Medical bills underlie 60 percent of U.S. bankruptcies: study

  1. Medical bills underlie 60 percent of U.S. bankruptcies: study
    Source

    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.

    More than 75 percent of these bankrupt families had health insurance but still were overwhelmed by their medical debts, the team at Harvard Law School, Harvard Medical School and Ohio University reported in the American Journal of Medicine.

    "Using a conservative definition, 62.1 percent of all bankruptcies in 2007 were medical; 92 percent of these medical debtors had medical debts over $5,000, or 10 percent of pretax family income," the researchers wrote.
    "Most medical debtors were well-educated, owned homes and had middle-class occupations."

    The researchers, whose work was paid for by the Robert Wood Johnson Foundation, said the share of bankruptcies that could be blamed on medical problems rose by 50 percent from 2001 to 2007.

    "Unless you're Warren Buffett, your family is just one serious illness away from bankruptcy," Harvard's Dr. David Himmelstein, an advocate for a single-payer health insurance program for the United States, said in a statement.

    "For middle-class Americans, health insurance offers little protection," he added.
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    About blue note

    Joined: Apr '09; Posts: 1,211; Likes: 2,651

    42 Comments

  3. by   FireStarterRN
    The article says that medical bills "are involved" in 60% of bankruptcies. Then it makes the leap to totally blame those bankruptcies on medical bills, which is probably a little journalistic license there.

    Probably, a more accurate version is that these people were over-extended on many fronts and their medical problems were one factor among many contributing to their bankruptcy. Medical problems not only cause extra expenses but can interfere with the ability to work.

    I'd like to see a more detailed analysis of the multiple causes of bankruptcies before I jump to any conclusions like this article seems to want to do.
  4. by   oxford_girl
    This might explain what the 'involved' means
    http://www.bankruptcylawnetwork.com/...medical-bills/

    Highest Costs for Diabetes, Neurological Illness

    http://www.businessweek.com/bwdaily/...%3B+government
  5. by   lamazeteacher
    "For middle-class Americans, health insurance offers little protection," Quote from just released, 1 hour old Reuter's article (the source of blue note's thread here)
    Blue Note, hats off to you, you're sure on top of the news!!

    Read the article, y'all - all above posters' questions are answered therein......

    I attended the required class for those who are about to file bankruptcy, yesterday. It was sobering, even interesting, and allowed me to make the informed choice not to declare bankruptcy, as I have no huge outstanding credit card debts, as I stopped using those when I cut them all up 2 decades ago.

    Luckily I had some "slush fund" money from the sale of a property I had (I sold it at the beginning of this year), because it was about to be foreclosed upon for the same reason the condo I'm in now is about to be foreclosed upon - I can't pay the constantly rising Homeowner Association dues in addition to my mortgages. However that's not the real reason this situation is upon me.....

    My medications were no longer available in sample form, after 20 years of taking them and always fearing the day they'd become generic, and then no samples would be there. Well, that time came about 6 months ago, and I've had to suck over $500./month from the bank account I had at that time (it's depleted).

    Other factors, were involved, too. I lost jobs after becoming 55 years of age, due I believe to "health" insurance companies charging employers over $1,000/month for employees who achieved that age. I usually get jobs for which I am chosen to be interviewed, due to having my degree, varied experience, and ability to interview well. See "about me".

    When I got Medicare (thank God), I still wasn't a bargain for employers, as Blue Cross (and all their subsidiaries) won't allow Medicare to be the primary insurer, in contracts with large employers, so they charge over $3,000/month for those over 65. Those of you still working over those ages, who have been with your place of employment many years, may have been "grandfathered in", disallowing that overcharge.

    So that's a cause of medical care causing people to become so financially encumbered that they end up declaring bankruptcy. Then, when/if they have to be hospitalized, with the cost of supplemental policies quite high for Medicare recipients, without that, the money pit deepens. (You have to pay 20% of the amount Medicare will cover.)

    Then, since Medicare D coverage isn't cheap, and most patients have medications made by different manufacturers, each charging monthly premiums, (which in my case made the cost of that coverage higher than the cost of my prescriptions). Joining an HMO usually means that they won't allow the use of very expensive prescriptions........ "It isn't in our formulary"

    When my financial resources hit bottom (recently)I was given medicaid for my prescriptions, given a list of HMOs and told to canvass each to see IF my meds were in their formulary. Well, Health Net jumped "the gun", sending me their card to present at pharmacies and when I called that company's pharmaceutical information number, I was told that all my meds except for one very inexpensive one (???) were covered - NOT! They lie, folks - no surprise.

    The first prescription I tried to get, for Prevacid (no other proton pump inhibitor works for me, but every time my insurance coverage has changed in the past 20 years, I was told to try the other ones again, before they'd pay for Prevacid). I'd cry in frustration, "Why do you want me to be in pain?" During one of the past occasions, while on a different product, I had a drop in my H&H, and the MD appealed to Kaiser, for them to provide the one that works.

    So I found out that decisions such as that can be appealed. However, many of the physicians' offices won't do the appeal without charging a fairly large fee - for me, unemployed - to do that. They preferred to give me samples, which was often the only reason I stayed with a doctor who was less than astute.

    I've had 3 more gastric hemorrhages resulting in high medical bills, which I was unable to pay, and long periods of inability to work while recovering from them.
    Then the "coup de gras" occurred. My ex-husband refused to abide with our divorce "agreement", at his very wealthy wife's urging, and his tendency to play it "close to his chest", financially. I could say more...... So that income dried up, which had previously covered my mortgages (they're sub prime, but no cooperation yet, with the Obama relief program holds me to the high payments). Another very severe hemorrhage ensued, requiring hospitalization.

    So now I'm on (gulp) "food stamps" and Medicare B is covered by Medicaid, along with my prescription coverage (still have copays, but they're minimal - just $50/month. Yesterday I was at Costco and asked the guy checking membership cards at the entrance, if "EBT" cards are accepted for food there.
    He said, "No! We don't want those kind of people here". I told him that it was mine, and made him listen to my story, crying. Guess he won't say that to anyone, again. The new upscale market that just opened next door to Costco won't take it, either.

    So weighing just how much health costs weigh in the cause of bankruptcy, please keep in mind that it's like dominoes, one unaffordable piece knocks others down, until a person gets the sense of being ground by the heel of society, and not able to get up.

    Yah, I never dreamed that I'd ever be 70, single, and poor, either.
    Last edit by lamazeteacher on Jun 4, '09 : Reason: left words out
  6. by   lamazeteacher
    Quote from firestarterrn
    the article says that medical bills "are involved" in 60% of bankruptcies. then it makes the leap to totally blame those bankruptcies on medical bills, which is probably a little journalistic license there. not!! read my post above.

    probably, a more accurate version is that these people were over-extended on many fronts and their medical problems were one factor among many contributing to their bankruptcy. medical problems not only cause extra expenses but can interfere with the ability to work.

    i'd like to see a more detailed analysis of the multiple causes of bankruptcies before i jump to any conclusions like this article seems to want to do.
    my post above describes the slippery slope to poverty......
  7. by   blue note
    lamazeteacher, thank you for sharing your story and showing that these problems are NOT exaggerated or made up, as some would like to claim. It is very sobering to think that even those who currently have employer-based insurance can find themselves in bad to dire straits once they reach a certain age, or get a serious illness. It truly illustrates why we urgently need health care reform so that people don't end up financially ruined because of health issues.

    Here's a related story from the NY Times about how people can no longer afford their prescriptions due to the recession.

    Even with the Medicare drug benefit, even with the prevalence of low-cost generics, even with loss-leader discounting by big chains, many Americans still find themselves unable to afford the prescription medications that manage their life-threatening conditions.

    In downtrodden communities like Rocky Mount, where unemployment has doubled to 14 percent in a year, the recession has heightened the struggle. National surveys consistently find that as many as a third of respondents say they are not complying with prescriptions because of cost, up from about a fourth three years ago.

    Many customers at Almand's Oakwood neighborhood store, particularly those too well off for Medicaid but unable to afford insurance, simply pick and choose among risks. They weigh not taking maintenance medications against more immediate needs like shelter and food.

    The pharmacists see it every day. About eight months ago, they stopped automatically preparing refills for regular customers because they found that more than half were not being collected and had to be restocked.
  8. by   oxford_girl
    Not to be a harbinger of bad news but there are also studies about failings in employment based insurance
    http://content.healthaffairs.org/cgi...f.w3.237v1/DC1
    http://www.epi.org/publications/entry/bp203/

    I really hope someday that America will have a universal health care
  9. by   misplaced1
    i have an advanced degree, had a great paying job, retirement stashed away and "great" health insurance. I have nothing left and am trying to work my way back, over 700$ in prescription copays alone will kill your finances. But this changes you. Those of you who have not had a chronic or lifethreatening illness watch what you think about those of us that have. You are ill informed if you think that by working and doing what you are supposed to you can avert this crisis. Unless you have a million or so in the bank you cannot.

    Then just watch what happens when you return to job market and try to get a job with health insurance or self insure. Good luck! This is why i was going inot nursing, with the shortage and all perhaps no one would care about my age or past health problems. Ha. We shall see.

    With the exception of maybe 1% of the population, all of us here in the US are a serious illness away from bankruptcy. Sometimes, I am relieved I know the truth which so few seem to be able to accept. But the reality is that you can slave away putting away that retirement money and if you get sick it will go so fast it will be like pouring carosene over it and lighting a match.

    The experience changed me so that I enjoy my healthy life while I have it and don't worry about retirment and all that so much. It didnt do me any good before.
  10. by   Orca
    My grandfather lived in Canada. He lived on a modest pension, but he never had to worry about losing his house or being up to his eyeballs in debt. He also never had to worry that some insurance company would deny coverage for a procedure or medication he needed, or refuse to cover him altogether.

    Our system is bloated because we're providing most of the profits for insurance companies, HMOs and pharmaceutical companies. We have the highest medication costs in the world because the system allows it. Despite what others may say, we do not have the best health care in the world in exchange for the high cost we pay. We're paying for the doctor's new Lexus, the multi-million-dollar bonus for the HMO executive and television ads for prescription medication - so the drug companies can persuade us to perpetuate the problem by pushing our doctors to prescribe the newest and most expensive medications.

    There will be a lot of arguments on both sides. The simple fact is that this system bankrupts too many people for too little gain, and there is a lot of waste and money paid for things of no direct benefit to the patient. A friend of mine made the flippant comment "If you believe health care is expensive now, wait until it's free." If proper price controls are in place that won't be the case. As a taxpayer I am already paying for the healthcare of others - indigents and the uninsured who go to hospitals now. It certainly hasn't lowered my bill any. I'm still just a major illness or accident away from losing everything I own.
    Last edit by Orca on Jun 5, '09
  11. by   CRNA2007
    what generic medicines are costing you over $500/month?



    Quote from lamazeteacher
    "For middle-class Americans, health insurance offers little protection," Quote from just released, 1 hour old Reuter's article (the source of blue note's thread here)
    Blue Note, hats off to you, you're sure on top of the news!!

    Read the article, y'all - all above posters' questions are answered therein......

    I attended the required class for those who are about to file bankruptcy, yesterday. It was sobering, even interesting, and allowed me to make the informed choice not to declare bankruptcy, as I have no huge outstanding credit card debts, as I stopped using those when I cut them all up 2 decades ago.

    Luckily I had some "slush fund" money from the sale of a property I had (I sold it at the beginning of this year), because it was about to be foreclosed upon for the same reason the condo I'm in now is about to be foreclosed upon - I can't pay the constantly rising Homeowner Association dues in addition to my mortgages. However that's not the real reason this situation is upon me.....

    My medications were no longer available in sample form, after 20 years of taking them and always fearing the day they'd become generic, and then no samples would be there. Well, that time came about 6 months ago, and I've had to suck over $500./month from the bank account I had at that time (it's depleted).

    Other factors, were involved, too. I lost jobs after becoming 55 years of age, due I believe to "health" insurance companies charging employers over $1,000/month for employees who achieved that age. I usually get jobs for which I am chosen to be interviewed, due to having my degree, varied experience, and ability to interview well. See "about me".

    When I got Medicare (thank God), I still wasn't a bargain for employers, as Blue Cross (and all their subsidiaries) won't allow Medicare to be the primary insurer, in contracts with large employers, so they charge over $3,000/month for those over 65. Those of you still working over those ages, who have been with your place of employment many years, may have been "grandfathered in", disallowing that overcharge.

    So that's a cause of medical care causing people to become so financially encumbered that they end up declaring bankruptcy. Then, when/if they have to be hospitalized, with the cost of supplemental policies quite high for Medicare recipients, without that, the money pit deepens. (You have to pay 20% of the amount Medicare will cover.)

    Then, since Medicare D coverage isn't cheap, and most patients have medications made by different manufacturers, each charging monthly premiums, (which in my case made the cost of that coverage higher than the cost of my prescriptions). Joining an HMO usually means that they won't allow the use of very expensive prescriptions........ "It isn't in our formulary"

    When my financial resources hit bottom (recently)I was given medicaid for my prescriptions, given a list of HMOs and told to canvass each to see IF my meds were in their formulary. Well, Health Net jumped "the gun", sending me their card to present at pharmacies and when I called that company's pharmaceutical information number, I was told that all my meds except for one very inexpensive one (???) were covered - NOT! They lie, folks - no surprise.

    The first prescription I tried to get, for Prevacid (no other proton pump inhibitor works for me, but every time my insurance coverage has changed in the past 20 years, I was told to try the other ones again, before they'd pay for Prevacid). I'd cry in frustration, "Why do you want me to be in pain?" During one of the past occasions, while on a different product, I had a drop in my H&H, and the MD appealed to Kaiser, for them to provide the one that works.

    So I found out that decisions such as that can be appealed. However, many of the physicians' offices won't do the appeal without charging a fairly large fee - for me, unemployed - to do that. They preferred to give me samples, which was often the only reason I stayed with a doctor who was less than astute.

    I've had 3 more gastric hemorrhages resulting in high medical bills, which I was unable to pay, and long periods of inability to work while recovering from them.
    Then the "coup de gras" occurred. My ex-husband refused to abide with our divorce "agreement", at his very wealthy wife's urging, and his tendency to play it "close to his chest", financially. I could say more...... So that income dried up, which had previously covered my mortgages (they're sub prime, but no cooperation yet, with the Obama relief program holds me to the high payments). Another very severe hemorrhage ensued, requiring hospitalization.

    So now I'm on (gulp) "food stamps" and Medicare B is covered by Medicaid, along with my prescription coverage (still have copays, but they're minimal - just $50/month. Yesterday I was at Costco and asked the guy checking membership cards at the entrance, if "EBT" cards are accepted for food there.
    He said, "No! We don't want those kind of people here". I told him that it was mine, and made him listen to my story, crying. Guess he won't say that to anyone, again. The new upscale market that just opened next door to Costco won't take it, either.

    So weighing just how much health costs weigh in the cause of bankruptcy, please keep in mind that it's like dominoes, one unaffordable piece knocks others down, until a person gets the sense of being ground by the heel of society, and not able to get up.

    Yah, I never dreamed that I'd ever be 70, single, and poor, either.
  12. by   CRNA2007
  13. by   blue note
    Quote from CRNA2007

    Truth? More like truthiness by the health insurance lobby and conservatives!

    Bottom of article: "The authors are grateful to America's Health Insurance Plans for supporting this research." And I am sure the gratitude is mutual. AHIP is a lobby group for the health insurance companies, which is working tirelessly to block any genuine health reform and things like a public plan that would break their monopoly over the health insurance market. Hardly an unbiased source!

    http://www.kellogg.northwestern.edu/...th_vs_fact.pdf

    This is simply the pdf file of the above, not a new article.

    http://www.shieldofachilles.net/2007...lf-of-all.html

    Dated July 16, 2007 and refers to a 2005 study, not the one referenced here. A quick look at the blog shows that it is a patently biased, right-wing blog writen by um....some random conservative dude in the military. Sorry, but I'm going to take the word of Harvard Law School, Harvard Medical School and Ohio University researchers over that.
  14. by   herring_RN
    this thread is about the study of 2007 nankrupcies just published this year.
    medical bankruptcy in the united states, 2007:
    results of a national study

    ...as recently as 1981, only 8% of families filing for bankruptcy did so in the aftermath of a serious medical problem. by contrast, our 2001 study in 5 states found that illness or medical bills contributed to about half of bankruptcies.
    since then, the number of un- and underinsured americans has grown;health costs have increased; and congress tightened the bankruptcy laws.[color=#000064][color=#000064][color=#000064]...

    ...bankruptcies meeting at least one of the following criteria: illness, injury or medical bills listed as specific reason for filing or uncovered medical bills >$5000 or >10% of annual family income or, lost >2 weeks of work-related income due to illness/injury, or depleted home equity to pay medical bills....

    http://pnhp.org/new_bankruptcy_study...uptcy-2009.pdf

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