Type 2 Diabetes Linked to Higher Risk of Debt, Bankruptcy, Foreclosure

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People with Type 2 diabetes are significantly more likely to face financial hardships than those without the condition, according to research published in JAMA Network Open. These financial problems included having low credit scores, medical and nonmedical debt in collections, delinquent bills, and even bankruptcy or foreclosure.

The link between financial struggles and diabetes has been well documented, with previous surveys reporting 20% to 25% of adult patients with the condition having rationed insulin and 30% rationing their diabetes supplies. This is particularly troubling, as not taking medications as prescribed is associated with delayed medical care, hospitalizations and even death.

“Finances are a major challenge for many of the patients I treat, so much so that we are asking them questions around what we call the social determinants of health in our patient visits,” stated co-author Joshua J. Joseph, M.D., M.P.H., an associate professor of endocrinology, diabetes and metabolism at Ohio State University.

The team of investigators looked at the financial impact of Type 2 diabetes on over 166,000 adult patients at a Midwestern medical center using electronic health records collected from October 2017 to December 2021.

The mean age of patients was 52 years, 55% of patients were female, and most (73.2%) were White. Of the 166,285 people included in the analysis, 69,371 (42%) had Type 2 diabetes. More than half of the participants (about 51%) had no earned income, and about one-third (33%) were covered by Medicare.

When comparing patients with and without Type 2 diabetes, those with diabetes were much more likely to experience serious financial challenges. This included higher rates of the following:

• Poor credit scores (60% vs 46%)
• Medical debt in collections (37% vs 24%)
• Nonmedical debt in collections (38% vs 28%)
• Late or delinquent payments (23% vs 16%)
• Debt that was charged off (15% vs 10%)
• Bankruptcy filings (2.1% vs 1.4%)
• Home foreclosures (0.5% vs 0.3%)

People with diabetes also had more financial problems overall (1.9 issues versus 1.2) and lower average credit scores (619 vs 664). On top of that, they owed more in collections, with nonmedical debt averaging around $1,875 versus $1,361, and delinquent debt averaging over $11,000 versus $7,600.

“These findings are important because financial hardships have been associated with mental health problems and higher mortality in the wider financial toxicity literature,” wrote lead investigator Matthew Pesavento, Ph.D., an empirical health researcher at The Ohio State University, and colleagues.

People who were especially vulnerable included patients who were younger than 65, women, people of Black or Hispanic backgrounds, those on Medicaid, or individuals without earned income. On average, patients with Type 2 diabetes had more debt and lower credit scores than those without it.

Investigators mentioned some limitations including that the study was based on patients from just one medical center in the Midwest, so the findings may not apply to everyone in the U.S. It included a much higher percentage of people with Type 2 diabetes (42%) compared with the national average (about 11%), and fewer Hispanic participants than you’d normally see in the U.S. population with diabetes.

The study also didn’t capture full income data — only wages were considered. This means it didn’t account for Social Security, retirement funds or other types of income, which are especially important for older adults.

Medication data was incomplete too, since it only included prescriptions from that one hospital system and didn’t track which prescriptions were actually filled. Because of these limits, the financial impact of diabetes might be even greater than what the study found.