Most Bankruptcies Caused by Medical Bills of Americans with Health Insurance
Posted by
Camryn HansenJune 08, 2009 8:26 PM
A recent Harvard University study found that in 2007, a full 62% of all bankruptcies filed in the US were caused by medical problems that led to overwhelming medical bills.
Tough luck, you say. Those people should’ve had insurance. But wait! Seventy eight percent of them did. And more than 60% of them were not using Medicare or Medicaid, but private insurance. Most were also middle-class, well-educated homeowners.
"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." –Catherine Arnst, Business Week
As anyone who has had a long, expensive illness can probably tell you, the care that is necessary to treat long, expensive illnesses is simply not covered by private insurance. Patients are strangled by loopholes in the form of co-pays, deductibles, and uncovered prescriptions and services. The somewhat shocking numbers underscore this quite clearly:
[M]edically bankrupt families with private insurance reported average out-of pocket medical bills of $17,749, while the uninsured's bills averaged $26,971. Of the families who started out with insurance but lost it during the course of their illness, medical bills averaged $22,658. –Business Week
In other words, when it comes to the infeasibility of funding extended care, there is not a huge difference between having health insurance, having insurance and losing it due to illness, and not having insurance at all. In this country, sick and middle class means sick and bankrupt.
President Obama recently noted that if we allow the current course of health care to continue, in a few years, every American will be paying one out of every five dollars he or she earns on health care. That’s 20% of our income—and that’s if you’re lucky and aren’t stuck by a debilitating disease that leaves you penniless, whether or not you have private health coverage. This is horrible.
We must attack the root causes of skyrocketing health care costs. Some of these costs are the result of unwarranted profiteering that has no place in our health care system, and in too many communities, folks are paying higher costs without receiving better care in return. And yet we know, for example, that there are places like the Mayo Clinic in Minnesota, the Cleveland Clinic in Ohio, and other institutions that offer some of the highest quality of care in the nation at some of the lowest costs in the nation. We should learn from their successes and promote the best practices, not the most expensive ones. That’s how we’ll achieve reform that fixes what doesn’t work, and builds on what does. –Barack Obama, Address to Congress
We absolutely need to pass legislation on health care reform immediately. Please contact your Congresspersons to express your overwhelming support of their re-election, contingent on their cooperation with President Obama on this issue.