Thousands of North Carolina customers of Blue Cross and Blue Shield can expect refunds and other insurance fixes this week as the Chapel Hill insurer works through what company officials are acknowledging as their most serious system failure in recent decades.
Blue Cross CEO Brad Wilson has been personally apologizing to customers during the week and promising the company will refund money wrongly drafted from customers’ bank accounts, along with any overdraft penalty fees customers incurred.
North Carolina’s largest health insurer has been dealing with the problem since last Monday, shortly after individual policies under the Affordable Care Act went into effect Jan. 1 and Blue Cross customers began panicking when they couldn’t confirm whether they were insured.
Wilson said Saturday that about 25,000 customers across the state were accidentally put into the wrong health plans, representing about 7 percent of all individual insurance customers.
Wilson also said Blue Cross took out automatic bank drafts from 3,200 customers for the wrong amount, in many cases withdrawing more than the customer owed. Most of the customers affected are insured under the Affordable Care Act, but others on individual policies were also swept up in the debacle.
Wilson said Blue Cross will need until the end of the end of this week to resolve the situation. .
“It’s our mistake, and we’re going to make it right and give people their money back that they deserve,” Wilson said. “We’re going to stay at this until our customer problems are solved.”
In an hourlong interview, Wilson and Alan Hughes, Blue Cross’ chief operating officer, explained the extent of the mistakes and the cascading consequences behind the fiasco. Wilson said that not even in the calamitous initial rollout of the Affordable Care Act, when the federal enrollment website was inoperative for about two months in 2013, did Blue Cross deal with such extensive problems as it faces now.
On Jan. 4, as ACA policies were going into effect for 2016, Blue Cross was staffed up to field about 30,000 customers calls. Instead, the company was slammed with 137,000 incoming calls when customers began suspecting problems.
All week long, Blue Cross customers have clogged the company’s customer service lines with complaints about having no insurance coverage, or not getting the plan they thought they selected, or apparently getting assigned to two plans and billed for both.
Denyse Brown, a Blue Cross customer in Apex, managed to reach Wilson by phone Friday afternoon and said she received personal assurance from the chief executive that she is covered by the company and will be refunded for overdrafts. Brown was double billed and charged for a policy she didn’t want.
She said that last year, she had a Blue Cross policy costing $730.33 a month, but because it was slated to go up to $910.94 a month in 2016, she switched to another policy costing $620.15.
Last week, she discovered that Blue Cross drafted her bank account for both policies.
Then her bank dunned her for $105 in overdraft fees.
“I guess you could say I’m insured twice,” said Brown, 52, a former construction company administrator who is now a caretaker for her elderly parents.
“Like most people, you only keep so much in your checking account,” she said. “A lot of us can’t afford to have this money taken out.”
Brown also said that since November, when she encountered problems switching policies, and more recently dealing with insurance mix-ups, she has spent more than 40 hours on the phone with Blue Cross representatives.
The debacle is the latest blot on North Carolina’s record with the ACA. The state initially was celebrated for attaining one of the nation’s highest enrollments, with the organizational acumen of highly motivated teams of navigators and other volunteers. But last year, Blue Cross blamed the ACA for a $50.6 million operating loss and was approved for a 32.5 percent rate increase, one of the highest in the country.
Blue Cross is seen as the state’s bellwether for health insurance, not only as the state’s largest insurer but also as the only insurer that sells ACA policies in all 100 counties in the state. By contrast, the nation’s largest health insurer, UnitedHealthcare, has stopped paying sales commissions to agents who sell ACA policies and has signaled it might get out of the ACA business altogether in 2017.
Craig Ashby of Holly Springs said his 63-year-old wife thought she canceled her Blue Cross policy last year. When he realized on Jan. 6 that his bank account was drafted for $915.53, he contacted his bank to try to recoup the money.
While hundreds of customers complained they had not received their insurance cards, Ashby’s wife received an insurance card for a policy she didn’t want, and Ashby said he promptly mailed it back. He is counting on his bank to get his money back.
“I wasn’t going to spend any more of my time trying to get them on the phone,” he said. “It was a complete exercise in futility.”
While taking full responsibility for the mishaps that have distressed Blue Cross customers, Wilson and Hughes said the problems resulted from a human error at the insurer’s claims processing and billing vendor, TriZetto, and were exacerbated by a last-minute processing delay by the Medicare system, which administers the ACA.
“This was an isolated incident – it was not a pervasive, systemic problem,” Wilson said.
Efforts to reach TriZetto weren’t successful Saturday or Sunday.
Blue Cross invested several hundred million dollars to switch to TriZetto’s Facets IT platform, migrating its ACA customers this fall as they re-enrolled or signed up for the first time. Blue Cross has been using the Facets system for 1 1/2 years for small-business insurance customers.
The ACA processing delay was a problem because Blue Cross typically needs at least three days to enter, validate and process ACA customers who sign up on healthcare.gov. Wilson said a number of ACA insurance applications coming over from the Medicare system require extra processing time because they contain errors or last-minute changes.
The two insurance executives surmised that similar problems have likely afflicted other insurers but on a less dramatic scale. With nearly 300,000 customers insured under the federal program, Blue Cross is one of the largest ACA insurers in the country.
“We have a big book of business,” Hughes said, “so we’re affected disproportionately.”
Are you insured?
Blue Cross and Blue Shield says the surest way of verifying the status of health insurance is online at https://www.bcbsnc.com/members/public.