Study: Medical Bills Underlie 60 Percent Of U.S. Bankruptcies
"Medical bills are involved in more than 60 percent of U.S. personal bankruptcies, an increase of 50 percent in just six years, U.S. researchers reported on Thursday," according to Reuters. The researchers found that "more than 75 percent of these bankrupt families had health insurance but still were overwhelmed by their medical debts." Most of them were "well-educated, owned homes and had middle-class occupations," the researchers from Harvard Law School, Harvard Medical School and Ohio University wrote in the American Journal of Medicine.
The authors of the study, Dr. David Himmelstein and Dr. Steffie Woolhandler of Harvard, are single-payer plan advocates. "Only single-payer national health insurance can make universal, comprehensive coverage affordable by saving the hundreds of billions we now waste on insurance overhead and bureaucracy," Woolhandler said. Neither Congress nor President Barack Obama is seriously considering a single-payer proposal.
Their research, which "surveyed 2,134 random families who filed for bankruptcy between January and April in 2007, before the current recession began," was funded by the Robert Wood Johnson Foundation. "While only 29 percent directly blamed medical bills for their bankruptcy, 62 percent had medical bills that totaled more than 10 percent of family income, said an illness was responsible, had lost income due to illness or some other medical factor," Reuters said (Fox, 6/4).
The LA Times adds that "President Obama's push for healthcare reforms gets a boost" from the study. The increase in medical bankruptcies "occurred despite a 2005 law aimed at making it more difficult for individuals to seek court protection from creditors" (Girion, 6/4).
CQ Politics also reports on the many insured Americans whose "policies just aren't comprehensive enough to protect them from potentially crushing bills." "As costs rise and employer benefits become weaker, the phenomenon of 'underinsurance' has become increasingly common, patient advocates say." A Commonwealth Fund study found that "about 25 million Americans had inadequate health coverage in 2007." Regulation of insurance plans historically "has been left up to the states, with the result that insurance protections vary widely around the country." Consumer groups say the federal government should take a new roll in "spelling out exactly what should be covered." But conservatives say it's not the role of the government, and they "question whether Congress is capable of coming up with a workable solution." An important question in regulating insurance plans is "where to draw the line between guaranteeing that benefits will be adequate and requiring so much coverage that all policies become more expensive" (Benson, 6/4).
This information was reprinted from kaiserhealthnews.org with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at kaiserhealthnews.org.
© Henry J. Kaiser Family Foundation. All rights reserved.
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I think medical costs are too high too but are we missleading people with this statistic. I know only 2 people who filed bankruptcy, both after expensive medical illnesses. But in both cases these were people living above their means, large credit card debt, unpaid cable bills unpaid cell phone. In both cases If the individuals worked, lived within their means and saved even 10% for a rainy day they would have been fine. The issue was not the cost of their medical care. It was the reckless irresponsible way they handled their finances. If you calculated the percent of people who were otherwise debt free (except maybe home or car loan) who had to file bankruptcy due to medical expenses I think you'd fine the number is below 20% rather than 60%. Before we ask the pharmaceutical companies, the doctors and nurses, the physical therapist etc to sacrifice to provide inexpensive care, we need to first look at the way we are living. Everyone must work for a living. Everyone should save 7% for retirement, 7% for a rainy day. Entertainment costs make up a similar percent of GDP as does medical cost....lets start the cutting there!!!!
THANK YOU FOR YORU THOUGHFUL POST. But let me give you a perspective on life with carincoid, terminal cancer, that does not kill you within 1 year, wihtout meds or chemo specially for it and need to take either experimental meds or take off label or non FDA approved medications which insurance will typically deny.
I have been alive and treated with this cancer for 7+ years now. For most of those years, I had had to travel, on my own cost, to receive treatment at whatever center is available and able to treat me. It started with Moffit Cancer Center @ Florida, then Houston MDACC, then Columbus Ohio, I have travled to NOLA and Wisconsin and Nebraska and now recently to Germany. For this I either travled monthly, or qtrly, at my expense.
To add, I have had to take very expenseive injection called Sandostatin which is not available generic wise, and have been billed from a high of $15,500 per injection, plus nurse, to a now more reasonable cost of $3800 +$250. This is a montly injection and I pay 10% until I hit a max per year that is very high. Finally, even though I have been on experimental treatments for 4 years, and did receive the meds free of charge, I still incurred MD "normal standrd of care charges, CAT scans, blood tests, other studies, etc. These charges, delending on the hosptial I attended, would be within my network and failry tolerable, or out of metwork with surprises which I was not aware of.
I was a middle manager in Corporate America and worked during 7 years od disease with little time off- 1 month when they removed my kidney, 2 months when they removed my lymph node and changed hosptials to look for the primary, and 1 month RFA of liver. The other visits where 1-2 days and I would use vacation cays. Actually, I used vacation days on all except the 2 month out of office.
I agree one should for "that rainy day, an for anything in life. However, as a Net Friend once told me about carcinoid, one can save for a rainy day, however, it is very difficult to save for "HURICANE KATRINA" which is what we typically get with carincoid. In addition, although a blessing to have a "cancer in slow motion" as its called around some circle (depending on the cancer KI index rate, some due from this in less than a year), the "down side is by staying alive so long, the relentless cancer continues, prompting more and advanced treatment which will or probably won;t be covered by insurance. Now that I have run out of experimental medicine options due to taking the others (RAD and Pazopanib) I am forced to look for surgery, other off label meds which run an average of $10,000 a month (Avastin) or non FDA approved which is out of pocket with attorneys fees for appeal for coverage (there are a lot of folks who have this covered)!
Net, at the end of the day, unless you are extremely weathly, one c$an not "SAVE FOR THIS HELL". The cost for my treatments and travel, over the past 7 years, and clmibing with my recent and last PRRT treatment in Germany, now totals $217,000. That is about $31,000 a year! Being an accountant, I have my tax returns so fairly easy to maintain. The rainy day savings are long gone, with not only cancer but additional items which are unqiue but sometimes occurr- rehab, college, law suits for home build wrong, etc...... These would not be an issue at all is the expense of cancer is not in the way. Finally, I am faced with an additional $40,000 perhaps or more if I continue my treatmentsw, plus travel, plus the tests and scans that will be needed. That is out of pocket. The issue now is I AM ON DISABILITY and not working, my income is now fixed and at 50% os my previous salary, however, the medical expenses continue to climb.
Net, my friend, I for one can attest there is rrom for improvement from the medical community and insurance and pharma to provide a less expensive and tolerable method to manage a chronic long term disease with few options, that will kill you but not yet. And it will kill you much faster unless you fight it btw!
I will finish on next entry!
Continued from first entry (too long)
Lastly, as someone who lived in canada for 2 years and was covered under the Ontario Health Insruance Program, the state plan for everyone in the country, I saw the difference-- both very good and some downside, on socalized medicine. However, not knowing your pool of folks you have chosen realtive for sample, I know of many individuals I have spoken to that have filed bankruptcy because of the disease! Some have even sold everything, moved to a trailer near their oncologist in New Orleans for example, to be near thier MD since they have "run out of money".
In my case, I have a concern that will happen and wont let it. As someone with a spouse and children, the last thing you want to do is spend everything to stay alive another year. Unfortunately, with this disease, in essence that is what we do. If it was not for the fact I worked and had insurance, bought policies to protect me as much as I could LTC, disability, health, and saved, it may come down to filing for bankruptcy due to all the reasons noted.
As another example of how this world "get you" look for one of my postings earlier in the blog about the $15,500 LAR30 injection which I had to pay for, and ended up with my taxes garnished, due to the fact the hosptial and associated drugs being adminstered from the office WERE NOT IN MY NETWORK, ALTHOUGH THE MD THAT I WAS SEEING, HAD THE APPOINTMENT WITH, HAD HER SAY "AHHHH" to ME, PAID MY COPAY FOR, but ended, after 2 months of being treated, since the billing "was delayed mysteriously" for $31.000 for a drug I can purchase from Walgreens for $2000 a dose!!!! Health Care Reform......3 years of having my taxes garnished and filed and hit my credit which in turn drives my rates up.....
May yoou never end up in my world, but I do you for your comments aqnd perspective, although I resspectfully disagree!
People should prepare for old age and health care. Then they won't need to declare bankruptcy?
This is not only a misunderstanding but a limited view of what people without means encounter. Here's the quote from the L.A. Times:
The study does not suggest that medical expenses were the sole cause for these bankruptcies, but it does identify them as a contributing factor. The increase in such filings occurred despite a 2005 law aimed at making it more difficult for individuals to seek court protection from creditors.
And the latest study probably understates the current burden of medical expenses because it is based on bankruptcies filed before the recession hit.
Folks with good jobs and benefits who have saved what they thought would see them through, even folks who paid premiums on secondary medical insurance and paid off their homes early are forced to the wall when bills for medical care start rolling in. Sure - there are people who do not prepare for old age, illness or even sending their kids to college. But does that mean they should suffer now? How about their loved ones? Their elderly parents, children or spouses? Should they suffer or die because someone bought a big screen TV instead of health insurance?
Our judgmental, Puritan ancestors still influence us. The thought that someone who does not deserve help might get it does not square with cutting out social programs for the vast number who are deserving. I worked for many years as a journalist. When the 12th person pleaded with me to help publicize their problems with healthcare, I began to investigate the subject with more determination. There were single moms whose kids needed heart surgery to live; elderly couples forced to divorce so they wouldn't lose their homes to pay for nursing care that one or both of them needed. There were young men and women who had health problems that could not be easily resolved and required expensive treatments so they could continue working.
In a nutshell: people who have no experience with costly medical situations have no idea what will happen if they are hit with disaster. Yet they judge.
part 1 posted for lucy wiley
Part II posted for Lucy Wiley
Fact: the cost of drugs has risen astronomically in this country. Only those with excellent health insurance coverage can afford many of the life-saving prescriptions they require. Even THEY pay more each year as the cost continues to rise and insurers cover less and less of the price. Some drugs for patients with heart and bone marrow disease costs thousands of dollars per day. Medicare pays little and usually doesn't cover anything very costly or unusual.
Fact: raise their prices because they are forced in many cases to provide care for people who have no money to pay for their services. I'm not talking about people who have no insurance or people who could afford the costs if they would just cash in some stock. I'm talking about people who have paid into the health insurance pool for years without having to avail themselves of the benefits. People who now find the gap between what they need and what the insurance company pays is completely out of their reach.
Fact: physicians and other healthcare professionals have not sacrificed anything to participate in this scandal. In fact, their earnings have increased. Nurses are paid more than ever. Doctors are under pressure to speed patients through exams because insurance pays so little for their services but that doesn't mean they don't get paid because they DO. Who pays? The patient. When you sign that consent to treatment, you agree to make up for whatever insurance doesn't cover. Does everyone pay? No. But many do - for as long as their money lasts.
You need your doctor and the last thing you want is for him or her to stop seeing you. So you pay as long as you can. When you run through your savings, you move to a smaller house or apartment. You sell what you can. You put everything on a credit card because you need the drugs or the procedure or the care for you or a loved one.
When you can't do that anymore, you are faced with massive debt and bankruptcy is the only way out. This story is replayed many times all day long throughout the US. If you don't believe me, ask a hospital social worker.
There is no way to prepare for the bad things that can happen when your health becomes a crisis. Even if you have put money away. Even if you have prepared for insurance coverage, etc. If the illness is prolonged and the treatment is costly - you either declare bankruptcy or eventually, someone will come and take what little you have and you or your loved one will be turned away from the hospital. The programs for getting free or low-cost medication are overwhelmed. Some of them are just a joke. One place to help people with cancer can only be reached by phone and intake is limited to 15 minutes per month. I'm not kidding. If you make $10 above their guidelines for assistance - you are out of luck.
In many cases, bed-ridden patients who can't pay are transferred to the lowest-cost nursing facilities. If you've ever been in one of these, I ask you - is that where you want to live or die?
Either healthcare is a right or it is not. I believe it is. I will support anyone who agrees with me. It is sooo easy to blame the victim - which may be you, one of these days.
Lucy Wiley
Wimberley, Tx
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