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MELISSA BLOCK, HOST:

As the Obama administration rolls out the federal health law, it's grappling with a long list of questions that could slow or derail the effort. Among them: Will the online insurance marketplaces be up and running, and will customers actually use them.

Well, reporter Sarah Varney is about to add another question to the list. How are people who don't have bank accounts going to pay?

SARAH VARNEY, BYLINE: According to federal statistics, 1-in-5 households in the U.S. - that's some 51 million adults - have only a tenuous relationship with a traditional bank, relying instead on check-cashing stores and money lenders. The new federal health law, which requires everyone to carry health insurance, presents a particular problem for those households.

Health plans accept payments by check or an electronic transfer from a bank account. And those options won't work for the so-called un-bankables, says Dan Schuyler, a consultant at the firm Leavitt Partners.

DAN SCHUYLER: You don't want to take these millions of un-bankable people through the entire enrollment process and then at the end of line say, OK, the only way you can pay for your share of the premium is with a bank account number.

VARNEY: The consequences could be severe. After all, when your cable gets turned off, you miss "The Walking Dead" or "Pawn Stars." When your insurance is canceled, starting next year, you'll be breaking federal law and you'll be liable for any medical bills.

I met Tran, a 25-year-old community organizer and Ivy League graduate, at a coffee shop in Daly City, California.

TRAN: I closed my bank account a few months ago because Bank of America was charging me around 10 or $12 a month and I felt like I was not happy with the charges ever since, like, I wasn't working a job that had direct deposit.

VARNEY: Tran doesn't get benefits at her job and was turned down when she applied for health coverage on her own. She's hoping to get hired to a full-time position and asked that we use just her last name so it didn't give her bosses a bad impression. Researchers who study consumer financial behavior say people have good reasons to spurn banks.

New immigrants may have distrusted the banks in their home country and moderate-income earners on tight budgets have been stung by bounced checks and overdraft fees.

TRAN: A bank account is extremely stressful when you don't have a job that's reliable.

VARNEY: Consumers like Tran will need health insurance payment options that are simple, easy and affordable, says Brian Haile. Last year, Haile was wrestling with this problem on behalf of the state of Tennessee. Now he oversees health services for Jackson Hewitt.

BRIAN HAILE: I think there is just a dawning awareness that this is a large problem. When I worked for the state in Tennessee, we raised these issues with the federal government well over a year ago and in a series of about four or five letters. Didn't get much of a response.

VARNEY: There are no laws mandating that insurers accept all forms of payment, including credit cards or the cash-loaded prepaid debit cards that people with bank accounts often rely on. And the federal government doesn't appear eager to push the issue out of fear it will scare off insurance companies from selling plans on the exchanges, say current and former state health officials.

As for the health plans, they say they'd rather decide the issue themselves. Last month, federal health officials clarified that health plans selling coverage on the federally run insurance marketplaces will have to accept payments in ways that don't discriminate against their customers.

But just what that means, no one seems to know. Insurance carriers are in a pickle since the transaction fees for credit cards and prepaid debit cards can run as high as 4 percent. If only one company takes the plunge, its costs are likely to be higher, scaring away customers. And the prepaid cards popular with low-wage workers come with their own hazards, says Brian Haile.

HAILE: If you accept reloadable debit cards, are you, in fact, getting folks with lower health status? That's a real risk when you're in the insurance business so you can't be the only one in the insurance business who's picking up folks with those health risks. I guess, ideally, what we would see is a uniform national standard where all issuers or all insurers had to accept these forms of payment.

VARNEY: For now, it's a problem with no elegant solution. Prepaid debit cards and credit cards could be options, consumer advocates say, if the federal government stepped in to negotiate lower rates with the card companies as it did for tax payments to the Internal Revenue Service. As for Tran, she pays her student loans with a money order and figures she might do the same when she's required to buy health insurance starting in January, unless she snags that full time job before then.

For NPR News, I'm Sarah Varney.

BLOCK: This story is from our partner Kaiser Health News, a nonprofit news service.

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