Medical Bankruptcy - Time to update that statistic
Posted on June 4th, 2009 by Jason Rosenbaum in Profits Before People
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One American goes bankrupt every 30 seconds due to health care costs. It's a statistic I use over and over to make the point that we need reform now.
Bankruptcy is a personal tragedy, of course. But it's also an economic catastrophe. How do we expect to get out of our economic crisis is health care costs are keeping hardworking Americans down like that?
That statistic was based off the fact that a majority of all bankruptcies in America were due to health care costs. But that number just went up:
Medical bills are behind more than 60 percent of U.S. personal bankruptcies, U.S. researchers reported on Thursday in a report they said demonstrates that healthcare reform is on the wrong track.
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.
The most striking part about this is the last paragraph - 75% of these people have health insurance.
This basically proves that private health insurance in America is little more than a scam. Isn't the whole point of insurance to avoid personal ruin by large medical costs by paying bit by bit over time? Clearly, if most of the people going bankrupt due to medical costs are insured, private insurance is not performing its core purpose.
This is the essence of why we need reform, to force private insurance to actually insure people, or give people an option to join a plan with the public's interest in mind if private insurance refuses to change.
And, someone needs to recalculate that one-every-30-seconds number.
I have a more radical solution: Go back to the situation 40 years ago, where private health insurance was *illegal*, at least in my state. All health insurance companies authorized in our state were required to be non-profit or mutual companies, for-profit companies were outlawed. Then the Feds got involved with health insurance in the mid 70's and the Federal courts overturned those laws… but you didn't hear these medical bankruptcy stories until it became possible for health insurers to profit from denying care.
- Badtux the Healthcare Penguin
Bankruptcies happen because people hire an attorney to file bankruptcy paperwork for them.
In my experience if you agree to work with the hospital to pay they will work with you.
The bill for the uninsured is roughly 50% lower than those with insurance. We don't have insurance and we pay our bills.
It works…try it!
Very true. Our healthcare system is in real trouble unless we do something in the near future.
Clearly there is something wrong with the statistics above. The US Courts have reported roughly 1.12 million bankruptcy claims filed in 2008, the vast majority of these individual and not business claims. The stat "every 30 seconds an American goes bankrupt due to medical costs" would yield 1.05 million bankruptcies in just one year. An investigation into the "30 second" stat uncovers the fact that that stat comes from a single Harvard study which interviewed around 1700 people. From that study the 30 second figure is extrapolated. But clearly, given how many bankruptcies there are in America every year, it is a bogus figure, one that I've already seen people like Senator Al Franken throw around as if it is true. And I doubt he's actually done the investigative work to see if it is true.