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