatic payment system for credit or debit card users, forcing customers to call a customer service number each month to make a credit or debit card payment. Although this is clearly less convenient for consumers, Anthem will assess a $15 “convenience fee” for customers who pay by phone. At the same time, Anthem will eliminate less-frequent billing options, like bi-monthly or quarterly billing, in favor of monthly billing. Taken together, this means that a consumer who wishes to pay by credit or debit card must pay an additional $180 per year.

            The practice of “pay to pay” is not unique to Anthem. Some utility, cable, and internet providers also charge a fee for customers who wish to pay with credit or debit cards. However, I am unaware of any company employing such a burdensome and costly system.  Additionally, any cost savings that Anthem could achieve by limiting the use of credit or debit cards appear to be negated by Anthem’s decision to require more frequent payments; in order to save on card processing fees, Anthem could have required credit or debit card users to pay less frequently, such as bi-monthly or quarterly. Instead, Anthem has eliminated these billing options.

            I also urge Anthem of Connecticut to disavow any plan to charge customers who pay their premiums by credit or debit card because such fees would violate Connecticut law, which prohibits imposition of a surcharge on a buyer who uses any method of payment, including credit or debit card. A comparable law exists in California, and I understand that California’s attorney general has raised similar concerns.

            Automated payment systems are beneficial to consumer and company alike. Consumers are able to set up payments and not worry about paying their bills on time each month. Companies are able to save on costs by reducing mailings and paper bill processing, and are able to lock customer payments into a routine, predictable system. A company that charges for common payment methods, or eliminates them entirely, increases the difficulty for customers in paying their bills.

            I hope you will join me in supporting a national ban on such unnecessary and unwise changes in legislation that I will introduce. Thank you in advance for your cooperation.

Sincerely,                               


Richard Blumenthal
United States Senate

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