Gen Z and Millenials are skipping rent because of debt, and their credit scores are suffering
A HealthCare.com poll of more than 2,800 adults found that the younger generations are being hit hard by medical debt.
Medical debt is resulting in 25% of Gen Z and 23% of Millennials skipping rent or mortgage payments because of their debt obligations. This compares to only 12% of Baby Boomers. These debt issues will be long-term, because 52% of Millennials say medical debt is also hurting their credit score, with 48% of Gen X and 42% of Boomers saying the same thing.
A major source of the issue for Gen Z is inadequate insurance. For those that had health insurance, 68% said their plan did not cover the service they received that resulted in the debt. Boomers reported the same issue only 36% of the time.
Across all age groups, those with the lowest incomes are being sent to collections most often. More than half of Americans who make less than $25,000 annually have had their medical debt turned over to debt collectors. Even 41% of those making between $75,000 and $99,999 saw their medical debts sent to collections.
Different generations have different plans for repaying the debts. Baby Boomers often (22%) plan on dipping into retirement savings, while 22% of Gen Z plans on turning to crowdfunding to pay their bills.
All generations are skipping purchases because of medical debt, with travel being a major cut – 53% of Gen Z, 44% of Gen X, and 40% of Baby Boomers indicated they would not purchase travel to help cover their medical debts.
For Millennials with medical debt, home improvement (43%) comes in at the top of the list.
Across generations, majorities are worried that their medical debt will affect their ability to save, with Millennials being the most likely to say they are somewhat to extremely concerned (67%).
Men are more likely than women to turn to credit cards (27% vs 19%), retirement savings (15% vs 11%), or crowdfunding (13% vs 8%) to pay their medical debt. They’re also more likely to try and get their debt reduced: 55% of men and 45% of women with medical debt say they’ve tried to negotiate their debt down.