Interest Rate on Poverty

The other day I was thinking about the long term costs of poverty. An example is dental care. Dental care is generally not covered for adults on Medicaid, though it is covered for children.  However, dental health is just as important as other forms of health. Not only can poor dental health be painful and annoying, it can seriously affect your overall health.  Someone who can’t afford to get a cavity fixed this year, probably can’t afford to get a root canal next year. And yet, the price of a root canal from a cavity is enormous. Using FairHealth Consumer and my home zip code, I received the following numbers for treatment on a molar:

Cavity = 225 Root Canal =1,862

I use cavity and root canal because there’s a direct relationship between the two, instead of say, cleaning and root canals. A root canal is treatment for a cavity that penetrated the nerve of a tooth. A cleaning is cheaper, but there’s not substantial evidence that shows it’s actually effective at reducing cavities. There’s also not a hard length of time it takes for a cavity to reach the root of a tooth. To be generous, I’ll use 2 years.

 1862 = 225(1 + 2r)
r = 363.77% annual

In this scenario, the cost of poverty charged a simple annual interest rate of 363.77%. In comparison, credit cards hover around 15% APR.

This anecdote is personal. A few years ago, while relaxing at my college dorm, I experienced intense pain on a back molar. I was in such severe discomfort that I went to the hospital and they numbed my mouth until I could see an emergency dentist the next morning. The dentist charged about $2,500 for a root canal, crown, and the accompanying works. I didn’t have that money and neither did my parents. Back home, I would have been using Medicaid and received dental treatment for free. I thought about flying home and missing school, but I would have missed a final exam and thrown away a whole class’s worth of credit. So I opened a new credit card and charged the cost of the root canal.  Maybe if I had paid out of pocket for a dentist earlier, I could have avoided the interest rate of poverty.

This is one of the reasons the poor stay poor. I’m very fortunate to attend a selective college that has grants to help cover medical costs. With their help, my root canal did not put me in a spiral of debt. It is one of the privileges of attending a good college– but I’ll talk about diversity in higher ed another day.