Citing fees, Humana and some Blue Shield units have dropped the pay-by-credit-card option
Your heart may skip a beat if you find out you can no longer use your credit card to pay your health insurance premiums.
Two major insurers – Humana and five Blue Cross Blue Shields units – have stopped accepting card payments for individual health insurance policies, citing high credit card transaction fees.
Humana’s new no-credit rules
At Humana, consumers who purchase policies outside of their state health exchange must pay using: online payments from a checking or savings account; check, money order or cashier’s check; or cash, brought to CVS or Dollar General. No credit cards.
“Credit card companies charge transaction fees of around 2.5 percent of the total amount charged. These fees raise administrative costs,” says Humana spokesman Mitch Lubitz.
The insurer no longer accepts credit or debit card payments from nearly 210,000 consumers who purchase individual policies outside the health insurance exchanges.
Lubitz says the move will help “preserve affordable individual major medical plans.”
Blue Cross units
Meanwhile, Blue Cross Blue Shield of Texas, Illinois, Montana, New Mexico and Oklahoma no longer accept credit cards to pay for premiums for any individual health or dental plans, regardless of whether they were purchased on or off a health insurance exchange, says spokesman Mark Spencer. The company will continue to accept debit card payments.
The five Blue Cross Blue Shields involved are all subsidiaries of Health Care Service Corp., the largest customer-owned health insurance company in the country. “Credit card fees are a significant expense that impact all members, not just those who use credit as a payment option,” Spencer says.
While Spencer declined to say how many individual members the company has, The Chicago Tribune reported it had more than 1.6 million individual members at the end of 2015.
Spencer said about 30 to 35 percent of the company’s individual policyholders use credit cards to pay their premiums.
The Affordable Care Act (ACA) mandated that most consumers have health insurance by 2014 and established state health insurance marketplaces, where consumers could shop for insurance. Those earning up to 400 percent of the federal poverty level are eligible for a subsidy. That means a family of four can earn up to $97,200 in 2016 and still be eligible for a subsidy.
If you fail to pay your health insurance premiums, you could lose your insurance and you wouldn’t be able to purchase new insurance until the next open enrollment period begins on Nov. 1.
For 2016, about 12.7 million people had purchased a policy on a state exchange, according to the nonprofit Kaiser Family Foundation. Various estimates say about 8 million people have purchased policies outside of the exchange.
Often, health insurance premiums aren’t cheap. For individual policyholders who didn’t receive a subsidy in 2015, premiums averaged $286 a month, while premiums for family policies averaged a hefty $727 per month, according to eHealth Inc., which operates a website to help consumers shop for health insurance.
“Budgeting for health care costs and medical costs can be tricky,” says Rachelle Brill, a policy analyst with Community Catalyst, a nonprofit that works to ensure all consumers have access to high-quality health care.
“At the end of the day it should be up to consumers” to decide how they want to pay their premiums, Brill says.
Federal regulations require insurance companies to accept prepaid debit cards for policies purchased on the state health exchanges.
Customers of the five Blue Cross Blue Shield plans that no longer accept credit cards still are able to pay their premiums using debit cards, check, money order, automatic bank drafts from checking or savings accounts, or with cash, Spencer says.At Humana, the company will continue to accept credit cards and debit cards for the more than 550,000 policies purchased on health insurance exchanges, Lubitz says.
“Humana has retained credit and debit cards as payment options for exchange members to help these members make monthly premium payments and maintain coverage. In addition, federal subsidies also generally reduce members’ overall premium payments, lessening the impact of credit card company transaction fees,” Lubitz says.
See related: 10 things you can’t (easily) buy with credit cards