Who Went Bankrupt?
By Pat Racimora on June 6, 2009 at 3:30 PM in Economy, Health Care, Mortgages, Universal Health Care
The stereotype of who goes bankrupt is hardly complimentary. The image comes to mind of irresponsible people spending more than they know they have on whatever strikes their fancy, and then look for easy outs when the shit hits the fan. But, you probably know the correct answer to the question posed in the title. Yet, did you know how startling it really is?
Researchers at Harvard and Ohio University have just issued the results of a survey to assess the frequency of bankruptcies due to medical expenses. Here are some highlights:
Nearly two-thirds of all bankruptcies have a medical cause (e.g., spiraling medical and drug bills, lost income from being ill or caring for ailing family members, forced mortgaging of homes to pay medical bills that then go into foreclosure).
Most medical debtors were well educated.
Most medical debtors were middle class before their economic downfall.
Two thirds of the medical debtors were homeowners.
Three quarters of medical debtors had health insurance, although there were coverage gaps.
The share of bankruptcies attributable to medical problems rose by 50% between 2001 and 2007. And because the survey data were collected before the recent sharp downswing in our economy, there is plenty of reason to believe that medical bankruptcies will increase at the same time that the financial burden of health care is escalating.
This last month alone more than 20,000 families filed for bankruptcy every week. 2009 will bring an expected 1.4 million bankruptcies. In total, an estimated 3.8 million Americans will be caught up in families filing for personal bankruptcy this year.
Clearly, for the health of our nation, health insurance reform must be a priority. As Dr. David Himmelstein, the senior author of the report and an advocate for single payer health care, called private insurance “a defective product, akin to an umbrella that melts in the rain.” He added, “Our findings are frightening. Unless you’re Warren Buffett, your family is just one serious illness away from bankruptcy.”
Health insurance is like an umbrella that melts in the rain…A very frightening thought indeed.
(h/t to Dr. K for sending me the story.)
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