Rather than expect consumers in critical growth segments to come to credit unions on their own, several credit union leaders are taking a unique, proactive stance in the pursuit of new members. By adapting their products and services to the needs of important target groups, these credit unions are doing more than talking about the credit union difference—they’re acting on it.
This month, 44 credit unions in Nebraska and Iowa representing 25% of our total members made the strategic decision to offer healthcare coverage to their members. In doing so, they are also opening the door to new membership from the Hispanic and Gen Y markets.
The strategic decision for these credit unions to participate came from the league partnership with CoOportunity Health, a not-for-profit organization created in response to the Patient Protection and Affordable Care Act.
The partnership between the Iowa Credit Union League, Nebraska Credit Union League, and CoOportunity Health has been in development for more than two years and is the first of its kind among cooperatives nationwide.
It will give participating Iowa and Nebraska credit unions the tools to provide member outreach and education on healthcare reform while making CoOportunity Health’s insurance products available to individuals, families, and businesses—both current and potential members alike.
Some estimates predict as many as 30 million uninsured Americans will begin shopping for coverage this fall as a result of the Affordable Care Act’s individual coverage mandate. By 2016, the penalty for not having healthcare coverage will rise to $695 or 2.5% of taxable income, whichever is higher.
That could be a heavy burden for a young person looking to pay down student loan debt, start a retirement account, or buy a home. Additionally, now that the employer mandate has been extended beyond the original deadline of January 1, 2014, even more consumers are expected to be on their own for coverage starting next year.
Beyond the need for financial guidance and affordable health insurance, Hispanic and Gen Y consumers have another commonality: they are young and fast-growing. According to the Urban Institute, most adults in their 20s will qualify for government subsidies under the Affordable Care Act. They will look to trusted advisors to help them choose the best coverage option for their needs.
Credit unions are in a unique position to offer this guidance as a value-added—or even as a door-opening—service. And we believe CoOportunity Health will be a competitive, member-focused alternative to the for-profit health insurance providers that will be targeting this audience.
Because people who are most in need of health insurance will likely be the first to take advantage of coverage offered through government-sponsored healthcare exchanges, young and healthy consumers represent attractive opportunities for credit unions. They also may be in the market for health insurance for the first time, thus seeking guidance and education in making their decision.
In addition, one estimate predicts approximately 10.2 million Hispanics in America will be eligible for coverage through healthcare exchanges. As such, there is significant attention being paid to the impact of the Affordable Care Act on Hispanic communities in the U.S., including the millions of immigrant and underserved families.
The National Council of La Raza, a Hispanic civil rights and advocacy organization, for example, is dedicating resources to helping community-based organizations understand the need for accessible healthcare among Hispanic immigrants. In July, it hosted a summit in New Orleans to address how immigration reform may impact the continued implementation of the Affordable Care Act.
In Iowa and Nebraska, credit unions will receive help introducing Hispanics to CoOportunity Health through Coopera, a national credit union leader (and CUNA partner) in helping our movement attract this vital growth market.
As credit unions look for ways to build sustainable products and services, they must be attractive to younger members. Hispanic and Gen Y consumers are critical segments for credit unions looking to invest in service to next-generation consumers.
The effects of the Affordable Care Act, however, are predicted to be far-reaching and felt by many socio-economic sectors nationwide. Beyond Hispanic and Gen Y consumers, it’s estimated that 80 million currently insured consumers will begin searching for new insurance providers when the act becomes law simply because they will be priced out of their existing plans.
Credit unions, because of their “people helping people” philosophy, are in a unique position to help young Americans, Hispanics, and small business owners prepare for and navigate through this time of great uncertainty in our healthcare system.
The opportunity for credit unions to engage is tremendous. Forty-four will begin their efforts this fall.