People Without Bank Accounts can be Health Reform Victims

by Vanessa Jones on May 27 2013 10:30 AM

 People Without Bank Accounts can be Health Reform Victims
According to a new study insurers may stop accepting payments through credit or debit cards, which will leave those without bank accounts in a fix.
Health Insurance companies are in a frenzy preparing for The Affordable Care Act – starting next year, as they will need to cut costs. Insurers will now need to allocate part of the premiums to care instead of overhead costs such as profits and marketing. A portion of this overhead cost pays for debit and credit card transaction fees, so many of them do not accept payments on cards.

BlueCross Blue Shield of Tennessee and HealthNet no longer accept premium payments made via cards.

More and more insurance companies are scrapping debit and credit card payment options, says Ryan McCostlin, team member at Nashville-based health care consulting firm Bernard Health: "Since I've been thinking about how to help individuals and families figure out what to do about health insurance, more than half the carriers, while they may allow you to pay the first month's premium with a debit or credit card, quite often, the only options after that are to get direct-billed with a paper statement or to set up an electronic funds transfer (EFT)."

This becomes an issue as a considerable number of Americans don’t have bank accounts and will not have means to pay premiums. A 2011 study conducted by the Federal Deposit Insurance Corporation showed that one in every 12 American families did not have bank accounts. The Jackson Hewitt report focuses those numbers further: "Among the uninsured, non-elderly population with household incomes in the tax credit eligible range, 27% are effectively 'unbanked,'" it says.

"Since we're still working through the regulations, it is too early to know what payment methods will be required for products purchased on the new Health Insurance Marketplace," says Mary Danielson, a spokesperson for Blue Cross Blue Shield in Tennessee.

This issue will need to be addressed before October 2013, as majority of these people are those with no health insurance.


Hannah Punitha (IRDA Licence Number: 2710062)

Shelley DuBois, May 2013