Today, we look at a big, fat map of credit scores reproduced from a recent economics paper. And while the map suggests any number of tantalizing questions, we are most intrigued by that big band of credit-score calamity that stretches across the American South.
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“The reason why credit scores are so low in the South has gotta be connected to medical debt, because that’s the most common type of unpaid bill that people have,” Braga said. And the South, he said, easily has the highest levels of medical debt in the country.Of the 100 counties with the highest share of adults struggling to pay their medical debt, 92 are in the South, and the other eight are in neighboring Oklahoma and Missouri, according to credit data from the Urban Institute. (On the other side, 82 of the 100 counties with the least pervasive medical-debt problems are in the Midwest, with 45 in Minnesota alone.)
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But health alone does not solve the puzzle: Several Northeastern states struggle with chronic health conditions and have good credit.A clue to the broader answer comes from a recent analysis in the Journal of the American Medical Association, which found that medical debt “became more concentrated in lower-income communities in states that did not expand Medicaid” after key provisions of the Affordable Care Act took effect in 2014.
https://www.washingtonpost.com/business/2023/02/17/bad-southern-credit-scores/
Republican-controlled states — and Southern states are controlled by Republicans — did not opt into the Affordable Care Act. That means their citizens have less access to health care, it’s more expensive, and far more likely to be done in the emergency department, the costliest section of any hospital. Republicans fought hard to strip Medicaid expansion out of the Affordable Care Act, and leave their poorest and most vulnerable citizens without coverage or access to treatment. The ostensible reason was unfunded mandates and states’ rights, but the reality was poorer health care and sicker citizens. By having the federal government backstop health care costs up front, states would have been able to extend coverage to more citizens, making their ongoing treatment more effective (by catching problems earlier, when they’re more treatable and for less money) and less costly. Yes, states had to come up with 10% of the cost initially, but the savings over time would be beneficial and cheaper for everyone. It also meant that states had a little of their own skin in the game, something Republicans really like to make sure poor people do, rich people less so.
This has repercussions for individual health (slot this in the category of No Duh), but it also means that people have worse credit scores, are forced to pay more for credit, and are less able to afford to pay for expensive credit because their health is compromised.