A recent study funded by the Robert Wood Johnson Foundation took a look at the connection between medical bills and bankruptcies in the United States.
The results at a glance:
- More than 62 percent of bankruptcies in 2007 were related to medical bills. This is an increase of approximately fifty percent since 2001.
- More than three-quarters of families who declared bankruptcy due to medical bills DID HAVE health insurance but were still overwhelmed by medical debt.
- More than ninety percent of people with medical debt owed more than five thousand dollars. In many cases, the amount of medical debt was more than ten percent of the family’s annual income.
Researchers from Harvard Law School, Harvard Medical School, and Ohio University surveyed more than two thousand families who filed for bankruptcy during the first part of 2007 — before the current recession began. Results were obtained from phone interviews and review of public bankruptcy court records.
The most troublesome part for me is the fact that many of the people who had to declare bankruptcy due to medical bills had health insurance coverage of some sort. If you think health insurance will protect you, this study may be a wake-up call. People who believe they are protected may still be ending up with thousands of dollars in medical debt after acute or chronic health issues.
Some annual out-of-pocket expenses noted by researchers in the study included:
- $34,167 for a person with multiple sclerosis
- $26,971 for a person with diabetes
- $23,380 for a person who suffered a stroke
- $21,955 for a person with heart disease
I would be very interested to see how these amounts broke down — did the people surveyed require a hospital stay for a health crisis? These numbers probably include the cost of prescriptions and routine physical exams… but is that the amount they spend every year on chronic health issues like MS or diabetes?
I don’t think that my grandmother — who has diabetes and several diabetes-related complications that require care from four different doctors — spends more than $26,000 per year on health care. So I have to wonder what else may have happened in the year studied to make the medical bills so high. Then again, prescription medications (of which my grandmother currently takes eight, for example) can get very expensive. And I wonder what type of insurance coverage the people in this study had — was it through work, was it coverage via a spouse, was it an individual plan?
It is kind of interesting to me that less than thirty percent of the people surveyed directly blamed their medical debt for the bankruptcy — despite medical bills being a factor in more than sixty percent of the bankruptcy cases reviewed for the study. Is it a case of turning a blind eye, or were other debts so large that the medical debts seemed like very little in comparison?
The study was published in the American Journal of Medicine if you’re interested in taking a further look.