Health Care and Bankruptcy Go Hand in Handby Tim Manni
Until recently, health care and bankruptcy never seemingly went hand in hand. Nearly 30 years ago, only 8% of families who filed bankruptcy cited serious medical problems as the reason. The findings from a 2007 study found that number has risen to 62%. What may be more shocking is that the study claims 78% of those filers had medical insurance at the start of their illness:
This newest, nationwide study, conducted before the start of the current recession by Drs. David Himmelstein and Steffie Woolhandler of Harvard Medical School, Elizabeth Warren of Harvard Law School, and Deborah Thorne, a sociology professor at Ohio University, found that the filers were for the most part solidly middle class before medical disaster hit. Two-thirds owned their home and three-fifths had gone to college.
Again today President Obama reiterated his call for health care reform, calling out his opposition and praising his supporters. Last month the president addressed a letter to Democratic Senate leaders which stated that “Soaring health-care costs make our current course unsustainable. It is unsustainable for our families, whose spiraling premiums and out-of-pocket expenses are pushing them into bankruptcy and forcing them to go without the checkups and prescriptions they need.”
But are soaring health care costs the only cause of our “unsustainable” health care system? Are “spiraling premiums” behind the increased bankruptcies? The study says not entirely (emphasis added):
[The study] found that a number of medical factors contributed to a family’s financial disaster. More than 90% of medically related bankruptcies were caused by high medical bills directly or medical costs that were so high the family was forced to mortgage their home. The remaining 8% went bankrupt because a medical problem caused them to lose income.
Dr. Woolhandler, an advocate of a single-payer health-care system, said lawmakers in Washington should reconsider health-care reform in light of the study. “Covering the uninsured isn’t enough,” she said. “Reform also needs to help families who already have insurance by upgrading their coverage and assuring that they never lose it.“
There are several issues regarding President Obama’s health care reform that begged to be discussed in this blog, but for today we’ll settle on just one: if the president’s health care reform merely focuses on providing health care to the 50 million uninsured Americans, he will have missed his opportunity to fix an equally debilitating problem.
The study says that of the families which had insurance but lost it during their illness, their medical bills averaged $22,658:
“For middle-class Americans, health insurance offers little protection. Most of us have policies with so many loopholes, co-payments, and deductibles that illness can put you in the poorhouse,” said lead author Himmelstein. “Unless you’re Warren Buffett, your family is just one serious illness away from bankruptcy.”