Insurance and Unbanked? We shall see.

I found several recent articles that signal when the health care changes go into effect next year with the inevitable rise in people having insurance, a new challenge may arise for unbanked citizens. There are, as of 2011, 1 in 12 American households that are unbanked, (referring to people who do not have a formal relationship with a traditional financial institution like a bank or credit union), almost 10 million in total. There are many reasons households (including the over 28.2% that earn less than $15,000 a year) choose not to have a bank account, but some of the biggest reasons they don’t is because either 1)they don’t think they have enough money to warrant one, or 2)they just plain don’t want one.

According to the articles I’ve found (both here and here) some the health insurers may require that customers pay with either a check or direct deposit from an account. Some companies may take money orders or cashier’s checks, but others may not – they have that flexibility.

Fortunately, one third of the unbanked want to open an account and think they will in the future, and something like this may be just the impetus they need.  Still others, however, will decide that it’s better for them to not get an account, and then will be vulnerable.

What’s going to happen with this? Will there be an increase in people who sell cashier’s checks? Will it increase the number of people with bank accounts? Will there be another kind of financial services item that is more economical for low-income households?

We shall see.

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