This article reports a strong correlation in older people between poor health and debt. The author draws the conclusion that being in debt (except mortgage debt) causes poor health in the elderly, possibly due to stress.
I would draw a different conclusion: that older (especially non-working) people who are sick tend to rack up large medical bills which they can’t pay. For example, people on Medicare who either have no “Medigap” insurance for the 20% that traditional Medicare does not cover or Medicare Advantage which often denies coverage.
Either way (or both), the numbers are large enough to have Macro impact.
**In Older Americans, Rising Debt May Adversely Affect Health**
**Research shows that debt has risen among older people, and those who owe are more likely to have multiple diagnosed illnesses.**
**By Paula Span, The New York Times, June 5, 2022**
**Researchers at the Urban Institute, by analyzing broad national data over nearly 20 years, have reported that indebted older adults fare measurably worse on a range of health measures: fair or poor self-rated health, depression, inability to work, impaired ability to handle everyday activities like bathing and dressing. Those in debt were also more likely to ever have had two or more doctor-diagnosed illnesses like hypertension, diabetes, cancer, heart and lung disease, heart attacks and strokes....**
**Data from the national Health and Retirement Study calculated that in 1998, about 43 percent of Americans over age 55 had debt, a median of $40,145. By 2016, about 57 percent had debt and more of it: a median $62,784, adjusted for inflation.**
**The proportion whose debt represented 30 percent of their total assets had risen to almost 45 percent, and the proportion whose debt-to-asset ratio had reached a worrisome 80 percent nearly doubled, to 15 percent....If the unsecured debt they owed amounted to 30 percent of their assets, they were 65 percent more likely to have trouble with daily activities compared with those with no debt and almost twice as likely if they owed 80 percent of their assets. ...** [end quote]
What are the Activities of Daily Living (ADLs)?
The Activities of Daily Living are a series of basic activities necessary for independent living at home or in the community. They are performed on a daily basis. There are many variations on the definition of the ADLs, but most organizations agree there are 5 basic categories.
- Personal hygiene – bathing/showering, grooming, nail care, and oral care.
- Dressing – being able to make appropriate clothing decisions and physically dress and undress oneself.
- Eating – the ability to feed oneself, though not necessarily the capability to prepare food.
- Maintaining continence – being able to mentally and physically use a restroom. This includes the ability to get on and off the toilet and cleaning oneself.
- Transferring/Mobility- being able to stand from a sitting position, as well as get in and out of bed. The ability to walk independently from one location to another.
The level of independence is based on whether someone can perform these activities on their own or they need help from a family caregiver.[end quote]
A person who can’t perform ADLs certainly can’t work and can’t live alone without help.
In the U.S., the years between age 55 (when health can start to fail for many people) and 65 (when people become eligible for Medicare) are especially risky because private health insurance is very expensive.
It is really concerning that so many older Americans are in so much debt. Very sad, since old, sick, indebted people are not likely to turn this around to a happy ending. If they are renting (or paying a mortgage), what will happen to them? Unless they are sick enough to be admitted to a Medicaid nursing home, they may become homeless.
Adults age 55 and older made up 10% of the total 2018 homeless population, compared to 29% in the overall population in Minnesota. [A cold state with a relatively small homeless population.]
Older adults are the fastest growing segment of the homeless population, even though they are also the age group least likely to experience homelessness. [end quote]
From a Macroeconomic standpoint, the old, sick debtors are not going to be strong consumers.