Monday, July 20, 2009

62 percent of personal bankruptcies linked to medical costs

Posted By on Mon, Jul 20, 2009 at 9:58 AM

It's impossible to deny that the U.S. economy is unhealthy.

When people with private insurance are forced to file bankruptcy because they can't afford their medical bills, we've got a major societal problem.

The bad news: The problem's now decades old and only getting worse.

Medical problems caused 62% of all personal bankruptcies filed in the U.S. in 2007, according to a study by Harvard researchers. And in a finding that surprised even the researchers, 78% of those filers had medical insurance at the start of their illness, including 60.3% who had private coverage, not Medicare or Medicaid.

Medically related bankruptcies have been rising steadily for decades. In 1981, only 8% of families filing for bankruptcy cited a serious medical problem as the reason, while a 2001 study of bankruptcies in five states by the same researchers found that illness or medical bills contributed to 50% of all filings. This newest, nationwide study, conducted before the start of the current recession by Drs. David Himmelstein and Steffie Woolhandler of Harvard Medical School, Elizabeth Warren of Harvard Law School, and Deborah Thorne, a sociology professor at Ohio University, found that the filers were for the most part solidly middle class before medical disaster hit. Two-thirds owned their home and three-fifths had gone to college.

Read more from Business Week.

Here's a news report about this very issue -- from two years ago:

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