By Daniella Levine, JD, MSW
On October 1st, 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” – 7.3%, according to a report by the Federal
Deposit Insurance Corporation (FDIC). 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
(HHS) 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. In addition to ensuring that unbanked
South Floridians get the health coverage they need, 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,
according to data compiled by the Corporation for Enterprise Development
(CFED). An additional 21.4% of households 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 U.S. This is a
problem that, according to a Miami Herald article published last month,
has “grown in the wake of the recession.” Families are left with 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 in our area 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 in South Florida connect to quality
healthcare programs and services, establish financial security, and
improve their quality of life. This past year, 845 individuals received
financial literacy training, 2,831 individuals were assisted with
benefit enrollment, and over 5,000 residents attended our free tax
preparation sessions. These programs have granted many residents the
opportunity to better their financial prospects, providing them access
to financial literacy and capability.
In all, the efforts made by Catalyst Miami in conjunction with
several community partners have been successful in promoting financial
security in our communities; however, we can still do more.
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 tools like
public awareness campaigns to inform residents about the dangers of
high-cost payday loans. Local leaders 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. And
finally, as the Miami Herald suggests, financial institutions need to
gain the trust of these consumers.
We need to do more to prevent unbanked and underbanked families from
being shut out of everything from reliable health coverage to a secure
financial future. The gap in access to financial services is
symptomatic of the widening wealth gap in our nation. If policymakers
are to successfully increase access to health insurance, 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 to see how we can assist you to increase health and wealth
for yourself and for others, including through services in your place of
work.
Daniella Levine, Founder and CEO of Catalyst Miami, launched the
Prosperity Campaign in 2002 to meet financial and healthcare needs of
low and moderate income residents. The Prosperity Campaign has gained
national recognition and has been replicated statewide.
www.catalystmiami.org 305 576 5001
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