60 Percent Of Bankruptcies Associated With Medical Bills
Researchers reported on Thursday that medical bills are involved in more than 60 percent of U.S. personal bankruptcies, an increase of 50 percent in just six years, Reuters reported.
A team at Harvard Law School, Harvard Medical School and Ohio University reported in the American Journal of Medicine that more than 75 percent of these bankrupt families had health insurance but still were overwhelmed by their medical debts.
The researchers wrote: "Using a conservative definition, 62.1 percent of all bankruptcies in 2007 were medical; 92 percent of these medical debtors had medical debts over $5,000, or 10 percent of pretax family income."
The report went on to indicate that most medical debtors were well-educated, owned homes and had middle-class occupations.
The share of bankruptcies that could be blamed on medical problems rose by 50 percent from 2001 to 2007, it said.
Harvard’s Dr. David Himmelstein, an advocate for a single-payer health insurance program for the United States, said unless you’re a billionaire, almost any family is just one serious illness away from bankruptcy.
He warned that health insurance offers little protection for middle-class Americans.
The United States healthcare system, which is now a patchwork of public programs such as Medicare and employer-sponsored health insurance that leaves 15 percent of the population (46 million people) with no coverage, is currently being overhauled.
President Barack Obama has stated that soaring healthcare costs are hurting the economy and forcing businesses to drop medical insurance for many of the 170 million workers who get health insurance through an employer.
The report showed that a quarter of firms nationally cancel coverage immediately when an employee suffers a disabling illness and that another quarter do so within a year.
Addressing Congress on Wednesday, President Obama said he was open to making mandatory health insurance part of the overhaul but only with exemptions for the poor and for small businesses.
However, neither Congress nor Obama are currently considering the kind of single-payer plan advocated by Himmelstein and his colleague Dr. Steffie Woolhandler.
Woolhandler said the U.S. must rethink health reform, because just covering the uninsured isn’t enough.
"Only single-payer national health insurance can make universal, comprehensive coverage affordable by saving the hundreds of billions we now waste on insurance overhead and bureaucracy," he added.
Some 2,134 random families who filed for bankruptcy between January and April in 2007 were surveyed before the current recession began.
The researchers used public bankruptcy court records and survey 1,032 respondents by telephone to compile data for the study.
The study reported that while only 29 percent directly blamed medical bills for their bankruptcy, 62 percent had medical bills that totaled more than 10 percent of family income, said an illness was responsible, had lost income due to illness or some other medical factor.
The researchers wrote: "Among common diagnoses, nonstroke neurologic illnesses such as multiple sclerosis were associated with the highest out-of-pocket expenditures (mean $34,167), followed by diabetes ($26,971), injuries ($25,096), stroke ($23,380), mental illnesses ($23,178), and heart disease ($21,955)."
“Families who file medical bankruptcies are overwhelmingly hard-working, middle-class families who have played by the rules of our economic system, and they deserve nothing less than affordable health care,” said Dr. Deborah Thorne, associate professor of sociology at Ohio University and co-author of the study.
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