Sunday, February 5, 2017
Payment Processing and Obamacare
The above is a graphic illustrating the payment processing system used by many merchants and their customers. Although they are not banks, they adhere to many of the laws which apply to banks (such as: "Know Your Customer") which help protect us from financial crimes. I used to work for one of these firms.
Like banking, there has been a great shrinkage in the number of these firms. And a handful of these firms process the bulk of consumer payments made today. Typically, a merchant will be approached by a salesman from one of these firms, and then negotiate the price(s) for each transaction made via Phone or Internet, including the expected mix of ACH or Card transactions. (Lockbox transactions made by check are usually not included, as these payment firms are not banks.) Sometimes, the merchant absorbs the costs of processing the transaction - as is often the case when one does business with major stores. And at other times, the merchant and the processing firm tells the customer that he is being charged a price to use this "alternate" payment mechanism. I have done business with several firms using these companies, and resolving disputes can get tricky unless one keeps ALL appropriate paperwork.
As I said above, I worked for one of these firms, and will be purchasing my health insurance from the firm until my COBRA benefits run out. Making a $2.00 payment error caused my old firm to send me a letter, which in turn triggered my thoughts about the ACA and what might happen if I were unable to buy decent health insurance at an affordable price. If I were to use this firm's services to make a healthcare payment, it would cost me an extra $20 each time I make a non-recurring payment. That's a little over 3% added to my bill IF I want to pay electronically. So I go "Old School" and use checks instead. I can only imagine what I'd be thinking if I had little savings and had to worry about that $20, much less paying $630 as an individual.
Sadly, I am no longer sure that I will be able to get decent health insurance via the healthcare exchanges (as GFJ does today) when COBRA runs out, due to the shenanigans going on in Washington DC. Although our president has said that he wants Repeal and Replace to take place concurrently, the GOP has not settled on a single formula which will give them maximum cover with the voting public. Leaked recordings indicate that the GOP members of the Legislative Branch of government are like Wile E. Coyote when he caught the Road Runner. He didn't have a clue of what to do next. (Yes, they did make that cartoon, and it was very funny!)
Hopefully, our leaders will avoid playing a game of Repeal, Delay, then Replace. Tweak the existing law, lie that it has been repealed, and claim that it has been replaced. This way, one can take the credit for improving the law when they are ready to act. There is no need to rush into doing something stupid. There is only a need to improve what we have without hurting people in the name of political expediency. Maybe we'll get lucky this time, and see Washington DC come to its senses and do something right within the next two years....