One Man's Struggle With BCBS
Story from ZDNet.com,
by Paul Greenberg

My wife and I get our health insurance from Anthem Blue Cross & Blue Shield, here in Virginia. Because my wife is a cancer survivor our insurance rates are exorbitant. Last year, we had a $500.00 deductible (each) and were paying more than $1600 a month for coverage that at best was going to get us 80% when the deductible was covered.

Toward the end of last year we made a decision to increase our deductible to $2500.00 which would not only get us 100% coverage when the deductible was done but would lower our rate to around $1279.00.

Quite the bargain (he said entirely sarcastically). But the increase in the deductible was offset by the reduction in the monthly payment so that we were swapping more upfront costs and maybe a couple of hundred dollars more for 100% coverage. Worth it to us. This began January 1, 2009.

However, little did we know what was in store. We got a notice yesterday that said our monthly rates were going up to $1576.00 as of May 1, 2009 - an increase of nearly $300.00 per month. A convenient fact, they forgot to tell us when we were changing our deductible for this year.

To add insult to financial injury this paragraph was in the letter accompanying this rate increase.

“We work hard to keep your costs down

“As health care costs continue to rise, we work hard to find ways to save on the health care services you need. For example, as the largest health insurer in Virginia, we have used our negotiating power to keep local provider and national pharmacy costs as low as possible. But even with cost-cutting initiatives like these, we’re finding it necessary to increase premiums for all members enrolled in your type of plan.”

Their idea of saving us money is to increase our premium by $3500 a year? Their cynicism is breathtaking.

The Nature of the Health Insurance Beast

One would think that with the outcry over the high costs of health insurance, the general health insurance bashing that’s going on, the bad perception as cold and uncaring that they have and the discussion of universal health care, their concerns about actual living, breathing (that of course presumes they had been able to afford health insurance when they got sick) beings - sentient creatures called, drumroll please,…………customers would be paramount.

They are not concerned. Their customers aren’t even a subject of discussion.

This came abundantly clear when I called the customer service line for Anthem and spoke to a very nice representative who was clearly hamstrung by two things a. the company b. regulation. I was absolutely astounded, not just by the magnitude of the increase (around 23 percent) but by what I was told. This was a “policy wide” increase. In other words, my actual health didn’t matter, my wife’s didn’t matter, nor did our track record in any way matter. This premium was raised whether you were a category 4 (high risk) or category 3, 2, and 1 (low risk).

This was raised regardless of any individual whatever. It was a raise whether you paid $1279 per month or $450 per month. You were raised that same nearly $300.00. Why, because it was “against the law” to treat individuals as individuals, when it came to pricing policies for specific insurance programs.

So this increase was based on the performance of the policy itself - not the customers using the policy. You can imagine that, in effect, my human health concerns are reduced to the level of an actuarial table, an algorithm or two and a policy. There is NOTHING human about that. There is NO customer differentiation - actually not even recognition by Anthem that their customers are something more than a name on a policy.

Is there a law preventing this differentiation? My customer rep told me that they have been told there is.

I checked as best as I can and I couldn’t find anything that substantiated that either nationally or in Virginia. That said, that doesn’t mean it doesn’t exist. It could.

But can insurance companies treat their customers individually if they’re blocked by law? They can’t right?

Wrong.

In the 3rd edition of CRM at the Speed of Light I covered another Blue Cross Blue Shield (this would be back in 2004). That was Blue Cross of California and their My LifePlan program which was a customer friendly program that provided a large set of online tools to help you find what you needed without much bureaucracy - be it a specialist, pharmacy or a wellness program.

More germane was this:

“It is in the interest of the insurance company to see that a diabetic customer has regular checkups for blood sugar. Consequently, by institutionalizing CRM processes, the alert will show on an agent’s or other appropriate CSR’s screen that diabetic customer A should take advantage of a free test being given in his area over the next month. Aside from any humanitarian concerns that the insurance may (or may not) have, keeping that diabetic customer healthy is in the insurance company’s interest, simply because if the diabetic is healthy, no one collects and premiums are paid for a longer time. The insurance vendors can also track whether the diabetic took advantage of the free blood sugar test. The response can create the need to adjust the level of risk associated with the diabetic. This is a step better than even the thought-leadership that CRM-driven insurers can provide and is a major step to reducing risk without the cold-blooded approach characterized by State Farm.”

As of 2009, you can substitute Anthem for State Farm. No wait. Add “and Anthem.”

This approach would be aimed at preventing recurrences which benefits the insurance company that doesn’t have to pay out the dollars. Second it would make a policyholder feel like the insurance company gave a crap beyond the money we’re feeding them each month so that we don’t have a catastrophe that we can’t afford to pay for. In other words, this would be a way to treat a customer like an individual that mattered to the company.

Has Anthem ever sent us a notification of something related to preventing a recurrence of my wife’s cancer - either through an email or a direct mail piece?

Noooooo.

All we ever have gotten in the nearly a year we’ve been with them is notices of bills and notices of things that might become bills. And the monthly invoice. And now the notification of the premium increase. I mean this literally. Not metaphorically.

Sure, look, I get the fact that they are a business but if the customer in the highly sensitive area of health is nothing more than an actuarial table and a policy performance tied by an algorithm, then their business doesn’t deserve to survive, much less prosper.

Whether you believe in universal health care or not (I do), I would presume you would see that this is not just an inhumane approach, it is a cold blooded model implemented by heartless creatures who have no concern for their actual policyholders. They are concerned that a. you pay and b. you don’t use the insurance ever.

My wife and I are stuck with this company for awhile. Because of her past condition, it isn’t that easy to guarantee coverage, so the cost of moving is perilous for us. But from a CRM lesson learned here, it should be clear that not only is this a company that should never have its practices emulated, even with nice CSRs, but it should be seen as a model of what not to do when your customers are more engaged and more concerned than ever.