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ObamaCare Clusterfuck: The "unbanked" are 27% of those eligible for ObamaCare, and may be denied coverage because they have no way to pay that insurance companies will accept

(I should start by saying that this is a report from Jackson-Hewitt, and it couldn't have been more clear to me from my H&R Block experience this year that the tax preparers want a piece of the action from ObamaCare's stream of rents. I mean, here's the screaming headline on their corporate site: "April 15 is Now the Most Important Day in Healthcare.") That said, this report seems to make some good points. From the executive summary:

• More than one in four uninsured Americans eligible for the new premium assistance tax credits under the ACA does not have a checking account. Among the uninsured, non-elderly population with household incomes in the tax credit eligible range, 27 percent are effectively “unbanked.”

• Many insurance companies plan to require customers to pay premiums automatically through a checking account. While such restrictions may help insurers reduce administrative costs, unbanked customers will not be able to pay their required share of insurance premiums. Though contrary to the spirit and intent of the ACA, such restrictions are permissible under current federal guidance absent a policy clarification

• These restrictions will undermine efforts to expand health coverage under the ACA. Requiring enrollees to pay their premiums using a checking account would effectively deny coverage to the more than eight million unbanked Americans who are otherwise eligible for the new tax credits under the ACA. Unless addressed, such restrictions may hollow out the ACA’s expansion of coverage.

• The impact will be especially large among African Americans and Hispanic Americans, who are over 40 percent more likely to be unbanked relative to white residents in the same income category. This is particularly concerning given the existing disparities in access to health coverage and health status for minority groups. Further, as many as five million veterans and other Americans who receive federal benefits on prepaid debit cards may not be able use those same cards to pay their premiums for federally- subsidized insurance.

• The impact on the unbanked will be disproportionately large in states where the federal government operates a health insurance marketplace. Federal marketplaces will operate in 11 of the 12 states with the highest proportion of unbanked among those eligible for tax credits.

Hilariously, the administration is especially targeting Hispanics in the rollout. Jackson-Hewitt does have a solution:

Fortunately, federal policy makers have an easy solution to fix this problem before 2014, but they must act now. The federal government could require insurance companies to accept commonly used forms of payment available to unbanked Americans, such as prepaid debit cards. However, federal officials must clarify this policy soon to ensure that the ACA coverage programs do not exclude one in four eligible Americans.

So, something to watch for!

Honestly, who the heck designed this thing? It's like ObamaCare was written by some health insurance executive and then implemented by a bunch of creative class technocrats, neither of whom have any understanding (if indeed they care to have understanding) of people's lives. Oh, wait....

NOTE Via StateForums.

UPDATE Of course, with single payer, none of this would happen. Once again, ObamaCare's system architecture coughs up another hairball.

UPDATE Kaiser has more, including this gem:

Indeed, neither the Affordable Care Act, nor any other federal health laws, require health insurers to accept all forms of payment, including credit cards or the cash-loaded, pre-paid debit cards that people without bank accounts often rely on. Federal officials are wary of doing anything to discourage insurance companies from selling plans on the exchanges, say current and former state health officers who have pressed the U.S. Department of Health and Human Services for a ruling.

One of the largest players on the new exchanges is likely to be WellPoint, a Blue Cross and Blue Shield licensee. In an email, a WellPoint spokesperson said the company was “evaluating expanded payment options to members.” Other health plans, including Cigna and UnitedHealthCare, urged state officials in planning documents to allow companies to set their own payment policies.

Federal health officials issued a letter in April stating that all health plans selling coverage in the federally-run insurance marketplaces in 28 states will have to accept payments in ways that do not discriminate against their customers, but did not prescribe what those payments should be.

Insurance carriers are in a pickle since the transaction fees for credit cards and pre-paid debit cards can run as high as 4 percent [Something else that wouldn't happen with single payer]. If only one company takes the plunge, its costs are likely to be higher, scaring away customers.

Pre-paid cards, popular with low-wage workers, come with other potential hazards. “If you accept re-loadable debit cards, are you in fact getting folks with lower health status?” said Haile. “That’s a real risk when you’re in the insurance business. So you can’t be the only one picking up those risks.”

ObamaCare was drafted by Liz Fowler, a Wellpoint VP on secondment to Max Baucus as his Chief of Staff. So the powers that be have known about this problem since 2010 at the latest. And they're only now getting around to addressing it?!

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beowulf's picture
Submitted by beowulf on

Federal officials are wary of doing anything to discourage insurance companies from selling plans on the exchanges, say current and former state health officers who have pressed the U.S. Department of Health and Human Services for a ruling.

Sometimes I wonder if Lambert randomly adds lines like this t o the text just to piss everyone off.

Submitted by jawbone on

cards, indeed demanding that their customers pay deductibles via these cards for certain plans. This was several years ago in Wisconsin. I figured they wanted to be able to make sure their customers couldn't get these costs easily discharged under bankruptcy laws.

It also meant they got their deductibles and co-pays faster, but left the customer facing rather high interest rates.

Since the legislation was seen to fruition by former health insurance company officials, and such like, I imagine they did whatever they could to lessen exposure to the "poors," as Atrios is wont to say.

Submitted by cg.eye on

Use what government we have, to avoid rents.

The only people who should handle the cash for a government program should be the government. It's also big enough to negotiate for lower, not higher, transaction costs.

Authorize through executive order the ability of the Post Office to accept ObamaCare payments, either through cash/card payments which clerks' terminals already accept, or through USPS' online portal that also accepts payments. Just expand both to accept ObamaCare premiums, and use SSNs for matching heads of households with plans..If the USPS even sticks to the same fee structure as with its money orders, it should still make out fine due to the increased use of its services.

Submitted by lambert on

And there is already a physical infrastructure.