CMS Says Insurers Must Accept Prepaid Cards (Sept. 3, 2013)
Sept. 3, 2013
Health insurers must accept prepaid cards as payment for coverage mandated by the Affordable Care Act, the Centers for Medicare & Medicaid Services (CMS) said in a rule issued last week. The rule paves the way for more than 8.5 million uninsured people who would otherwise have difficulty buying coverage on insurance exchanges, which begin enrollment on Oct. 1. Insurance companies typically require payments by personal check or electronic withdrawal from checking accounts, presenting problems for those without a checking account—one in four of the uninsured people eligible for federal insurance subsidies, according to a report from tax preparation firm Jackson Hewitt.
The new rule requires insurers to accept “paper checks, cashier’s checks, money orders, replenishable prepaid debit cards, electronic funds transfer from a bank account, and an automatic deduction from a credit or debit card.”
Obama Administration officials said state-based insurance exchanges could partner with financial service and payment providers, but the CMS’s new rule doesn’t limit those partners to nonprofit organizations that promise low transaction fees, as many advocates for the rule had requested. The federally run exchanges have no plans to partner with any payment services for the first year of their operation, but the government didn’t rule out such partnerships in the future.
