Obamacare Available to ‘Unbanked’ Customers Paying with Prepaid Debit Cards


Health insurance under the new Affordable Care Act will now be available to individuals without bank accounts who attempt to purchase coverage via prepaid debit cards or other non-cash means, according to an announcement from the government. A new rule has given millions of “unbanked” Americans access to the new coverage, dubbed Obamacare, as well as the federal subsidies that come in tow.

New Rule Closes Health Insurance Payment Loopholes

The Obama administration shared on Wednesday that it plans to move forward with a rule that would require health plans to accommodate households that don’t have traditional bank accounts.

Reports show that one in four uninsured people don’t have bank accounts and therefore cannot pay for coverage with debit cards or checks.

While the government has steered away from requiring health plans to accept cash for health insurance payments under so-called Obamacare, it has now issued the rule that requires the plans to accept cashier’s checks, money orders and prepaid debit cards, along with paper checks, electronic funds transfers from bank accounts and automatic deductions from a credit or debit card.

This final rule is expected to assist an estimated 8.5 million people without health coverage who would have difficulty getting tax credits to help them buy insurance on marketplaces that open on October 1.

Obamacare Payment Issues May Still Exist

Under the new rule, state-based exchanges will be allowed to partner with financial services companies to make payment options easier for consumers. But the rule does not limit those partnerships to nonprofit organizations that promise low transaction fees, as noted by administration officials.

Further, some tax preparation companies have concerns that low- and middle-income families that are eligible for tax credits may not be able to hold onto their health insurance if additional payment criteria are not specified.

Jackson Hewitt’s Brian Haile told NPR that he was concerned that the final rule didn’t specify that health plans need to accept automatic, reoccurring deductions from credit or debit cards — and that if consumers miss several payments, their coverage could be dropped and they could suffer penalties.

“Consumers will face tax penalties for being uninsured under the recently-released IRS rules about the individual mandate — and we should be making every effort to help consumers avoid those penalties and maintain coverage,” Haile said.

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