September is Hunger Action Month, a time for communities to consider how they can address a critical issue affecting millions of U.S. households: food insecurity. Health care plans and nonprofit organizations have been on the frontlines of the fight against this crisis, yet there is an important role that payments and fintech companies can play to improve Americans' access to healthy foods.
With a firm understanding of this national crisis, fintech companies can collaborate with health plans to reduce food insecurity levels by leveraging payments technology solutions as well as their brand and retail partnerships.
Food insecurity affects communities across the country. According to a 2021 report published by the United States Department of Agriculture (USDA), 13.5 million American households were designated as "food insecure." These are households that the USDA defines as suffering from a lack of "access by all people at all times to enough food for an active, healthy lifestyle." Additionally, 5.1 million of those food insecure American households were also identified as having "very low food security." These are households that report multiple instances of disrupted eating patterns and reduced food intake. This unfortunate condition can lead to severe negative health outcomes for these suffering individuals, including chronic disease and increased mortality rates.
Economic conditions are a common cause of food insecurity due to the simple fact that many of these households lack the financial means to purchase meals on a regular basis. Health care plans have taken significant steps on this front to help their members afford healthy foods, most notably through supplemental benefit programs that subsidize meal purchases for members. Fintech and payments technology providers can help further elevate the success of such benefit programs by ensuring funds are effectively and efficiently disbursed to families for grocery purchases and meal delivery services.
Prepaid cards offer a streamlined way for health plans to deliver benefit funds to members, especially since cards can be reloaded for repeat use. However, plans cannot rely on the standard prepaid cards that consumers purchase from most stores. They need a way to ensure funds are appropriately used to help lift households out of food insecurity. Payments technology providers can help overcome this obstacle by supplying health plans with prepaid cards built on restricted-spend platforms.
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Restricted-spend capabilities enable fintech companies and health plans to develop a catalog of universal product codes (UPCs). Plan-sponsored benefit cards can then only be used to purchase items with eligible UPCs at retail. This setup can significantly reduce administrative burdens for both the health plan and their members. The plan can rest assured that benefits funds will be properly used, while members do not have to submit receipts or wait for reimbursements. Instead, a retailer's point of sale automatically accepts eligible charges (such as for healthy foods), while informing the member when a different payment method is required for other purchases. With this unique technology, fintech companies can provide health plans with the means to effectively empower members to sustain a healthy diet.
Leveraging payments technology to deliver funds to households experiencing food insecurity is only half of the equation. Fintech companies can also help health plan members physically acquire meals, which is a particular challenge for those who live in food deserts that have limited access to traditional grocery stores. Yet instead of technology, the value that fintech companies bring to health plans are brand and retail partnerships.
As an example, InComm Healthcare enhances health plan supplemental benefit programs through partnerships with meal delivery services. Participating health plans can give their members the option to use benefit funds on delivery apps that specialize in food deliveries from grocery stores, farmers markets and more. Instead of requiring health plans to build such partnerships on their own, fintech companies can maintain these connections and bring more options to families that struggle to find reliable ways to access food.
During September's Hunger Action Month, it's important to remember the role that payments technology providers can play in working with health plans to solve food insecurity. This is a complex crisis that requires a multifaceted approach. By using payments innovations more effectively and leveraging partner networks, fintech companies can elevate health plan initiatives and ensure members have access to the nutrition they need to live healthy and productive lives.
