This new study compared the long term financial repercussions of pre-existing chronic health problems with those caused by the sudden onset of a new health problem late in life. Lee and Kim focused on five common and serious health conditions: diabetes, cancer, lung disease, heart condition, and stroke.
They examined how the wealth of more than 5,500 AHEAD participants changed between 1995 and 2002. All were aged 70 or older at the start of the study.
When participants developed a new and serious health condition, the researchers categorized those incidents as a health shock.
The later in life that health shocks occurred, the more they diminished a persons wealth, the researchers found. In 1998, participants who had recently experienced a health shock lost an average of 5.5 percent of their overall wealth as a result. But when they were two years older, the average loss for a health shock was 8.7 percent of wealth.
When they were four years older (in 2002), it was 9.5 percent -- 40 percent more than when the participants were first studied in 1998.
If you have a chronic health condition, it diminishes your wealth throughout your life. And if you get a health shock, it diminishes your wealth even more, Lee said. Though over time the costs associated with that shock may decrease, that illness will still deflate your wealth continuously thereafter.
To Lee, this research demonstrates how costly healthcare is to Americans, even if they have Medicare coverage.
Medicare typically pays a little over half of someones medical bills, and seniors -- most of whom are living on a fixed income -- are forced to make up the difference by dipping into their savings. Add to that the fact that Americans are living longer, and the cost of healthcare keeps increasing.
Even if seniors can recover physically from a health shock, they cant recover financially.<
|Contact: Jinkook Lee|
Ohio State University