Better Life Lab

When a Surprise Medical Bill Hits, It’s Women Who Absorb Most of the Shock

Photo illustration by Lisa Larson-Walker. Photo by Thinkstock.

Welcome to Better Life Lab, a pop-up blog about the future of work, gender, and social policy running from Mother’s Day to Father’s Day.

One of the strangest aspects of President Trump’s first 100 days was the rise and resurgence of the American Health Care Act, the bill replacing the Affordable Care Act that passed the House of Representatives on May 4. Inherent in the debate on how the bill’s changes would disproportionately affect women’s health care are concerns about its potential impact on women’s pay and financial health. New data from the JPMorgan Chase Institute underscores those concerns: Tracking spending data for 210,000 Chase customers between 2013 and 2015, the institute examined what happens to their customers in the face of large medical expenses; e.g., that trip to the emergency room when little Carla breaks her arm on the playground.

Although most primary account holders are men, Chase’s female primary account holders—the women who make the decision to open a bank account or credit card—were in a weaker financial position than men prior to and following extraordinary medical payments. Data from Chase customers confirmed that since average incomes and wealth are 20 percent lower for women than for men, women are disproportionately impacted by financial shocks and don’t recover as quickly as men do. The data also link financial and physical health in a new way: Chase customers timed medical payments around when they had access to large influxes of cash, usually during tax season, suggesting people either wait until they have cash to go to the doctor or sit on a bill until tax season.

In other words, the stress of paying for Carla’s playground injury has a domino effect, making it harder for families to pay for other needs and causing a drag on their overall health and security. Survey research from Pew Charitable Trusts similarly found that “financial shocks continue to be a frequent and burdensome challenge for households of all types.” If people lose access to health insurance, if essential benefits change, or if premiums go up, as projected by the original Congressional Budget Office scoring of the American Health Care Act, their financial and physical health will suffer. (A new CBO score for the revised AHCA bill is forthcoming later this month.) In 2016, the Federal Reserve found that 46 percent of individuals would have to borrow money to cover an emergency expense over $400. That’s a lot less than the $7,150 that individuals or $14,300 that families may pay as the federally allowed out-of-pocket maximum under the Affordable Care Act. Women are the ones who will feel those changes most acutely.

For Jade Shipman, director of policy and innovation at online savings tool Earn, this is no surprise. Earn’s clients—80 percent of whom are low-income women—report “a sense of tenuous stability. Things may be going okay right now, but there’s a tangible fear that they’re just one emergency away from being in financial trouble.” Saving for a medical emergency is one of the top goals of Earn’s clients, since the impact of a medical emergency is layered: The cost of medical care itself is compounded by whether the person is permitted to take time off from work and can afford to do so.

It’d be nice if we could stop there and offer a swift warning to policymakers that any health care policy needs to take these differentiated impacts into account. But digging deeper into the data itself raises big questions. JPMorgan Chase draws these conclusions about gender gaps for us since the data is proprietary and since they can’t legally ask their customers their gender or marital status. Part of the reason for that is until recently, women were historically denied access to property ownership and credit, except as tied to a male spouse.

Eventually, the Equal Credit Opportunity Act (1974) and Dodd–Frank Act (2010) legally barred financial institutions such as JPMorgan Chase from asking clients about sex or marital status (among other things) outside of mortgage lending. Today, financial institutions use algorithms to estimate the gender (as well as race) of their clients. Using data from the census, financial institutions calculate the likelihood that names are attached to a gender.

If we take this data to be accurate, however, it is also a public acknowledgement by JPMorgan Chase that gender matters. According to Fiona Greig, co-author of “The Gender Gap in Financial Outcomes” and director of consumer research at the JPMorgan Chase Institute, “As we think about the financial health of families and the economy more broadly, it’s critical to understand how the gender gap in wages translates into gender gaps in other financial outcomes and resilience to economic shocks.”

The Affordable Care Act went a long way to help shore up families against financial shocks by limiting medical costs, though not far enough. As of press time, the Senate working group considering revisions to the American Health Care Act has no women in its ranks. That seems like a decently depressing metaphor for what the raw deal women often get when it comes to their health and well-being.