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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By Sarah Palin (Release date: November 17. 2009)
Obama’s plan is a bad one. If we are to have healthcare reform, single payer is the only way to go. I am hoping that MN is a role model and paves the way for all of us.
http://www.muhcc.org/
Agreed.
The only thing worse than Obama’s plan is the status quo.
word, but if anything, Ozero will actively obstruct single payer health care, and claim he’s doing us a favor.
Baucus says single-payer is off the table. He says that it won’t pass and that they don’t want to waste capital trying to get it passed. The options that they are considering aren’t much better than what we’ve got. The insurance industry contributes big money to campaigns and they’ve got loads of lobbyists working to make sure single-payer never ever happens.
I (snark) personally believe that most Americans don’t fully realize that the root problem of their economic peril is poor legal representation. With the lawyer of … say … Bernie Madoff …. you too could be in a relatively comfy white collar cell versus … well, let’s just say … not.
The only difference between those in true peril and those in mere straits is legal representation. Let’s make sure that all Americans have equal access to Mark Geragos, Bob Shapiro, Al Dershowitz and the now inexplicably famous pere of the Karadashian family — Bob. And then there are those scions of society attorneys who represented the Kennedy cousin at his rape trial … people who are more accustomed to representing trusts than thrusts.
Why is it always the pioneers of medicine who must not just study an additional x years but also intern, resident, etc. and still face more daunting financial loans than their judas (oops, my bad !
) colleagues face the full brunt of the current melt down?
I am not a Shakespearan devotee of killing all lawyers, but I think we should help them find their place in society!
I agree with you 100%. Single payer is the only answer to getting the insurance industry out of the health care business and skimming off hundreds of $100 in pure profit with no health care benefit whatsoever.
This is so very true thanks for bringing it to light Pat. More and more insurance policies are being riddled with “gaps”. In many instances services are left out of contracts between hospitals and insurance companies so a contract can be agreed upon. This leaves a gap that the individual has no idea exist, unless and until you fall into it. Even if you have a book of providers some things simply are not listed like pathology or radiology, nor are those listed on websites you find out when the bill comes. You think you’re covered, you’ve gone to the correct facility, chosen the correct doctors, etc., but then you find a gap and you’re in debt.
Who is at fault for these gaps can be debated back and forth, greedy insurance companies that refuse to pay adequately for services….or hospitals looking for ways to pad their bottom line. The who and why doesn’t matter so much to me, just that the gaps exist.
I personally walked into an ER in September of 2006 with my young daughter. Within a few hours we were told that our child had cancer and our life changed forever. I remember thinking at that moment….”Thank God we have good insurance”. In fact my husband and I reassured each other with that, knowing no matter what our child needed it would be covered. My husband is a federal employee and we have never scrimped when selecting our health care policy…just in case. So that night even though we were living a parent’s worst nightmare…we knew we had done everything in our power to provide for our child….or so we thought.
Within a couple of weeks we learned that pathology at that hospital didn’t have a contract with ours or any insurance policy. So even though insurance paid some we were left with huge bills….tens of thousands of dollars worth of bills that the pathologist refused to consider reducing by one dime. We were up to our eyeballs in debt within the first week, we just didn’t know it then. What’s more when you’re inpatient a service like radiology or pathology isn’t contracted out, it’s in house you can’t request another facility. As it happens this was the ONLY pediatric hospital in our area and the ONLY pathologist, so we were screwed no matter what.
Most people have similar type gaps in their policies, but they just don’t know it until they fall into one. I hope none of the readers here ever have that experience, but I assure you mine was quite real. We’re fine, no we didn’t file bankruptcy thankfully my husband has a decent job, but he’s certainly no Warren Buffet. I could certainly see the bills we had sending many families to bankruptcy court, in our case it delayed retirement…thank goodness this all happened before the market crash!
This is happening to more and more families each year, because policies keep adding more and more gaps, plus more and more out of pocket expenses along with rising premiums.
health “insurance” is just an illusion. when you really need it, it vanishes, just like your money.
plus, having health insurance does not guarantee health care. Even if you do have coverage, you may not be able to afford the copays, deductibles and meds and that in itself keeps many from getting health care until they are gravely ill or they need more costly treatments as the illnesses progress untreated.
Sad.
I’m very sorry to read about what has happened with your child. I sincerely hope that she will be OK. I help to support St. Jude, although I know they need much more than I could ever hope to give.
Cancer is a hard battle for adults…for a child…it breaks my heart every single time I hear it happening to a child. I’ve only dealt with child cancer once and it was too much. A neighbors daughter got cancer in her eye and lost it. I couldn’t hold or love that child enough. She wanted me to go to all her treatments with her so I could hold and read to her. It still makes me cry thinking about all that baby had to go through.
It angers me that on top of everything you’re dealing with you have to deal with the medical as well. This whole article angers me. I don’t understand what has happened to the the majority in this nation with compassion for other’s/life.
I am so sorry to hear about your daughter. These stories sadden me and make me angry at the same time. I am especially angry because Obama’s ‘auntie’ has received two operations in Boston-at the finest medical facility available on our dime. She has been defrauding the Commonwealth of Massachusetts for nine years. She lives in HUD housing illegally-not because of her citizenship saga-but because she fraudulently claimed to be eligible for welfare with erroneous information. If it were you or me-we would have been arrested and in jail.
The authorities are well aware of this fraud and refuse to respond-as she refuses to respond.
Your daughter suffers because of her and many like her that are shielded by political connections or outright criminal behavior. I resent having to pay my taxes to support this ongoing charade.
Please be clear my thoughts and prayers are with you and your family.
Pat says…
“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 tragic template above fits a man named Adolfo Flora almost exactly…actually he was not only educated but an educator as well!
A retired teacher…in CANADA. Yes, Toronto to be exact. Single payer guaranteed coverage…yet now he is $455,000.00 in debt to get the lifesaving transplant he needed…and was denied by the insurance system in Ontario (OHIP)
The world’s highest rated health system (per the UN’s W.H.O.) isnt Canada (30th) or ours (37th)or the UK (17th). France is No. 1 , with a hybrid of government regulations and -note well- NOT FOR PROFIT insurance plans.
Make no mistake Pat. I agree that we can do much better in these areas and maybe save a bit of money as well while extending health care to more than we do now (95%?)
Mr. Flora is one of a growing number of similarly defrauded Canadians who are now challenging the system’s shortfalls in court. One might ‘google’ Lindsey McCreith, Shona Holmes and Jacques Chaoulli and see three more examples of WHY ’single payer’
can simply be exchanging one set of frustrations for another…
Pat I do enjoy your essays. Look up the above facts and let me hear your input…
BJ
Well, Obummer has phoned it in for health care. While on his world “Look at me, I am wonderful!” tour, he taped an address to the American people about health care. How very kind of him!! He remembered us!!
http://politicalticker.blogs.cnn.com/2009/06/06/obama-time-to-deliver-on-health-care/#comments
I can’t stand to watch it. Perhaps some of you can. And do you think for one minute that he will ever consider cutting the insurance companies out of the mix?? No, because they are HUGE contributors to his campaigns, and he has one more to run. Or so he thinks. Not to mention the enormous speaking fees I am sure they will generate for him after he leaves office. Got to pay off that debt somehow, right??
medical bills do contribute to bankruptcy,then there is always the biggie.losing the job..
The only thing worse than Obama’s plan is the status quo.
**********
I think it’s is just the opposite. If some half-assed Obama pro-Med insurance plan goes through, it will kill single payer for at least another decade.
I was hoping for real Health care reform. When I took for granted that Hillary would be the next President, I thought we would finally have someone willing, able and caring enough to get it done right. Sadly, witnessing the massive power grab by our Government now, I don’t want them to touch anything of this magnitude. Obama’s history, had anyone cared to tell about it, was to throw money around like crazy while receiving no benefit whatsoever from any project he was involved in. His friends profited, but no one else. Why on earth any idiots wanted to believe anything different about this fraud is way beyond my comprehension. Anything Obama touches is a disaster. I want his grubby paws off our Health care system. We have suffered this long, we can suffer a little longer until someone gets it right. Obama can just keep the seat warm for the real President to come, and in the meantime he can go give his save the world, feel good speeches full of fluff and just stop interfering with matters of real importance.
That’s the biggest problem with Obama, his actions speak much louder than his words. All he has is “just words”.
Which reminds me, once again the cost of Oil is dropping, while the price of oil to consumers is what? Rising…where’s the outrage? What’s Obama doing to protect the consumers whom are already suffering from a recession? (Facetious)Gee, I wonder why Americans are putting 14 to 16 billion dollars less into the economy each month?
Thought for the weekend … Universal coverage will not insure universal access. The Massachusetts experience suggests the opposite will be true.
health “insurance” is just an illusion. when you really need it, it vanishes, just like your money.
*********
I have full insurance. Last year I had semi-urgent surgery, a five day hospital stay, no complications and $31,000 in out of pocket expenses. As the Journal authors say, unless you are wealthy, most Americans are one illness away from bankruptcy. I would say that most of the people defending the insurance companies are paid “shills” or well meaning people who have never had large medical bills.
My 79 y/o brother had a $49,200+ charge from UCLA Santa Monica hospital for a 5-day hospitalization. Medicare and his Anthem Blue Cross secondary insurance covered the entire cost…to my amazement. However, the bills are still streaming in from ambulance services, idividual doctors, and other medical services Fortunately, my brother skimped and saved his whole life to cover his end of life illnesses, whether insurance paid the bills or not.
The so-called health reform stinks and the smell is coming from obama and the congress. Why isn’t obama talking up single-payer? He owes the health insurance industry plus I’m sure he views it as politically risky - for HIM - and that’s all that counts. obama is for obama, nothing else.
Dear Pat Racimora,
I very much appreciate your ‘toon. Your story directly deals with bankruptcy, but it also pertains to this issue: we have lived through a housing bubble during which many folks have used the rising equity in their homes as an “atm machine.” Now that home values have fallen, the “home atm machine” is out of business.
I have seen market analysts, some of whom I respect, criticize the homeowners who have drawn equity out of their houses to pay various bills. As your cartoon suggests, repudiating homeowners for using their equity may be very unjust for the following reasons:
1–You do what you can to get by from week to week.
2–The public has been led to believe that home prices would keep rising, and certainly would not drop like they have.
3–Shit happens–emergencies happen, and you pay for them any way you can.
4–Every case is different. Don’t be too hasty to judge someone else’s circumstances.
Now that I am “older” I have had to laugh because I am forced to choose a medical benefit. I only take two meds. One is not covered at all. It is the generic form of Zanax (sp?) to cover an anxiety-provoked gut problem and the other is bloodpressure med. My Rx insurance pays $1.42 and I pay $6.00 for it. It is such a small amount and I am so lucky to not have real health problems that it is of no material value to me. HOWEVER, it makes me damned angry to think that some SOB thinks he has voted to give me a benefit. We need real health reform and we need it NOW.
Wonderful Cartoon! And, a very important story about the hidden cost related to our current medical payer system. The story shows that even when one has health coverage it does not stop one from ending up having to file for bankruptcy due to medical expenses.
In one sense one could say that the reasons GM and Chrysler had to file for bankruptcy was the greed of management and unions, that they could not resist buying other companies that ended up being unprofitable, and that the cost of health insurance for all including retirees made them unable to compete, forcing them to file for bankruptcy. Other companies also had to lay off employees in order to be able to afford to pay for health insurance and that made them unable to compete with foreign companies where the health insurance for their employees is nonexistent, or covered or subsidized by the government.
Rich
Pat, the volume and diversity of responses to your important cartoon and presentation attest to how complicated and poitically charged the health insurance issue is.
For an interesting defense and promotion of the single player plan, check out the website from Physicians for a National Health Program:
http://www.pnhp.org/facts/single_payer_resources.php
Thanks Don X–This is indeed an excellent resource. It is important that we all understand what a single payer program would be like.
Don, thank you for the link.
I think whatever way Obama chooses to go, there will be winners and losers. I don’t think a single payer program is necessarily going to be better for everyone. But the current system does not work for those uninsured or underinsured.
I do not endorse a single payer system totally but neither do I endorse what we have now. I think reform is needed but am unsure exactly how to mix and match the good parts of both so that everyone can get the care they need. I worry that even with a single payer system, some geographical areas and groups will continue to get limited service & care no matter what proponents say. Then I worry that the current system does not benefit those like my mother with private insurance who is aging and finds medical expenses too much sometimes that I have to financially help her.
Mostly I worry that American taxpayers are going to spend over a trillion dollars implementing some new “program” just to find out years down the road it doesn’t work much better than what we have now in regards to saving money and lives. I don’t care what anyone says I believe the rich and connected or those living in better areas will get more doctors, more hospitals, more cutting edge equipment, quicker referrals and more money spent per patient. Those living in rural, poor or in minority rich areas will continue to have to fight to attract doctors, will have longer waiting times to see doctors or specialists and will have less hospital space. School districts are not funded equally across the board by federal, state or local government, I can’t see how it’d be any different for medical care expenditures per patient.
For an opposing view just for fairness and discussion because there are some interesting points made even though they’d be better served to contrast some of the positives of single pay too:
http://debate-central.ncpa.org/topics/2002/book2.pdf
Pat,
Excellent cartoon.
Nobody Special,
I understand completely.
Two years ag, after diagnosis with a serious liver problem that required a year and a half of brutal treatment, I had to stop working as a music teacher. I had taught in the public school urban trenches for 2 decades. (I sometimes wonder if that’s not what made me so sick!)
Anyway, once I stopped working, I couldn’t afford my house, so I sold it and moved into a teeny cottage in rural NYS. Becuase I cut my expenses by 75% in moving to a poor area, I’ve been able to survive.
But if I had been caught by the sub-prime mortgage meltdown and unable to sell my house just before the whole stack of cards came tumbling down I’m sure I’d either be living under a bridge or dead.
After two years of treatment, I have been ‘cured’ but last week was told I have lymphoma which requires a couple of months of chemo.
It is very difficult to cope with as I finally started working again after the first illness and was just getting back on my feet.
I am grateful that the 2 decades in the teacher retirement system has, so far, given me adequate health coverage. And personally, since I never used the health benefits before and yet paid into them either though direct witholdings or reduced salary, I try not to feel guilty that I can get treatment that others may not be able to
But it is terrifying how close one gets to the economic abyss if unforseen health problems pop up. I am lucky I can manage to live quite happily in a 500SF cottage with few amenitites in a relatively remote location.
Thanks for your story. Everyone needs to understand what could happen. I am continually on edge as the impact of economic issues come closer and closer to my front door.