Pending regulations designed to make Obamacare accessible for the unbanked

ObamacareIn a major victory for the estimated 25 percent of Americans that are unbanked, the Centers for Medicare and Medicaid Services are recommending that health care providers participating in Obamacare need to accept forms of payment that are easily accessed by those without bank accounts.

The move was confirmed by a Department of Health and Human Services official, who told Bankless Times that “CMS has issued guidance to issuers that they must accept payment in ways that are non-discriminatory.”

The statements were published in the Federal Register and the comment period closed on July 19. The final statements must be issued within a month.

“I would be shocked if they backtracked from this,” stated Claire McAndrew, the Senior Health Policy Analyst for Families USA, a non-profit health care advocacy group.

There was fear among many, including people with lower incomes and those from visible minority groups that they would be excluded or at the very least experience difficulty receiving the benefits of Obamacare.

Their fears were not without precedent. In 2010, the National Council of La Raza, the largest Hispanic rights organization in the U.S., was one of many groups concerned about the ability of their unbanked members to receive such benefits as unemployment insurance, child support, welfare payments and other government assistance.

The groups united to petition Congress in support of the Benefit Card Fairness Act, a proposal initiated by Michigan Congressman Sandy Levin.

These payments were increasingly paid by direct deposit, which hurt the unbanked because a common second option were prepaid cards, which often came with high fees.

The fees were often not visible to inexperienced recipients, who were prone to having their benefits eroded through the hidden fees along with unauthorized transfers and billing errors.

The Benefit Card Fairness Act failed to be enacted.

Thirty-two percent of Hispanic-Americans are effectively unbanked, according to a study conducted by tax firm Jackson Hewitt. The study also reported 33 percent of African-Americans are unbanked.

The Jackson-Hewitt study was conducted before these most recent government statements came out, at a time when an “increasing number of insurers were stating they would not accept debit and credit card payments” according to lead author Brian Haile.

There is a strong correlation between being uninsured and unbanked. The result is often a concentration of people from both categories in specific states. For example, 24 percent of non-elderly Floridians lack insurance coverage and 34 percent of probable recipients are unbanked. The potential for pockets of localized health care crises across the U.S. was significant.

“The fear is the exclusion of the unbanked and uninsured would effectively hollow out the promise of the ACA, with a disproportionate impact among African Americans and Hispanic Americans,” said Brian Haile.

“Given the importance of eliminating racial and ethnic disparities in access to coverage and in health status, we hope that Health and Human Services will follow through on the commitment made during National Minority Health Month earlier this year by Secretary Sebelius to use the ACA for this purpose.”

The mandate, while welcome, has some kinks that need to be ironed out to ensure its maximum effectiveness.

“We made several recommendations regarding clearer articulation of payment methods and stipulations,” offered Claire McAndrew. “The statements as made left some room for interpretation that would benefit from increased clarity.”

Brian Haile would also like to the added safeguards for people with limited ability to self advocate.

“Facilitating third party payments from such groups as community-based organizations, churches and family members on behalf of individual enrollees who may have banking or liquidity challenges should be allowed.”