Clients of Blue Cross to get billed for bills

President Bush makes remarks on health care, Wednesday, June 27, 2007, in the Roosevelt Room of the White House in Washington. (AP Photo/Gerald Herbert) President Bush makes remarks on health care, Wednesday, June 27, 2007, in the Roosevelt Room of the White House in Washington. (AP Photo/Gerald Herbert) Photo: Gerald Herbert Photo: Gerald Herbert Image 1 of / 1 Caption Close Clients of Blue Cross to get billed for bills 1 / 1 Back to Gallery

As if the U.S. health care system wasn't bad enough, now comes word that Blue Cross, California's largest health insurer, will charge hundreds of thousands of people a $2 "service fee" just to receive their bills in the mail.

That's right -- a bill for them to bill you.

"Business costs don't stay stagnant," explained Nick Garcia, a spokesman for Blue Cross of California. "There have been increases in postage and paper costs."

Blue Cross' paper-billing fee affects the 820,000 California members who receive coverage directly from the insurer in the form of individual policies. At this point, it won't apply to the roughly 7.5 million others who are insured by Blue Cross through an employer or some other organization.

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Garcia said the fee, to be introduced in September, is already prompting many members to turn instead to electronic billing and payments. This, he said, is a plus for Blue Cross customers.

"When you're in the individual market and paying month to month, there might be fears of a lapse in coverage if you don't pay your bill on time," Garcia said. "This will alleviate those fears."

Blue Cross isn't the only insurer charging customers a fee to receive their bills in the mail. Health Net bills its 100,000 California members with individual policies $5 a month for paper bills.

"This is to promote the efficiency of electronic payment methods," said Brad Kieffer, a Health Net spokesman.

Similarly, phone company MCI, now owned by Verizon, charges a 99-cent monthly fee for paper bills. Internet service provider EarthLink charges $1.

Yet it seems different when a health insurer does this. If a telecom company hits people up for paper billing, at least it's coming from a presumption that the customer has or can receive Internet access and thus is open to electronic billing.

An insurer can make no such presumption -- its customers can be anyone. Moreover, an insurer's billing statements are often the sole evidence of a person's interaction with the health care system and thus comprise a crucial aspect of individual record keeping.

Garcia responded that the health care industry is moving toward digital medical records, and it's thus unsurprising that an insurance company would want to communicate with customers electronically.

"We think this is the direction that the industry is heading in," he said.

Some consumers might see the switch away from paper billing as being more convenient for insurers than for those they cover. It's not as though most major insurance providers are hurting for cash.

Garcia said Blue Cross of California doesn't disclose profit on a statewide basis. But its parent company, WellPoint Health Networks, the nation's largest health insurer, reported profit of $783.1 million during just the first three months of the year, up 16 percent from a year before.

Health Net's Kieffer said about a third of individual policyholders pay the $5 monthly fee for paper bills.

If a third of the 820,000 Californians with individual Blue Cross policies chooses to continue receiving paper bills, the company is looking at an additional $547,000 in monthly revenue, or about $6.5 million a year.

Garcia said Blue Cross is expecting the percentage of members opting for electronic payments to reach as high as 85 percent in coming months.

However, this would still leave about 123,000 Californians stuck with the new fee, resulting in almost $250,000 in monthly revenue for the company, or about $3 million a year.

Rather than padding Blue Cross' pockets, though, Garcia said the insurer sees the $2 paper-billing fee as a way to save people cash.

"We can save members a lot of money this way so that higher costs aren't passed on to them as premium increases," he said.

There. Doesn't that make you feel better?

Wrong path?: Speaking of health care, it was striking that President Bush had harsh words last week for a plan by Democrats to provide health coverage to more kids by expanding a popular children's insurance program, known in California as Healthy Families.

The nationwide program covers more than 6 million kids, primarily in low-income families. Congress will soon vote on reauthorizing the 10-year-old system, with Democrats seeking to expand its scope so that a greater number of youths are covered.

Bush called this an attempt "to take incremental steps down the path to government-run health care for every American." He said this would be "the wrong path for our nation."

At the same time, Bush warned that "America's health care is too costly, is too confusing, it leaves too many people uninsured." He said the system "is in need of serious reform."

Up to a point, that is.

Programming note: This column will be AWOL for the remainder of the week, watching fireworks, eating hot dogs and thinking deep thoughts about the Bill of Rights. Back in action July 9.