Young Black Americans report that medical debt is impacting their financial health and nearly one in five Black millennials (19%) report that paying for health care is their biggest retirement stressor, according to a recent Nationwide Retirement Institute® survey.
Black millennials report carrying substantially more medical debt compared to other generations. Of those respondents who could estimate their medical debt, Black millennials self-reported they have on average $11,469 in medical debt. That’s four times higher than Black Gen Xers ($2,818) and ten times more than Black baby boomers ($1,111).
The outsized medical debt carried by Black millennials is already impacting their financial outlook and decision making. Fifty-seven percent say health care expenses have impacted their financial health, compared to 40% of Black Gen Xers and 18% of Black baby boomers. Digging deeper into the repercussions:
- More than a third of Black millennials (35%) have skipped or delayed getting care to save on medical expenses, compared to just 19% of Black Gen Xers and 13% of Black baby boomers.
- More than half of Black millennials (57%) say they have been negatively impacted by financial stress, compared to 46% of Black Gen Xers and 27% of Black baby boomers.
- Of the Black millennials negatively impacted by financial stress, 40% say it has impacted their relationships and 20% say it impacted their overall health.
“While each person’s path to financial wellness and wealth will be unique, our latest data clearly demonstrates that young Black Americans collectively face a challenge to success posed by the cost of health care,” said Kristi Rodriguez, senior vice president of Nationwide Retirement Institute®. “For financial professionals, it’s now imperative that you understand the impact of health care costs on a long-term financial plan and know which solutions to put into place to ensure client success and confidence.”
According to the Centers for Disease Control, Black Americans are disproportionately impacted by chronic conditions that drive up their health care costs, and that has only escalated as a result of the pandemic. Black millennials also say they have spent on average $6,145 on health care costs and personal protective equipment (PPE) during the pandemic. That’s ten times more than Black Gen Xers ($613) and way more than Black baby boomers ($269).
One in five Black millennials (21%) do not have health insurance and those that do are twice as likely to be self-employed and without access to a group plan. By comparison, 17% of Black Gen Xers do not have health insurance and only 2% of Black baby boomers lack health insurance.
How financial professionals can support
The good news is that 40% of Black millennials have a financial professional – a substantially higher proportion than older generations (Black Gen Xers 27%, Black baby boomers 19%). And of those millennials that have a financial professional, 77% say they talk to him or her about how their health and wellbeing impacts their wealth.
“Black millennials are right to worry about health care costs in retirement – especially if they have a chronic condition,” Rodriguez said. “By incorporating health care into financial planning conversations, financial professionals can help clients create a more secure and comfortable financial future.”