The growing number of people whose medical problems have driven them to bankruptcy is one group that puts a face on both the economic and healthcare issues this election year. A 2005 study from researchers at Harvard University and Ohio University published in Health Affairs found that medical expenses drove about half of personal bankruptcies (an estimated 1.9 to 2.2 million filers and dependents in 2001). The researchers found that the average out-of-pocket costs from the onset of illness for these people totaled $11,854. Of those citing medical contributors to their bankruptcy, more than one-quarter cited illness or injury as a specific reason for bankruptcy. About the same percent cited medical bills in excess of $1,000. The researchers note that a lapse in medical coverage within two years prior to filing bankruptcy was a strong predictor of a medical cause of bankruptcy. What might seem surprising is that more than 75 percent of medical debtors had insurance at the onset of illness. The researchers conclude that broad reforms are needed to address these problems. “Even universal coverage could leave many Americans vulnerable to bankruptcy unless such coverage was much more comprehensive than many current policies,” they write. “As in Canada and most of western Europe, health insurance should be divorced from employment to avoid coverage disruptions at the time of illness.”


MEDICAL CAUSES OF BANKRUPTCY, 2001



Source: David U. Himmelstein, Elizabeth Warren Deborah Thorne, and Steffie Woolhandler "Illness and Injury as Contributors to Bankruptcy, Health Affairs, February 2, 2005