A recent study published in the American Journal of Medicine (PDF) reviewing personal bankruptcies found that medical bills contributed to 62.1% of all bankruptcies in 2007; 92% of these debtors had medical debts over $5,000. The rest met criteria for bankruptcy because they had lost significant income due to illness, or mortgaged a home to pay medical bills.
While that is not too suprising, what is interesting is that most medical debtors were well educated, owned homes, and had middle-class occupations. Three quarters had health insurance.
The share of bankruptcies attributable to medical problems rose by 49.6% since 2001.
The private insurance system does not work, and the flaws show up in bankruptcy. Most people don’t have enough wiggle room in their budget to cover deductibles and co-pays, even if an employer is covering the premium payments. And high deductible policies are just a crap game.
Maybe the cost of bankruptcy—to consumers and the economy—should be included in the cost of healthcare.
(photo: Darren Hester)