Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 80 Page 81 Page 82 Page 83 Page 84 Page 85 Page 86 Page 87 Page 88 Page 89 Page 90 Page 91 Page 92 Page 93 Page 94 Page 95 Page 96 Page 97 Page 98 Page 99 Page 100 Page 101 Page 102 Page 103 Page 104 Page 105 Page 106 Page 107 Page 108I NCOME & WEALT H 70 The joint health status of husbands and wives also is closely correlated with net worth, as illustrated by data in Table 3-3 from the initial (1992) wave of the HRS. With a few excep- tions, the column and row amounts decline steadily. The joint relationship can be seen by focusing on the diagonal sequence of cells from the upper left of Table 3-3 (both part- ners reporting excellent health) to the lower right (both partners reporting poor health). As shown, average household net worth was more than $400,000 when both partners were in excellent health, compared with $31,000 when both partners were in poor health. The reasons for this relationship are numerous and inter- twined. How wealth and health may influence each other is a topic of ongoing research using new waves of HRS information. Wealth is also related to the risk of death. One study linking 1992 HRS data to HRS participant deaths between 1992 and 1998 found that greater wealth reduces the risk of death even after controlling for other socioeco- nomic and demographic factors (Bond Huie et al. 2003). FIG. 3-11 Impact of new health problem in 1992 on total wealth and out-of-pocket Medical expenses: 1992-1996 (People ages 51-60 in 1992) Source: Smith 1999. $-20,000 $-15,000 $-10,000 $-5,000 $0 $5,000 Mild onset Severe onset Wealth Out-of-Pocket Medical Expenses Unexpected Health Events and Wealth Unexpected health events can greatly increase medical expenses while reducing household wealth (Smith 1999). Among people ages 51 to 60 in the original (1992) HRS cohort who experienced a mild health problem in 1992, total medical expenses between 1992 and 1996 averaged $2,500, although out-of-pocket medical expenses were less—an average of $635 (Figure 3-11). However, these individuals’ wealth declined by more than $3,600 between 1992 and 1996. For those experiencing the onset of a severe health condition in 1992, total medical expens- es between 1992 and 1996 were much more substantial, averaging almost $29,000. Less than one-tenth of these expenses—an average of $2,266—was paid out-of-pocket. During the same time period, the wealth of the same group declined by almost $17,000—nearly five times the decline for mild health onsets. The researcher estimated that the $17,000 wealth reduction was approximately 7 percent of household wealth, but suggested that the eventu- al impact on wealth may be even greater because health problems can persist over time. An analysis of gender differences in health and wealth, using HRS data for 1992 through 1998, concluded that unexpected health events may have a greater financial impact for women than for men because women are less likely than men to have public or private disability insurance (Ward-Batts 2001). This study also considered the gender-specific impact of certain disease TBL. 3-3 Mean Household net worth, by health of husband and wife: 1992 Wife’s Health Excellent Very Good Good Fair Poor Husband’s Health Excellent $416,809 $420,724 $301,972 $202,431 $155,842 Very Good $360,354 $375,032 $242,435 $158,112 $84,907 Good $341,576 $243,494 $195,821 $154,110 $86,214 Fair $237,077 $224,258 $108,618 $193,806 $160,248 Poor $171,877 $117,314 $133,053 $95,302 $30,995 Source: Willis 1999.