On Oct. 1, the federal government will open up a new health-insurance marketplace where an estimated 1.7 million Floridians will have new health-insurance options and financial assistance to help them purchase coverage.
However, many of the uninsured households in our state may face challenges purchasing coverage unless the marketplace adopts alternative payment methods. Many do not have checking or savings accounts and are effectively “unbanked.” The problem is that insurance companies often require individuals to pay their monthly premiums via automatic withdrawal from a checking account. No account, no insurance.
Federal officials at the Department of Health and Human Services have proposed requiring insurers to accept a menu of payment options, including cashier’s checks, money orders and prepaid debit cards so that families without checking accounts won’t lose the opportunity to purchase the insurance required by law.
Those proposed rules should become the law of the land.
But we shouldn’t stop there. We must also find ways to address the larger problems that prevent these households from joining the financial mainstream. More than one in five households in Miami are considered unbanked. An additional 21.4 percent are “underbanked,” meaning they may have a bank account, but still use alternative financial services like check cashers and payday loans. These numbers place Miami as the most unbanked and underbanked large city in the United States. Families have little opportunity to save for the future, build credit and turn their hard-earned cash into valuable assets.
We have witnessed firsthand the impact of programs and services that help families open bank accounts and achieve long-term financial security. Through the Prosperity Campaign, a flagship initiative of Catalyst Miami that has spread throughout the state, lower-wage individuals and families connect to quality healthcare programs and services, establish financial security and improve their quality of life. This past year, 845 people received financial literacy training, 2,831 were assisted with benefit enrollment and over 5,000 residents attended our free tax preparation sessions. These programs reach a mere handful of the households they could potentially help. Our government leaders need to play a stronger role in connecting residents to the financial mainstream by using public awareness campaigns to inform residents about the dangers of high-cost payday loans. They can also help bring together area banks, credit unions and community organizations to extend their services to the unbanked and underbanked residents of our community.
The gap in access to financial services is symptomatic of the wealth gap in our nation. If policymakers are to successfully increase health-insurance access, expanding opportunities to join the financial mainstream should be a key part of that effort.
Catalyst Miami is proud that its Prosperity Campaign has assisted many thousands and brought in millions in new revenue to our community. We will be joining efforts to promote use of the Affordable Care Act marketplace and increasing our financial counseling services to promote greater financial capability for our low and moderate income residents. Contact us at www.catalystmiami.org to see how we can assist you to increase your health and wealth.
Daniella Levine, president/CEO, Catalyst Miami