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Money Woes Accompany Chronic Disease

Study finds financial troubles even among those with insurance

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Even among Americans with insurance, those with chronic illnesses are significantly more likely to experience financial troubles than healthier individuals. Moreover, as the number of chronic illnesses a person has increases, so does the debt they likely carry, according to a new study in JAMA Internal Medicine.

“Simply put, commercially insured people with chronic conditions are at very higher risk of financial distress,” study coauthor Nora Becker, M.D., a health economist at the Institute for Healthcare Policy & Innovation at the University of Michigan, said in a statement.

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The cross-sectional study included more than 2.8 million adults (age 21 and older) enrolled in a commercial preferred provider organization in Michigan. Using insurance claims and credit report data, the researchers analyzed the financial stress for individuals based on 13 chronic conditions: cancer, congestive heart failure, chronic kidney disease, dementia, depression and anxiety, diabetes, hypertension, ischemic heart disease, liver disease, chronic obstructive pulmonary disease and asthma, serious mental illness, stroke, and substance use disorders.

Study findings

The analysis showed increasing rates of medical debt in collections, non-medical debt in collections, total delinquent debt, low credit score and recent bankruptcy as an individual’s number of chronic conditions increased.

For example, individuals with seven to 13 chronic conditions had a 32 percent chance of having medical debt in collections, compared to just 7.6 percent among individuals with no chronic conditions. Among the adults who had medical debt in collections, the total amount was likely to be $1,252 for those with seven to 13 chronic conditions, compared with $784 for those without chronic conditions, according to the researchers.

Other predicted probabilities for those with seven to 13 chronic conditions were:

  • Non-medical debt collections — 24 percent, compared with 7.2 percent for no conditions
  • Delinquent debt — 43 percent, compared with 14 percent for no conditions
  • Low credit score — 47 percent, compared with 17 percent for no conditions
  • Recent bankruptcy — 1.7 percent, compared with 0.4 percent for no conditions

The study findings have important implications, according to the researchers, who point out that “worsened financial health is associated with increased rates of forgone medical care, worse physical and mental health, and increased mortality.”

The researchers also found significant variation in the likelihood and amount of medical debt in collections across the specific chronic conditions.

“There were substantive differences across chronic conditions, both in the probability of having medical debt in collections and the amount of medical debt in collections. Individuals with serious mental illness (such as schizophrenia or other psychotic disorders) and substance use disorders were the most likely to have medical debt in collections, while the risk was smaller — but still increased — for people with cancer, high blood pressure, and anxiety/depression,” Becker said.

Becker expects that there is an interplay at work between chronic illness and financial distress: “Financial problems could cause someone to neglect their health, leading to more chronic disease, but more chronic disease also causes more medical costs and inability to work, potentially causing worse financial health.”

Becker plans to continue to explore the relationships. “That is the only way we’ll be able to figure out how to better protect patients from the financial impacts of illness,” she said.