October 16, 2009
For aging
Americans, the years just before retirement can be critical to their
financial future, especially if they don't have health insurance.
While those over 65 have coverage under Medicare, those under 65 and who lack health coverage fear the one thing that can wipe out resources faster than a collapsing stock market - a serious illness.
"We found that for a typical household this costs - in lost savings - between one-third and one-half of their total accumulated financial assets relative to households with similar, but insured individuals," said Keziah Cook, a Ph.D. candidate in economics at Northwestern University in Evanston, Ill, who led a study of uninsured Americans.
Uninsured adults who developed a major medical problem before retirement typically lost $4,176 more than similar insured adults did.
In contrast, insured adults who become sick before retirement tended to fare better than the uninsured do financially. Near-elderly adults with insurance who experience a major illness do not generally experience a decline in wealth, the analysis revealed.
Cook and colleagues analyzed 14 years of data from the Health and Retirement Survey, an ongoing survey of 22,000 Americans over 50. They focused on households with an adult between ages 51 and 64 who had recently received a diagnosis of a major medical problem, such as cancer, diabetes, heart or lung disease, stroke or emotional or psychiatric disorders.
The analysis examined changes in non-housing wealth only, such as checking and savings accounts, CDs and stocks and bonds, and did not include housing equity.
"Newly ill people without insurance do suffer large asset loss," said Bruce Kinosian, M.D., an associate professor of general medicine and a geriatrician at the Hospital of the University of Pennsylvania in Philadelphia.
However, Kinosian said that the authors' findings on asset changes in the insured might be less reliable, in part because they did not consider non-medical direct expenses that might occur after a new illness, such as lost wages or job loss.
The findings suggest that the existing private health insurance system in the United States is sufficient to protect the financial assets of people nearing retirement age and that expanding the current health care system could help protect the assets of all Americans, according to the authors. However, it is not clear whether expanding access is "achievable or affordable," they said.
"Until such reforms are implemented, millions of Americans are potentially one illness away from financial catastrophe," Cook and colleagues concluded.
