Medical debt means Southerners have worse credit

The Washington Post notes that residents of Southern states generally have lower credit scores than Americans in other regions.

You might think that the racial wealth gap plays a role. After all, Black Americans make up about 20% of southern residents. But that's not it.

You might think income or poverty are factors. While people in poverty do have worse credit, the report discussed here found that Southerners have lower credit scores across income levels.

Even some of the South’s biggest, most dynamic cities — think Atlanta or Dallas — have the same below-average credit scores as their more rural Southern neighbors. Within every income bracket, the typical Southerner has a lower credit score than someone who lives in the Northeast, Midwest or West.

What the south also has a lot of is medical debt.

Of the 100 counties with the highest share of adults struggling to pay their medical debt, 92 are in the South, and the other eight are in neighboring Oklahoma and Missouri, according to credit data from the Urban Institute. (On the other side, 82 of the 100 counties with the least pervasive medical-debt problems are in the Midwest, with 45 in Minnesota alone.)

As it turns out, medical debt became more concentrated in lower-income communities in states that did not expand Medicaid after key provisions of the Affordable Care Act took effect in 2014.

Policy — or Southern states’ refusal to adopt expansion of Medicaid as a policy — may explain why southerners have higher levels of medical debt that they cannot pay.