CRC submitted the letter below as part of our work advocating on behalf of low income Californians. In this letter to the Centers for Medicare & Medicaid Services (CMS), CRC suggests that patients should have several options available for paying for their premiums for Qualified Health Plans. CRC also advocates against CMS partnering with any businesses that will offer prepaid cards loaded with high fees for consumers.
July 16, 2013
Marilyn B. Tavenner
Administrator, Centers for Medicare & Medicaid Services
Department of Health and Human Services
Room 445–G, Hubert H. Humphrey Building
200 Independence Avenue SW.
Washington, DC 20201
Re: CMS–9957–P; Patient Protection and Affordable Care Act; Program Integrity: Exchange,
SHOP, Premium Stabilization Programs, and Market Standards; Proposed Rule (Federal
Register, Vol. 78, No. 118, June 19, 2013)
Dear Administrator Tavenner:
Please accept these comments from the California Reinvestment Coalition in response to the Centers for Medicare & Medicaid Services’ request for information about implementation of the Affordable Care Act. Our comments are specifically about the “Enrollment Process for Qualified Individuals” section (§ 156.1240).
The California Reinvestment Coalition is a non-profit coalition of over 300 organizations from across all of California. We advocate for financial services practices and policies that respond to the needs of low income households, communities of color and other economically and politically marginalized communities in California.
Please Expand the Types of Acceptable Methods to Pay for Health Coverage Costs.
We strongly urge that Qualified Health Plan issuers be required to accept payments for premiums and other health coverage expenses in forms other than checks and credit card. In particular, we urge you to adopt regulations that require insurers to also accept money orders and other payment platforms including prepaid cards, electronic money transfer (such as MoneyGram), and online money transfer platforms (such as PayPal). These are the payment methods most often used by those without bank accounts that meet their financial needs, those often referred to as unbanked or under-banked.
Nearly 8% of California’s 12 million households have no bank account, approximately 18% have an account that does not meet all of their financial needs. The most common groups of unbanked persons include low-income individuals and families, those who are less-educated, households headed by women, young adults and immigrants. These are the most vulnerable households that the Affordable Care Act is intended to help and they should not be left un-insurable.
Please Avoid Partnering with Payment Service Companies that Will Prioritize Profit from Payment Fees over Ensuring Affordable Care Coverage.
However, we are extremely concerned that you discourage the use of payment products that exploit and strip the scarce resources of these vulnerable families. Currently, the pre-paid card industry is exploding in size, sophistication, and market power and it is largely unregulated. There are literally thousands of cards sold with varying fee terms offered by as many different companies, some with mixed motives, at best, that can pit the company’s fee generation and revenue at odds with the service provided to customers.
We have heard from low income people who have been charged $1 for each use of a prepaid card, $1 for checking the card’s balance, $1.50 for a declined purchase, and more fees for loading money to the card, for failing to use the card frequently enough, and on and on. Money transfer companies, both online and storefront, are similarly diverse in fee rates and nearly as unregulated.
We strongly warn against partnering with for-profit companies that sell payment platforms including prepaid cards and money transfer services, such as Jackson Hewitt, which target the unbanked and under-banked population to sell unregulated financial products. Such companies would necessarily have their fee generated revenue interests above the long-term interests of customers they target.
In fact, Jackson Hewitt, among others, were famously spurned by the IRS for selling expensive Refund Anticipation Loans that would cost lower income families, including those qualified for Earned Income Tax Deductions, hundreds of unnecessary fees. We strongly condemn those practices and ask that you not provide these companies with yet another opportunity to fleece lower income customers in the guise of a needed service.
Partner Instead with Reputable Non-Profit Organizations that will Provide Safe and Affordable Services.
We urge you to partner with non-profit enrollment assisters that specialize in providing financial management services to the unbanked and under-banked population, such as choosing safe and affordable financial tools, help opening bank accounts, and free tax-time assistance through the IRS Volunteer Income Tax Assistance (VITA) and the Tax Counseling for the Elderly (TCE) programs.
We also join the Assets and Opportunity Network at the Corporation for Enterprise Development to ask that you consider additional changes to the payment process that will help facilitate timely payment especially for low-wage workers and the unbanked and under-banked consumers. These can include:
- Deductions from paychecks: Automatic withdrawals from payroll help facilitate on-time payment. Similar to retirement savings or social security deductions, payroll deductions for insurance purchased on the exchange will ensure regular on-time payments, and should be an option.
- Ability to pay in advance: If open enrollment in states across the country were aligned with tax time, consumers could pay for their premiums via their tax return. CMS should work with the Department of the Treasury to explore mechanisms for streamlining payments through resources consumers receive at tax time. Many Volunteer Income Tax Assistance (VITA) sites work with the unbanked population and can facilitate community outreach for this payment option.
- Use of navigators: Navigators should be required to provide payment information to each consumer who is purchasing health insurance via the Marketplace. Navigators can be key ambassadors of this information. We recommend creating FAQs on payment options for this formerly uninsured population.
- Website development: Each state will have either its own website or they will be referring people to the federal website to access the Marketplace. Payment information should be provided on the website and should be sent to consumers via email or traditional mail upon purchasing their insurance. Given that immigrants make up a significant percentage of the unbanked community, this information should be accessible in a variety of languages.
With great appreciation for the hard work of providing health insurance for all families, we thank you for the opportunity to submit these comments.
California Reinvestment Coalition