August 28, 2013
Friends and Colleagues,
I am writing you with news about a final rule that HHS released earlier today. As you may know, Jackson Hewitt took a leading position earlier this year in publicly urging the federal government to prohibit insurers from discriminating against unbanked individuals who are eligible for the ACA’s tax credits. Working with Dr. John Graves, a Vanderbilt University health economist, we published a study on May 21, 2013 that reported that more than one in four (27%) of uninsured individuals eligible for the tax credits do not have bank accounts. We concluded that 8.5 million uninsured Americans would effectively lose access to the tax credit programs if insurers were allowed to implement their discriminatory policies. The report, which is entitled “Uninsured + Unbanked = Unenrolled” is available at http://jacksonhewittaca.com/ under “Resources”.
The federal government swiftly responded by publishing a proposed rule on June 14, 2013 to ban this discriminatory practice – and today, HHS moved to finalize the proposed rule. Specifically, the final rule states that a qualified health plan must, “At a minimum, for all payments in the individual market, accept paper checks, cashier’s checks, money orders, EFT, and all general-purpose pre-paid debit cards as methods of payment and present all payment method options equally for a consumer to select their preferred payment method.” This is fantastic news for the 8.5 million unbanked, uninsured Americans!
While we celebrate this federal action, we remain concerned with one shortcoming in the final rule. The preamble to the final rule notes that “At this time, we will allow issuers to decide whether or not to accept automatic deductions from credit or debit cards.” We were surprised by this policy choice, and we fail to see how limiting consumer options for automated recurring premium payments is consistent with the goal of ensuring continuous enrollment and minimizing attrition in the ACA’s insurance affordability programs. We urge federal policy-makers to reconsider this tentative choice. 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.
In short, federal policy makers made a meaningful difference in the lives of many Americans by adopting this final rule, but they have one step left to take. We urge them to take it as expeditiously as possible. And we applaud their ongoing efforts in this area to ensure access for the millions of uninsured, unbanked Americans!
Text of the relevant provision of the final rule
[45 CFR] § 156.1240 Enrollment process for qualified individuals.
(a) Premium payment. A QHP issuer must –
(1) Follow the premium payment process established by the Exchange in accordance with § 155.240.
(2) At a minimum, for all payments in the individual market, accept paper checks, cashier’s checks, money orders, EFT, and all general-purpose pre-paid debit cards as methods of payment and present all payment method options equally for a consumer to select their preferred payment method.
Citation: While the publication date in the Federal Register is unknown, the text of the rule is now available at http://www.ofr.gov/OFRUpload/OFRData/2013-21338_PI.pdf.