Not only are most personal bankruptcies due to medical bills beyond the ability of the consumer to pay, but most of the households declaring bankruptcy for this reason do so despite having health insurance coverage.
Researchers from Harvard Law School, Harvard Medical School, and Ohio University reported 60 percent of personal bankruptcies in the United States involved medical bills, an increase of 50 percent over the past six years. Furthermore, seventy-five percent of those bankruptcies were claimed despite having health insurance, intended to cover medical expenses and prevent unaffordable bills.
The researchers indicated that only 29 percent of those who declared bankruptcy explicitly cite medical bills as the cause, but the 60 percent figure includes households with medical bills totaling more than 10 percent of family income.
Health insurance appears to be useless when it is most needed. Twenty-five percent of insurance companies cancel coverage immediately when an individual covered suffers a disabling illness. Within a year, another twenty-five percent of insurers cancel coverage.
Even with medical coverage, here are the average bills, out of pocket, for some of the most expensive conditions:
- Multiple sclerosis: $34,167
- Diabetes: $26,971
- Injuries: $25,096
- Stroke: $23,380
- Heart disease: $21,955
The study was funded by the Robert Wood Johnson Foundation and will appear in the August edition of the American Journal of Medicine.
Medical bills underlie 60 percent of U.S. bankruptcies: study, Reuters, June 4, 2009