Report Shows Health and Financial Stability are Linked

July 17, 2018

Recent research shows that unmet basic needs – problems such as not having enough food, living in a dilapidated or unheated apartment, or being unemployed and not having the means to support one’s family – lead to poor health. Nonhealth factors account for as much as 50 percent of poor health outcomes in the U.S. 

ALICE, an acronym for Asset Limited, Income Constrained, Employed, represents households that earn more than the Federal Poverty Level but less than the basic cost of living in their area. ALICE lives paycheck to paycheck, just one car accident or medical bill away from crisis.

How do people support their families on low-wage incomes? They make difficult choices about what to pay for and what to forgo. These choices are daunting, and they have both immediate and long-term consequences for low-income households and their communities. 

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Health and financial stability are linked. 

Poor health can be both a consequence and a cause of financial instability. Trying to maintain a household with a low income and few assets can lead to mental stress and poor health. And being in poor health can increase expenses, often causing a downward spiral that forces an ALICE family to fall into poverty. 

Health risks for ALICE: 

  • Poorer overall health, including suffering preventable illness due to lack of regular care

  • Forgo healthy choices for cheaper options 

  • Financial penalty for not having insurance

  • Increased family caregiving, reduced time for work and other activities

ALICE and poverty-level families face a range of circumstances that make it difficult for them to achieve and maintain good health. These families are more likely to become ill because their basic needs, such as living in a safe environment or having enough food, are not being met. Because they often cannot afford health care or health insurance, they also have more difficulty recovering from illnesses.

Poor living conditions. With lower incomes, ALICE families often live in housing and neighborhoods that contribute to poor health.

Toxic stress. State and national research on “toxic stress” has found that living in chronically
stressful situations, such as in a dangerous neighborhood or in a family that struggles to afford daily food, damages neurological functioning, which can impede a person’s ability to perform well in school, at work, and in daily life. This is especially true for young children, whose brains may never develop the executive functioning skills needed to succeed in each of these areas.

Poor access to health care. Low-income families have increased health needs, but it is harder for them to afford and obtain health care than it is for families with higher incomes. Despite both Medicaid and the 2014 roll out of the Affordable Care Act, the costs of health insurance and health care remain out of reach for many ALICE and poverty-level families. In addition, these families may experience access problems including language and cultural barriers, transportation challenges, and difficulty in making work and child care arrangements to accommodate health care appointments. 

The interconnections of health and basic needs highlight the importance not only of basic health services and broad insurance coverage, but also of healthy communities and lifestyles. This includes affordable access to fresh produce and other healthy foods; neighborhoods planned to include parks, playgrounds, and other activity spaces; quality education options from pre-K through college; and safe, affordable housing. 

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What is United Way doing to help ALICE?

The key is prevention and intervention – finding ways to keep people from falling off the edge, either into ALICE or from ALICE into poverty

  1. We are raising awareness about ALICE and continuing the dialogue among community leaders about how, together, we can provide ALICE an opportunity to succeed.

  2. We are breaking stereotypes and educating that ALICE not only exists here in Michigan and that ALICE's struggles affect the economic well-being of all residents.

  3. We are supporting local programs that offer short-, medium-, and long-term solutions for ALICE.