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Belleville, Ill. (Vocus) June 10, 2008

The nationwide rollout has begun and Social Security Disability Insurance (SSDI) recipients in some states already have the option of receiving their benefit payments electronically on a debit card, rather than via a paper check. However, eligible individuals many of whom are unbanked should have a clear understanding of the pros and cons of opting for the debit card, particularly the financial ramifications, according to Allsup, which represents tens of thousands of people in the SSDI process each year. It also offers services that support the financial and health well-being of individuals with disabilities.

Before signing on to or totally dismissing the idea of the debit card program, potential cardholders should look at how they are likely to use a card, said Paul Gada, personal financial planning director of the Allsup Disability Life Planning Center. ”For some, the card may make sense. For others, they may realize after looking at their spending habits that getting a bank account may really be the best option. And there will be others that will always operate with cash only, regardless of the drawbacks it presents.”

The debit MasterCard program, called Direct Express, is run by the U.S. Treasury Department through Comerica Bank with the intent to encourage Social Security recipients who do not have a bank account to elect to have their benefits loaded electronically onto a debit card. Direct Express has been introduced in 10 states: Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina and Texas. The rest of the nation will be phased in throughout the summer.

Cost savings for the government could be significant, based on estimates from the Treasurys Financial Management Service. For example, it cost 89 cents to issue a paper check in 2006 compared with 9 cents to process an electronic payment. If the 4 million recipients of Social Security, SSDI and Supplemental Security Income (SSI) who dont have bank accounts signed up for debit cards, the savings could be $ 44 million annually.

Having monthly benefits electronically deposited onto debit cards also has its advantages for recipients, most notably convenience and security. For example, people with limited mobility who have the debit card would not have to make a special trip to cash their SSDI check or be concerned if they were hospitalized or otherwise unable to retrieve their benefit payment. Funds on the card are FDIC insured, just like money in a bank account, so the money is fully protected if the card is lost or stolen, although there will be a fee the second time a card needs to be replaced in any given year.

Evaluating the Costs

While cost savings for the government and taxpayers are obvious, it may not be as clear-cut for debit-card recipients. They may pay even more in transaction fees than the average six dollars to have a paper check cashed, especially if they dont pay attention to how theyre using the debit card.

The following questions are among those that Gada recommends before signing up for a debit card:

How accessible to you is an ATM in the Comerica network?
How often would you make ATM withdrawals and would they be at in- or out-of-network ATMs?
How often would you use the electronic bill payment feature?
Will the companies you are paying electronically charge you a fee for electronic payment?
Is there a bank in your area that could provide you with a more cost-effective solution for the features you want, such as ATM, electronic bill pay or direct debit?
If you are concerned about opening a bank account, have you spoken with a local bank to see if they can help alleviate your concerns?
Social Security recipients participating in the Direct Express program are allowed one free ATM cash withdrawal per month from a designated ATM. They are assessed a 90-cent fee for each additional ATM withdrawal. Cardholders may be charged an additional surcharge fee by ATM owners outside of the Comerica Bank network, which issues the debit cards. Additionally, program participants have access to online bill payment for a fee of 50 cents per online bill payment and can receive a paper statement for a 75-cent monthly fee.

Gada advises potential cardholders to consider how they would use the debit card. For example, rather than having to pay for a cashier check or carry large amounts of cash and pay bills in person, incurring a small transaction fee for electronic bill payment may be worth it, particularly for individuals who have a difficult time getting around. However, Gada noted, individuals should check to see if the organization they are paying will assess an additional charge for accepting electronic bill payment.

On the other hand, people who are going to head for an ATM every time they need cash will find transaction fees quickly adding up to little added value.

”In these cases, its time to seriously consider what is preventing you from getting an account at your local bank, because that probably would be your best option,” said Gada. ”Many banks offer no minimum balance checking accounts where you can have your Social Security benefits direct deposited and electronically pay bills or use their ATMs at no additional charge.”

Overcoming Banking Barriers

One of the reasons that some Social Security recipients continue to insist on paper checks is the fear that their bank accounts could be attached by creditors. However, under federal law, Social Security benefit payments are protected from attachment, meaning creditors do not have the right to take these funds from a recipients bank account. The same rules will apply to funds placed on Direct Express debit cards. There are a few explicit exceptions to the rules guarding against attachment of Social Security benefits. For example, Social Security funds can be taken to pay child support or alimony payments the individual owes.

”At any given time, there are likely millions of dollars in Social Security payments that are at risk because people on fixed incomes got into debt or are having a dispute with a creditor,” said Gada. ”Unfortunately, they are acting on inaccurate information that has them afraid to put their money into bank accounts where it can be protected and they can be afforded other benefits of being banked.”

About Allsup

Allsup, Belleville, Ill., is a leading nationwide provider of financial and healthcare related services to people with disabilities. Founded in 1984, Allsup has helped more than 100,000 people receive their entitled Social Security Disability Insurance and Medicare benefits. Allsup employs more than 500 professionals who deliver services directly to consumers and their families, or through their employers and long-term disability insurance carriers.

For more information, visit .


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Belleville, Ill. (PRWEB) June 28, 2012

The U.S. Supreme Court ruling to uphold portions of the Affordable Care Act of 2010 (ACA) will have a profound impact on people with disabilities and those relying on Medicare. But more needs to be known about the affordability of care before determining the laws actual benefit for people with severe disabilities, according to Allsup, a nationwide provider of Social Security Disability Insurance (SSDI) representation and Medicare plan selection services.

Access to healthcare is essential for the well-being of millions of seniors and people with disabilities, said Tricia Blazier, senior disability life planning manager for Allsup. While the ACA is not perfect, it generally has had a positive impact for most Medicare beneficiaries. For example, it provides preventive service coverage and shrinks the prescription drug donut hole.

It also has shown promise for people with disabilities because of future provisions set to take effect through 2014. However, Blazier noted, the overall benefit is yet to be determined, with affordability of care being a significant hurdle that still needs to be addressed.

Even with healthcare reform, many of the initial coverage options have been out of the financial reach of SSDI beneficiaries, for example, the Pre-Existing Condition Insurance Plans (PCIPs), Blazier said. The ruling should help resolve some of the uncertainty surrounding healthcare reform, and the broader areas of reform now can move into place. Hopefully, this means improvements to costs and coverage options to support people with permanent disabilities.

Below, Allsup reviews the key provisions on which the Supreme Court ruled and how those decisions will affect Medicare beneficiaries and people with disabilities.

The Individual Mandate

The Supreme Court ruled that the individual mandate requiring people to have coverage is constitutional. Under healthcare reform, all U.S. citizens and legal residents will be required to have qualifying health coverage starting in 2014.

For people with disabilities, this means a number of positive developments. Insurers already are required to provide coverage to children with pre-existing conditions. Starting in 2014, insurers can no longer deny coverage to anyone with pre-existing health conditions and lifetime limits will be eliminated. This is the same year that individuals will be required to have healthcare coverage and state exchanges will be operational.

People with disabilities who are awarded SSDI benefits must wait 24 months after receiving cash SSDI benefits to become Medicare eligible. Allsup has found that one-third of individuals with serious disabilities will lose their health insurance while awaiting Medicare eligibility and are unable to obtain new coverage because of costs and pre-existing conditions.

Without the individual mandate, the cost of insurance would largely continue to be out of reach for people with disabilities, Blazier said. We have already seen this with the PCIPs, where enrollment is lower than expected and the actual cost of coverage is nearly double what had been the anticipated cost.

PCIPs, essentially the precursors to the state exchanges required under healthcare reform, are plans that provide insurance to people with pre-existing conditions who cant get coverage elsewhere at the same market rates as healthy consumers. PCIP participation has been lower than expected and, while costs vary widely by state, each participant is expected to pay $ 28,944 in medical costs in 2012more than double the expectation, according to a U.S. Department of Health & Human Services February report.

For people who cannot afford coverage in the private market, the state exchangeswhich will be required to also cover people with disabilitiesshould provide a bridge, but only if theyre truly affordable, Blazier said.

The exchanges will allow individuals to compare qualified plans and provide them with information on whether they are eligible for Medicaid, the Childrens Health Insurance Program (CHIP) or other programs to reduce the costs of insurance. For any citizen, especially those with physical and mental disabilities, simplifying how they go about assessing their options and eligibility for complicated programs is an important improvement.

Under the ACA, those without coverage will face a penalty that starts in 2014 of $ 95 per adult and $ 47.50 per child, up to $ 285 for a family or 1 percent of income, whichever is greater, and continues to increase through 2016. After 2016, cost-of-living adjustments will be applied.

Medicaid Expansion Tempered

The ACA had required states to adopt expanded Medicaid eligibility and coverage thresholds in order to remain eligible to participate in the joint federal-state program. Medicaid provides healthcare to people with low incomes and those with disabilities.

However, the Supreme Court ruled that Congress cannot penalize states that choose not to expand Medicaid. As a result, states will not lose their existing Medicaid funds if they dont comply with this expansion, which called for Medicaid in every state to cover people under age 65 with income of 133 percent of the federal poverty line starting in 2014. (The federal poverty line is $ 23,050 for a family of four in 2012.)

In states where Medicaid is expanded, the lower thresholds will help many individuals who are not able to work because of a disability and have to make a daily decision between being able to afford to eat or taking medications that are essential for their conditions, Blazier said. We know that when people have to make these types of trade-offs, it often increases healthcare costs down the road.

What ACA Now Means for People with Disabilities and Medicare Beneficiaries

Provisions of healthcare reform already offering more affordable coverage to Medicare beneficiaries and people with disabilities include:

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