The legacy of more than two centuries of inequality that haunts Virginia and other Southern states affects us more than we may realize.
A good example of how systemic inequalities make it tough to build wealth and make life better for everyone can be found in a deep dive that the Washington Post recently took into data about credit scores.
Intrigued by the evidence that low credit scores are concentrated in the South — not only in rural and inner-city areas, but everywhere — the reporters tried to figure out why.
They found that race plays a role, but is not in itself the determining factor. Yes, the country’s Black population is concentrated in the South, and many Black people struggle with inequalities that have been built into our society through decades of slavery, Jim Crow laws, segregation and discriminatory practices.
But the South’s low credit scores weren’t confined to areas with a high concentration of Black residents, and areas outside the South with large Black populations had higher scores than similar areas here. Even wealthy areas in the South had lower credit scores than elsewhere.
The No. 1 answer to why the South suffers from low credit scores turns out to be medical debt. The South has a lot more unpaid medical bills than other regions.
Why is that? For starters, the South has more than our share of unhealthy people. Much of that poor health is a result of systemic inequalities that lead to poverty and related problems such as food “deserts” where inner-city people have limited access to healthy foods.
Also, young people in majority Black and Hispanic neighborhoods tend to have lower credit scores than those in majority white areas. A major reason for that disparity is that many minority young people start out behind financially because their parents have fewer resources — often because of decades of discriminatory practices such as red-lining that denied them loans to buy real estate.
To get a start in life, these young people go into debt; high-interest loans are often all they can find. If they fall behind, their credit scores get even worse. And so it goes.
Another reason for more medical debt — and lower credit scores — is that many Southern states did not expand Medicaid after the Affordable Care Act made that possible in 2014.
Fortunately, Virginia did vote to expand Medicaid in 2018, a move that covered more than half a million residents. When the expansion took effect in 2019, the number of uninsured Virginians decreased immediately. When COVID hit in 2020, many of those who lost jobs qualified for Medicaid.
As a result, the commonwealth has saved millions of dollars. The savings come in part from the federal government’s picking up a substantially larger share of the cost of expanded Medicaid.
What’s more, the uninsured tend to delay medical care until a condition worsens, making treatment more expensive.
If Virginia had not expanded Medicaid, odds are medical debt and low credit scores here would be worse than they are.
Neighboring North Carolina found that out the hard way. The legislature there voted overwhelmingly this month to expand Medicaid after Republicans had opposed it for years. Republican leaders who reversed their position said they did so largely because of finances.
Many Republicans in Virginia initially opposed Medicaid expansion. During the Republican primary two years ago, Gov. Glenn Youngkin called Medicaid expansion “a very sad thing.”
In reality, the expansion has been anything but sad, both for the state and for those who are now covered. A recent study showed that recipients say Medicaid coverage decreased their medical debt and improved their ability to pay for such things as food and housing. The effects ripple through the economy, helping people to build wealth and making communities stronger.
A chronic condition, sudden illness or unexpected injury shouldn’t condemn someone to financial ruin. Virginia can, and should, find a way to address this burden in a workable, bipartisan way, recognizing that doing so will bolster the commonwealth economy.
