Medical Costs during COVID: Prime vs Non-prime Consumers


The costs of healthcare have long created hardship for prime, and non-prime Americans and the recent health crisis of the COVID-19 pandemic, the issues have only become worse.

Even before the pandemic, non-prime folks were at a healthcare disadvantage because they are at a higher likelihood of having to seek out coverage for medical, dental and vision insurance outside of their employer. Now as we continue to deal with the COVID-19 pandemic creating issues such as loss of job or income, it has increased that financial strain.

Prime Americans are not immune to these difficulties. Prime folks report that even before the pandemic they struggled with monthly healthcare premiums, and COVID has made it even more difficult to afford premiums.

The high cost of medical care is a common driving factor of people falling into non-prime status, with 1 in 4 non-prime Americans reporting that they were dealing with medical expenses at the time when their credit disruption caused them to fall out of prime status. The struggles accelerated by the pandemic could cause many Americans to slide into the non-prime population.


In May 2019, The Center published a comprehensive study on non-prime consumers and medical expenses. Conclusions from that study showed just how frequently medical issues metastasize into financial difficulty. Some of these findings include:

•More than half of all Americans have experienced some level of financial hardship in the face of medical bills in the prior five years

•Non-prime Americans were nearly twice as likely to experience a catastrophic disruption to their finances induced by medical bills

•Non-prime Americans are much more likely to report that they have average or below average health insurance

•The top three medical events that caused disruption to household finances were: inpatient treatment at a hospital, emergency room visit, and outpatient treatment (such as surgery where you are not admitted to a hospital) •Half of non-prime American said prescription costs were disruptive

•A third of non-prime Americans (and 12% of prime Americans) said that medical bill-induced financial hardship caused them to be unable to pay other bills

•Both prime and non-prime respondents spoke about needing to sacrifice to cover medical expense 

Medical expenses continue to be a central challenge for American households, one that can spiral out of control and leave their finances in a shambles.

Source of medical insurance

Nonprime Americans are much less likely to obtain their medical insurance through their (or their spouse’s) employer.

Dental insurance covered by employer

Dental is slightly less likely to be provided by an employer than medical insurance, but non-prime Americans are still much less likely to obtain it through their (or their spouse’s) employer.

Vision covered by employer

The trend continues with vision coverage. Just over 2 in 3 prime Americans receive vision coverage through their employer, while just over 2 in 5 non-prime Americans have that protection through an employer.

The strain of out-of-pocket healthcare costs

49% of Americans said that out-of-pocket healthcare costs cause at least “a little” strain on their finances. The pandemic has worsened that situation such that more than half of all Americans are feeling some strain.

The strain of health insurance premiums

The strain of health insurance premiums is one of the few categories where prime Americans consistently fare worse than non-prime. During the pandemic, more than half of prime Americans reported that health insurance puts “a little” or “a lot” of strain on their month-to-month finances.

COVID stimulus check spending

Prime Americans are more likely to report using at least part of their government stimulus check for medical costs. Both prime and non-prime Americans were more likely to spend on routine medical costs, like doctor’s co-pays, prescriptions, and well visits. 

Drivers of Becoming Non-prime

In May 2019, The Center for the New Middle Class conducted a study to determine what caused people to fall out of prime credit status. One of the central factors ended up being medical related expenses. These expenses often accompanied a loss in income (either because the person couldn’t work or because the person had to be the caregiver to a sick loved one).

This concomitant set of impacts – medical expense and loss in income – seems particularly pertinent during the pandemic. People are losing hours at work when they are infected, but also when they are quarantined for exposure. People may experience the effects even when they don’t experience the causes.

Medical costs drive a quarter of credit degradation

1 in 4 non-prime Americans report that they were dealing with medical expenses at the time when their credit disruption caused them to fall out of prime status.

The only factor that had a higher incidence rate is the loss of income (through job loss or decreased income).

In Their Own Words: Medical Related (26%)

I had some medical bills and I thought I had insurance at the time. I had gotten very sick and my insurance was not in effect and did not cover the bills and so they went to a collector and on my credit score. That’s why it affected my credit score and I am still paying on it today and it is still affecting me somewhat today.

I got cancer a few years back and trying to rebuild my score now, also changed my job, wife also lost her job during this time. Now I am working with my bank to fix my score.

Had a back injury at work and got behind on bills and it affected my credit report. My monthly income was cut in half and had medical bills on top of the bills I already had.

Got sick and had a lot of medical bills that I couldn’t afford. They were longer than 5 years ago I figured it wouldn’t affect my credit but it did. Trying to get my credit back up but it’s hard when I can’t get anyone to give me a LOC.

My husband had his own business and started using all our credit cards to cover his business expenses. Then we started having major medical bills that we weren’t able to pay. Trying to pay what I can, but extremely difficult since both of us are disabled and living on SS and disability it’s extremely difficult.

Drop in income accompanies medical expenses

Almost three-quarters (73%) of nonprime consumers mention both a medical reason and an income drop (due to job loss, temp disability, or new job), which severely complicates their ability to manage and cover medical expenses.

Just over a quarter of consumers cite only a medical-related issue as a factor.

Health issues can deplete savings

Concomitant to health issues often lead to a depletion of savings or rainy-day funds. This means that even when they successfully navigate the financial shoals of medical costs, their overall household finances are less resilient, leaving them exposed to future disruptions.

Studies methodologies

Non-prime Tracker

The tracking study was meant to understand how prime and non-prime consumers fared over time in different economic conditions.

Tracking two cohorts

•Non-prime consumers (self-declared credit score below 700)

•Prime consumers (self-declared credit score above 700)


•Balanced to US representative

•Recruited through third-party market research panels

•300 total interviews per wave (monthly or weekly) split evenly between prime and non-prime



•Duration: 10 minutes to complete

•Captured broad economic conditions, attitudes, and effects

Drivers of Non-prime

•Surveyed 319 non-prime Americans (self-declared credit score below 700)

•Survey instruments


•Duration: 10 minutes to complete

•Fielded May 2019

Our Focus

Elevate’s Center for the New Middle Class set out to understand the differences in attitudes, experiences and behavior between consumers with prime credit and those with non-prime credit.

“Non-prime Americans” represent the New Middle Class. These are Americans with a credit score below 700, meaning that their access to credit is limited or curtailed.

It is the Center’s objective to better understand their experiences, attitudes, and behavior.

About Elevate’s Center for the New Middle Class

Elevate’s Center for the New Middle Class conducts research, engages in dialogue, and builds cooperation to generate understanding of the behaviors, attitudes, and challenges of America’s growing “New Middle Class.”

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Article By:

Jonathan Walker

Jonathan Walker

The high cost of medical care is a common driving factor of people falling into non-prime status.