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The latest Consumer Bankruptcy Project publication: Medical Bankruptcies

posted by Debb Thorne

Along with my co-authors (Himmelstein, Warren and Woolhandler), I would like to share with the readers of Credit Slips some of the highlights of our most recent publication from the Consumer Bankruptcy Project 2007: "Medical Bankruptcy in the United States, 2007: Results of a National Study." (Published June 4, 2009, by The American Journal of Medicine.)

From this random national sample we concluded that:

1) Between 2001 and 2007, the percent of medical bankruptcies increased from 49.6% to 62.1%. In 2007, that translated into approximately 866,000 medical bankruptcies.

2) If we use the "legacy variables" from the 2001 study to calculate the percent of medical bankruptcies in 2007, it reveals a 50 percent increase in these types of bankruptcies.

3) 77.9% of those who said an illness or injury directly led to the bankruptcy had health insurance at the onset of the illness/injury.

4) Most of the medically bankrupt families were middle class before the illness or injury--they owned homes, had attended college, and had middle-class occupations.

5) The greatest expenses for these medically bankrupt families was hospital bills.

6) For these medically bankrupt families, their out-of-pocket medical expenses since the onset of the illness or injury averaged $17,943.

I have downloaded a copy of the press release, which has a more complete discussion of the findings as well as a few comments from me and my co-authors. It also provides information about how and where to find the complete article.Download Press release_June20094 I have also downloaded a fact sheet that we shared with the media, Download AJM factsheet as well as a copy of a question-and-answer sheet that might answer some of your FAQs. Download Q&A3

When I was asked today by a reporter from the Columbus Dispatch if I was surprised by our findings, I had to say that, nope, I wasn't surprised, but I was dismayed.We are a country of hard-working and highly productive individuals--and the fact that our health care system is so dysfunctional that families end up bankrupt because of an illness or injury is a national (and international) disgrace. Our data provide strong evidence that the current system simply does not work. We deserve something better. Much better.

Comments

Articles on the study came out a couple days ago. I saw several dismissive comments (alleging the study is bias) because of Dr. Himmelstein's involvement in the study and his advocacy for a single payor healthcare system in the U.S.:

http://www.pnhp.org/news/2009/april/testimony_of_david_u.php

As a result, I think the study will be less influential than it should be.

«We are a country of hard-working and highly productive individuals» A Real American would point out that a large number (over 30 million families) of Fake Americans are so lazy and low producing that they rely on welfare ("stealing from winners") to eat, and that anybody making less than $100k/year is not very productive or hard working, just coasting along and enjoying the trickle-down from the Real Americans, those who make at least $100k. «--and the fact that our health care system is so dysfunctional that families end up bankrupt because of an illness or injury» A Real American would point out that it is the families that are dysfunctional -- if those families Real American winners who produced enough not to worry about the cost of healthcare, there would not be a problem. To a Real American the issue is that there are many families who don't produce enough to pay for their own health, and want to steal from the property of those who do. The Real American solution to the problem of losers trying to steal property from winners to pay for their health is "good riddance". That is simple and works at low cost. «is a national (and international) disgrace.» For Real Americans it is indeed a disgrace that lazy, unproductive losers can simply declare bankruptcy and refuse to return the wealth they have borrowed to their legitimate owners. «Our data provide strong evidence that the current system simply does not work. We deserve something better. Much better.» For a Real American a better system is one in which those losers who are too lazy or incompetent to produce enough to pay for their own health don't get to steal, via emergency room work, or via lavish welfare such as Medicaid or Medicare, from the winners who are good producers of wealth. Now I am not a Real American and I think that the arguments are are weak and miss several important points, but many USA voters think like Real American and are resentful that some of their hard earned property may be taken to fund the healthcare of losers. As to those losers, you hide as much as they reveal. Consider for example the obvious contradiction between: these two points: «4) Most of the medically bankrupt families were middle class before the illness or injury--they owned homes, had attended college, and had middle-class occupations.» «6) For these medically bankrupt families, their out-of-pocket medical expenses since the onset of the illness or injury averaged $17,943.» That does not compute -- how comes that middle class landlords can be bankrupted by total expenses of under $20k, less than the cost of a new car? It seems to be that you use "middle class" as a synonym of average, and the average USA family is working class, even if many working class people have a degree and live in a house they are in effect renting from their mortgage lender, as they have very little equity in it. In almost every country the working class is in the bottom middle 60% by income (the middle class is in the top 20%, the underclass in the bottom 20%), and the USA are no exception. Your "middle class" are really the "aspirational" working class, those poor workers who being caught in the American Dream make-believe they are middle class by borrowing from predatory lenders to make up stagnant or decreasing salaries. These overstretched people can then easily be bankrupted by the additional cash flow burden of expenses under $20k. Calling overstretched working class people "middle class" is common, but it is usually a ruse by populist reactionaries.

Here we go again. Taking a small sampling toward a new culprit why consumers file bankruptcy-medical debt. When will we reconcile the reason why consumers file bankruptcy is due to income. However, I suspect the ritual rain dance( studies ) will continue and for those who believe it effects the weather ( bankruptcy filing reasons ).


Just more evidence the Business As Usual approach is collapsing when a useful healthcare plan is bankruptcy court. The healthcare is pricing itself out of business ... abetted by the government. It will do as much damage as possible to its customers before it reaches the end.

I have no faith in the Obama/Congress approach, there are still too many incentives favoring the status quo.

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