From John Curry, March 17, 2014
You might want to read the fine print!
John
In 2011 Aetna began offering the Flu Care card to large self-insured
employers and groups. Meadows got one because he has a Medicare Advantage plan
as a member of the State Teachers Retirement System of Ohio.
The perk to the card, says Aetna, is that it serves as a reminder to
get the flu vaccine and helps expedite the paperwork process for the
consumer."
As with most consumer financial products, the cards' terms are "take it
or leave it" propositions that can't be negotiated, said Cordray, a former Ohio
attorney general.
"They encourage you to use the card with this easy-to-understand
language and marketing material, and in the same envelope include a confusing
legal agreement that I don't think most people in their elderly years would
understand enough to know what they're giving up," said Meadows. "That seems
like a shame to me.
Warning: These prepaid cards come with strings
attached
March 14, 2014
The bright blue plastic card promised to make getting a flu shot easier for
Bruce Meadows by letting him go to any nearby pharmacy.
But "why would I need a new card to get a flu shot when Medicare already
covers (the vaccine), and I already have a Medicare card?" the 82-year-old Mason
resident wondered.
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| The flu shot card Aetna sent to Bruce Meadows of Mason was actually a prepaid card from Citi. (Photo: The Enquirer/Joseph Fuqua II ) |
While the card was sent from Aetna, Meadows' Medicare Advantage insurer, it
actually was a prepaid card from Citi that works much like a credit or debit
card. Cashing it in to get a flu shot meant Meadows could avoid paperwork
hassles to get reimbursed by his insurer, but at the expense of giving up a slew
of legal rights – including his right to a jury trial, class action lawsuit or
appeal process – against the global financial giant.
From flu shots to health savings accounts to checking accounts and more,
consumers are increasingly being forced to weigh their legal rights against the
benefits of easy-to-use credit or debit cards – prepaid or otherwise.
The cards, like a growing list of other business contracts, include a
provision that requires users to solve nearly all disputes out of court through
arbitration.
"If you were to look in your wallet right now, the chances are high that
one or more of your credit cards, debit cards or prepaid cards would be subject
to a pre-dispute arbitration clause," said Richard Cordray, director of the U.S.
Consumer Financial Protection Bureau during December testimony to Congress.
The bureau is studying the impact that arbitration provisions are having on
consumers.
Supporters of the clauses say arbitration can be a more convenient, faster
and cheaper way to settle disputes without the hassle of the courts.
But opponents say the clauses rob consumers of their legal rights and are
often packed with undecipherable legalese only intended to insulate businesses
from potentially costly litigation.
As with most consumer financial products, the cards' terms are "take it or
leave it" propositions that can't be negotiated, said Cordray, a former Ohio
attorney general.
"They encourage you to use the card with this easy-to-understand language
and marketing material, and in the same envelope include a confusing legal
agreement that I don't think most people in their elderly years would understand
enough to know what they're giving up," said Meadows. "That seems like a shame
to me."
A February report
published by Pew Charitable Trusts shows a growing number of checking
accounts and prepaid cards include binding arbitration agreements "that are
confusing to most consumers, even if carefully read."
The provisions are so prevalent in card contracts, according to the report,
that they prevent consumers from shopping around to try to avoid the terms. The
contracts even apply to programs like private health insurance plans – and with
nearly 20 percent of all employer-covered workers enrolled in high-deductible
health insurance plans last year, a growing number of consumers are likely to
find arbitration language attached to their health savings accounts.
"I think the public, generally, has no damn idea that they're getting
hoodwinked into giving away the constitutional rights that our forefathers died
for," said John Metz, a Hyde Park-based medical malpractice lawyer. "But more
and more corporations are doing this – and the courts have said it's OK."
US Supreme Court upholds arbitration clauseAmong the most notable cases
upholding arbitration provisions is a 2011 U.S. Supreme Court ruling that allows
companies to block class-action lawsuits by forcing each complaint into
arbitration.
The decisionwas the result of a lawsuit filed against AT&T by a
California resident who was charged taxes on the full retail price of a
cellphone he bought at a discount. When the buyer pursued class-action status,
AT&T pointed to an arbitration clause in its cellphone contract.
"The courts have basically said they will not interfere with contracts,
because they are so important to business, so more corporations are putting this
in, and are essentially free of the justice system," said Metz.
For its part, Citi says the language used in the pamphlet included with
Meadows' Flu Care card is typical for all recipients of the card.
 |
| “I don’t think most people in their elderly years would understand enough to
know what they’re giving up,” Meadows says.(Photo: The Enquirer/Joseph Fuqua II) |
"The arbitration agreement is included as standard with all Citi-issued
prepaid cards," the company said in an email. "We continuously review and update
our policies to ensure they are appropriately designed and compliant with all
applicable regulations."
The company added that, "in general, cardholders have not expressed concern
regarding this provision."
In 2011 Aetna began offering the Flu Care card to large self-insured
employers and groups. Meadows got one because he has a Medicare Advantage plan
as a member of the State Teachers Retirement System of Ohio.
The perk to the card, says Aetna, is that it serves as a reminder to get
the flu vaccine and helps expedite the paperwork process for the consumer.
"For members who choose to get a flu shot at a pharmacy, this debit card
eliminates any hassle for the member. They show the card and Aetna gets the
claim for the flu shot," said Rohan Hutchings, a spokesman for Aetna. "It is a
one-time-use card so the member doesn't have to pay money out of their wallet
and then go through the process of submitting a claim for the 100 percent
covered shot."
The other option, Hutchings said, is for the member to pay the pharmacy
upfront for the shot, then submit a claim to Aetna for reimbursement. At a
doctor's office, the doctor would submit the claim for the flu shot to Aetna.
The arbitration agreement, Hutchings noted, does not include Aetna or the
participating pharmacies.
The flu card "is a popular program that saw a 33 percent increase in usage
by Medicare Advantage members last year," Hutchings said.
The Flu Care card sent to Meadows and thousands of others across the state
last year expired Feb. 15, but Aetna said it plans to continue the program for
the next flu season because of its popularity.
You have a choice: Agree to their terms or don't use card
Tom Bedall, a managing attorney at the Roselawn-based nonprofit Pro Seniors
Inc., said he sees "no nefarious purpose" in the arbitration clause attached to
the Flu Care card.
"Consumer arbitration agreements have been found legal, within certain
parameters, by the Ohio Supreme Court and are in use in many different consumer
agreements," Bedall said, adding that even nursing homes are increasingly using
the clauses in their admission contracts for seniors.
"There is a choice to agree or not to agree," said Bedall.
But whether consumers understand enough about arbitration clauses to know
what they're agreeing to is up for debate.
"Consumers may open a new account or take on a new product without being
aware of what the contract says or without fully understanding its
implications," Cordray said.
In a report published in December, the financial protection bureau found
that while tens of millions of consumers are subject to arbitration clauses, on
average, consumers filed just 300 disputes in the markets studied by the bureau
each year between 2010 and 2012.
The bureau is examining whether consumers are aware of the terms of
arbitration clauses and whether the clauses influence consumers' decisions about
which products to purchase.
For now, the bottom line for consumers remains "look past the shiny
marketing materials and always read the fine print," said Laurie Petrie of the
Council on Aging of Southwestern Ohio. "We tell seniors all the time, 'If it
sounds too good to be true, it usually is.' "
