Medical Bankruptcy on the Rise
Last week, researchers at Harvard and Ohio University published new data revealing that, in 2007, 62% of all bankruptcies were related to medical debt. According to the report,
An American family filed for bankruptcy in the aftermath of illness every 90 seconds; three quarters of them were insured.
Since 2001, when the authors last performed this study, "the proportion of all bankruptcies attributable to medical problems has increased by 50%." This trend is unsettling to say the least.
People with health insurance were not protected from medical bankruptcy; in fact, insured Americans made up the majority of medical bankruptcies. Families USA found recently that 82.5% of Americans in families that spend more than 10% of income on health care have health insurance. Dr. David Himmelstein, the lead author, told reporters:
For middle-class Americans, health insurance offers little protection. Most of us have policies with so many loopholes, co-payments, and deductibles that illness can put you in the poorhouse. Unless you're Warren Buffett, your family is just one serious illness away from bankruptcy.
Americans like Linda and Jeffrey Somach can attest to that. According to the Los Angeles Times,
[The Somachs] say $800 a month for health insurance. But the Staten Island, N.Y., couple filed for bankruptcy a month ago when their out-of-pocket medical expenses surpassed $40,000. Linda Somach, a psychologist, can earn $80,000 a year if she sees patients full time. But she had to scale back to care for Jeffrey, who has terminal brain cancer. That reduced their income.
The good news? Leaders in Congress and President Obama recognize the urgency of the situation, and they're working overtime to deliver comprehensive health care reform to Americans. President Obama sent a letter to Senators last week that included this assertive message:
Health-care reform is not a luxury. It's a necessity we cannot defer. Soaring health-care costs make our current course unsustainable. It is unsustainable for our families, whose spiraling premiums and out-of-pocket expenses are pushing them into bankruptcy and forcing them to go without the checkups and prescriptions they need.
Health reform must incorporate affordability protections that cap out-of-pocket medical expenses and prevent medical bankruptcy for American families. Enough is enough