Until recently, the options for how the unbanked would participate in the Marketplace were unclear. However, on August 28 the Department of Health and Human Services issued a final rule requiring insurers to accept various forms of payment, including paper checks, cashier’s checks, money orders, EFT and general-purpose prepaid debit cards, so that families without checking accounts won’t lose the opportunity to purchase the insurance required by law.
Under the Affordable Care Act (ACA), over 2.5 million Texas residents are expected to qualify for tax subsidies that can be used to purchase insurance through the Marketplace. However, 29 percent of uninsured households in Texas have no checking or savings accounts and are effectively “unbanked,” according to a report by the tax firm Jackson Hewitt.
These new ACA rules have resulted in insurers accepting a broader variety of payment options, and in the process shed new light on a primary cost of being unbanked – the exclusion of unbanked families from certain products and services. Having a bank account is an essential on-ramp to other financial products that help families reach financial stability such as an emergency savings account.
Fortunately, programs in some Texas communities are helping the unbanked open bank accounts, including local Bank On campaigns and tax-time savings opportunities offered through some Volunteer Income Tax Assistance (VITA) programs. Local Bank On campaigns, typically coordinated by local governments with “backbone” nonprofits, are public/private partnerships that reduce common barriers for individuals to get a bank account. Four Texas communities – Dallas, Houston, Central Texas and the Brazos Valley – have Bank On campaigns. Some VITAprograms, including those participating in the OpportunityTexas Tax-Time Savings Project,also help families open savings accounts, encouraging families to save a portion of their tax refund into their newly opened account.
While all these programs are a great step to expanding access to the financial mainstream for these families, we can do more. The potential enrollment of unbanked families into health plans presents an opportunity for insurers and groups promoting health insurance enrollment to also promote bank account enrollment through collaborative efforts with local Bank On and tax-time savings campaigns.
In addition, opportunity exists for VITA and other programs providing financial stability services to help families enroll in health plans through the new Marketplace – one local example of this is Foundation Communities’ Insure Central Texas program. Click here to learn more about Foundation Communities’ efforts!
Written by: Lauren Rosen and Lauren Stebbins, Center for Public Policy Priorities. Cross-posted from the Better Texas blog.Posted in The Texas Treatment|Tagged affordable care act, health coverage, health insurance, health insurance marketplace, Tax Subsidies, Texas|