Major illness and financial disaster: how close is the connection?

an elusive goal, but one that continues to be pursued. Discussions tend to focus on the health implications of lack of coverage, yet the economic consequences are equally significant. For some, lack of health insurance can be an inconvenience; for others, it can mean financial devastation. In an HCFO-funded study, David Dranove, Ph.D., Northwestern University, and colleagues compared the financial experience of insured and uninsured individuals who suffer a major illness. The researchers focused on the near-elderly age 51 to 64, a portion of the population that is typically accumulating assets to fund retirement. Dranove explains that the study's objective was to " better understand the indirect effects of lack of insurance on individuals' overall financial well-being. " Analysis The research team calculated its estimates by using panel data from the Health and Retirement Study (HRS), a longitudinal survey that samples groups of non-institution-alized Americans born between 1931 and 1941 and their spouses. Surveyed every two years between 1992 and 2006, participants responded to questions about their household finances, health status, labor force participation , and retirement plans. The researchers engaged in an intricate matching process across a number of measures, including marital status, assets, income, pre-illness homeownership, existing medical condition(s), type of new illness, number of other new diagnoses, and previous medical conditions for the newly ill. The researchers ultimately matched a set of uninsured households experiencing a new illness with three comparison groups: healthy/ uninsured households, newly ill/insured households, and healthy insured households. Included in the study sample were 454 uninsured households and 3,175 insured households in which one member of the household under age 65 suffered a new illness in the past year. The researchers key findings • The uninsured, near-elderly who suffer a new, major illness lose between one-third and one-half of their assets to medical expenses.