Usually, when a business changes its policy regarding credit cards these days, it means it is embracing them after recognizing that many customers can’t be bothered to carry enough cash or change around to buy a coffee.
But Blue Cross Blue Shield of Illinois is going in the other direction. The insurer announced this week that it will no longer allow customers to pay their premiums via credit card, citing the toll of credit card fees. Customers will still be able to pay by debit card, however.
"We're trying to identify any avenue we can to lower administrative expenses that don't impact quality of care," Blue Cross spokeswoman Jill Wolowitz told the Chicago Tribune.
It is the latest cost-cutting measure championed by an insurer that is struggling to break even in the Patient Protection and Affordable Care Act insurance exchanges.
Other insurers have already taken or suggested that they will take far more dramatic action.
UnitedHealthCare, the largest insurance company in the country, has announced it will no longer be offering PPACA plans in many states next year, and it might pull out of the Obamacare market entirely. Other insurers have hinted that they may be forced to act similarly if the money doesn’t start coming in faster from PPACA business.
While the individual plans sold on the PPACA marketplace represent but a fraction of the business of the nation’s largest insurers, UHC said that they cannot justify continuing in the marketplace if the activity isn’t profitable.
The Obama administration has sought to assuage insurer concerns by levying heavier fines on those who don’t buy insurance –– in an attempt to coax young people into the market –– and by imposing stricter rules on who can sign up for marketplace plans outside of the open enrollment period, after insurers complained that people were abusing loopholes to sign up for plans only when they were sick.
But most analysts still expect insurers will unveil substantial premium hikes for 2017, which some worry could threaten the economic and political viability of the PPACA.
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