Borrowing to stay healthy.....

[HM2VikingRN, RN]

Key Findings

Our findings show that low- and middle-income households who cited medical expenses as a factor in their credit card debt had higher levels of credit card debt than those who did not cite medical expenses as a factor. Overall in our survey, 29 percent of lowand

middle-income households with credit card debt reported that medical expenses contributed to their current level of credit card debt. Within that group, 69 percent had a major medical expense in the previous three years. Overall, 20 percent of indebted low- and middle-income households reported both having a major medical expense in

the previous three years and that medical expenses contributed to their current level of credit card debt. Throughout this report, we will refer to this group as "medically indebted." Within this "medically indebted" group,

Forty-four percent had credit card debt higher than $10,000 and 57 percent had credit card debt higher than $5,000.

Average credit card debt was higher for low- and middle- income households ($11,623) as compared to households without a major medical expense in the previous three years or medical expenses contributing to their credit card debt ($7,964).

Average credit card debt was higher for those without health insurance ($14,512)

than for those with health insurance ($10,973).

Average credit card debt was higher for households with children ($12,840) than for those without children ($10,669).

The medically indebted are more likely to be called by bill collectors than those without such medical expenses (62 percent versus 38 percent).

Levels of credit card debt within certain demographic groups were considerably higher among those who had a major medical expense in the previous three years

http://www.demos.org/pubs/healthy_web.pdf

[HM2VikingRN, RN]

Finds that half of personal bankruptcies are predated by medical problems, even among the insured.

In 2001, 1.458 million American families filed for bankruptcy. To investigate medical contributors to bankruptcy we surveyed 1771 personal bankruptcy filers in five Federal courts, and subsequently completed in-depth interviews with 931 of them. About half of debtors cited medical causes, indicating that between 1.850 and 2.227 million Americans (filers plus dependents) experienced medical bankruptcy. Among individuals whose illness led to bankruptcy, out-of-pocket costs averaged $11,854 since the start of illness; 75.7% had insurance at the onset of illness. Medical debtors were 42% more likely than other debtors to experience lapses in coverage. Even middle class, insured families often fall prey to financial catastrophe when sick.In 2001, 1.458 million American families filed for bankruptcy.

http://www.demos.org/pub438.cfm

http://www.demos.org/pubs/Harvard_MedDebtFeb05.pdf