How many bankruptcies are due to medical debts or illness?
You’ll be surprised…
Why do Americans file for bankruptcy?
More than 60% of all bankruptcies in 2007 were due to medical bills and illness. Every 90 seconds another American files for medical bankruptcy, according to a national study published this month in The American Journal of Medicine.
This is a 50% increase in medical bankruptcies since 2001.
In 1981, only 8% of families filed for bankruptcy.
Most medical debtors must be poor, uneducated, and uninsured, right? Not so. Most were well-educated, homeowners, and held middle-class jobs. Most had health insurance.
It could be you, it could be me.
What causes medical bankruptcy? For most, high medical bills were the cause. Many families found themselves under-insured. Others lost coverage when they became so sick they couldn’t work and their employers dumped them.
Over 50% of companies cancel insurance immediately or within a year if an employee gets too sick to work. That’s what happened to my family member, as I described on Tuesday.
Remember, the records in the journal article were from 2007—before the Wall Street crash, the housing crash, the collapse of the U.S. auto industry, and record unemployment. If 60% of bankruptcies were medical in 2007, how much higher will the rate be in 2008 and 2009?
Welcome to the Third World—American style. As the authors of the study put it: “Medical impoverishment, although common in poor nations, is almost unheard of in wealthy countries other than the US. Most provide a stronger safety net of disability income support. All have some form of national health insurance.”
How can we possibly reform healthcare—and eliminate medical bankruptcies—without some sort of national health insurance?
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