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January 2014 St@teside

New Brief Examines Premium Payment Options for the Unbanked in State-Based Marketplaces

The Affordable Care Act (ACA) will make health insurance more accessible to millions of Americans, and flexible payment methods will be needed to ensure accessibility is not hampered by the absence of a traditional bank account, an all too common scenario for many uninsured households. It is estimated that as many as one in four uninsured individuals eligible for Advance Premium Tax Credits (APTCs) do not have a checking account, presenting a basic sign-up challenge as timely payment must be made to both initiate and maintain coverage on a monthly basis.

This brief, “How State-Based Marketplaces Can Better Meet the Needs of the Unbanked and Underbanked,” prepared by Wakely Consulting Group with support from the State Health Reform Assistance Network, offers some insights on this sizable population and explores various solutions that marketplaces and issuers might consider in early 2014 to address the payment challenges presented by unbanked and underbanked individuals. These solutions include:

  1. Payment service companies offering walk-in bill payment facilities for consumers with cash as their preferred payment method;
  2. Money orders, a form of guaranteed payment provided by non-banking entities;
  3. Prepaid debit cards loaded with guaranteed funds; and
  4. Money loaned against a filed tax return with an expected refund.