It’s probably no surprise that the nation’s poorest state has the nation’s highest rate of sub-prime credit scores. But the reason why may be worth considering.
A 2022 study by the Urban Institute showed that 30% of Mississippians had sub-prime credit scores, the highest percentage among all the states.
In comparison, Mississippi’s neighboring states had these sub-prime percentages – Alabama and Louisiana 29%, Arkansas 28%, and Tennessee 25%. The national average was 20%. Nationally as well as in Mississippi, the percentages of sub-prime credit scores for majority black communities was nearly double that of majority white communities.
“Why does the South have such ugly credit scores?” was the topic of a Washington Post analysis in February. Author Andrew Van Dam tracked the problem to medical debt. “Medical debt may not be the only force behind the South’s credit struggles, but it appears to be a key contributor,” he wrote. “So where did it all come from? And why is it concentrated in the South?”
His research found that “those in the South are substantially more likely to suffer from four or more chronic conditions. And poor health tends to go hand in hand with people having overdue medical debt and poor credit scores.”
Mississippi certainly fits that bill.
Top chronic conditions in Mississippi are high cholesterol, hypertension, arthritis, mental illness, diabetes, and cardiovascular disease. Forbes Advisor reported the state ranked in the bottom two positions for mortality rates for hypertension, Alzheimer's disease, diabetes, and kidney disease.
Van Dam also cited research that showed southern states that did not expand Medicaid suffered higher levels of medical debt than those that did. Most of those states are in the South.
Research shows that most chronic health conditions could be prevented by regular health check-ups. Yet many fail to get that care. Barriers include cost, not having a primary care provider, living too far from providers, and lack of awareness about recommended preventive services, according to the U.S. Office of Disease Prevention and Health Promotion.
All of those barriers apply to Mississippi which has a critical shortage of physicians and a large population of uninsured and underinsured persons. When chronic conditions worsen, their care becomes more expensive. Indeed, many of these individuals show up in hospital emergency rooms which have far higher costs than preventive care.
The medical debt problem and sub-prime credit scores in Mississippi will only be compounded by rising credit card rates which jumped from 14.6% in February 2022 to 23.4% in February 2023. Forbes Advisor ranked Mississippi 6th among states struggling with high credit card debt.
Hmmm.
Wonder how many of our bottom rankings could be prevented?
“Sensible people will see trouble coming and avoid it” – Proverbs 27:12.
