Type 2 Diabetes Linked to Poor Credit, Financial Distress

Adults with type 2 diabetes (T2D) are significantly more likely to experience adverse financial outcomes, including below-prime credit scores, debt in collections, and bankruptcy, compared with those without diabetes, according to new research.1 The study, which linked electronic health records (EHRs) with credit data, also identified greater financial vulnerability among younger patients, women, Black and Hispanic individuals, and those without earned income.

This large economic evaluation study is published in JAMA Network Open.

A new study finds adults with type 2 diabetes face higher risks of medical debt, low credit scores, and bankruptcy—especially in vulnerable groups. | Image credit: wirojsid - stock.adobe.com

“The data show that patients with diabetes who had debt in collections and delinquent debt had significantly higher dollar amounts of debt than those without diabetes, as well as significantly lower credit scores,” wrote the researchers of the study. “Patients with diabetes were more likely to experience 2 of the 7 financial outcomes compared with 1.2 outcomes of patients without diabetes.”

A recent study published in The American Journal of Managed Care® revealed the significant financial burden of insulin costs on commercially insured patients, especially those with high-deductible health plans (HDHP/SO) and those living in low-income areas.2 From 2008 to 2021, insulin out-of-pocket costs rose notably, with HDHP/SO members facing higher expenses and reduced insulin use compared to others. Lower-income patients consistently filled fewer insulin prescriptions, highlighting disparities in access.

In the current JAMA Network Open study, the researchers analyzed EHRs from adults aged 18 years or older who had at least 1 medical encounter at a primary care medical center in Ohio between October 1, 2017, and December 31, 2021.1 EHRs were included if they contained a glycated hemoglobin A1c (HbA1c) value, a diagnostic code for T2D, or a prescription for antidiabetic medications. These records were then linked to individual credit reports to assess financial health indicators.

The primary outcome was the adjusted probability of experiencing adverse financial outcomes, including below-prime credit scores, medical and nonmedical debt in collections, delinquent debt, charge-offs, bankruptcy filings, and foreclosures. Analyses were adjusted for demographic and socioeconomic factors, including age, sex, race, ethnicity, earned income, insurance type, observation period, and calendar quarter.

The study included 166,285 adults (mean [SD] age, 52.3 [15.3] years), of whom 41.7% had T2D. Patients with diabetes had significantly higher rates of adverse financial outcomes compared to those without.

The adjusted probability of experiencing any adverse financial outcome was 64.5% (95% CI, 64.1%-64.9%) for those with diabetes vs. 49.9% (95% CI, 49.6%-50.2%) for those without. Below-prime credit scores were more common in patients with diabetes (59.7%; 95% CI, 59.3%-60.1%) than in those without (45.9%; 95% CI, 45.6%-46.2%). Medical debt in collections affected 36.9% (95% CI, 36.5%-37.3%) of people with diabetes vs. 23.9% (95% CI, 23.7%-24.2%) without, while nonmedical collections were 38.4% (95% CI, 38.0%-38.8%) vs. 27.7% (95% CI, 27.5%-28.0%).

Additionally, delinquent debt was reported by 23.3% (95% CI, 22.9%-23.7%) of those with diabetes and 15.6% (95% CI, 15.4%-15.8%) of those without. The rates of debt charge-offs, bankruptcy, and foreclosures were also higher in the diabetes group.

Patients with diabetes had a lower average credit score (618.7 [0.4]) compared with those without (664.2 [0.5]). They also had greater maximum nonmedical debt in collections ($1875; 95% CI, $1834–$1916 vs. $1361; 95% CI, $1333–$1389) and delinquent debt ($11,387; 95% CI, $10,796–$11,977 vs. $7630; 95% CI, $7305–$7955). Disparities were most pronounced among patients who were Black, Hispanic, female, younger than 65, on Medicaid, or had no earned income.

However, the researchers noted several limitations. First, the study was limited to a single Midwestern medical center with a higher-than-average share of patients with T2D and underrepresentation of Hispanic patients. The comparison group may have been biased, as it included only patients with HbA1c tests. Income data excluded nonwage sources, limiting insights into financial outcomes for retirees. Prescription data were incomplete, capturing only medications from the study site, and lacked details on adherence, costs, and comorbidities.

Despite these limitations, the researchers believe the study highlights a strong association between T2D and adverse financial outcomes, including lower credit scores, higher debt burdens, and increased rates of bankruptcy and foreclosure.

“This research may inform policymakers about evolving risks to the economic security of financially vulnerable individuals with diabetes,” wrote the researchers. “This information also may inform holistic treatment approaches that might ease the financial vulnerability of individuals with diabetes.”

References

1. Pesavento M, Loibl C, Moulton S, et al. Type 2 diabetes and financial outcomes. JAMA Netw Open. 2025;8(7):e2523453. doi:10.1001/jamanetworkopen.2025.23453

2. Tremblay ES, Argetsinger S, Zhang F, et al. Trends in insulin out-of-pocket costs and use disparities, 2008-2021. Am J Manag Care. 2025;31(8):In Press