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Study: Medical Bills Behind Most Bankruptcies |
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Crushing medical bills were the major cause of 62 percent of all personal bankruptcies in 2007. Even worse—75 percent of those with medical bill-related bankruptcies had health insurance.
More bad news: The percentages cited above were based on data collected before the nation’s economy began its long nose dive.
Says one of the study’s authors, David Himmelstein, an associate professor of medicine at Harvard Medical School:
Unless you’re a Warren Buffett or Bill Gates, you’re one illness away from financial ruin in this country. If an illness is long enough and expensive enough, private insurance offers very little protection against medical bankruptcy, and that’s the major finding in our study.
The U.S. health care financing system is broken, and not only for the poor and uninsured. Middle-class families frequently collapse under the strain of a health care system that treats physical wounds, but often inflicts fiscal ones.
Researchers from Harvard and Ohio University published the study in the American Journal of Medicine.
In the AFL-CIO’s 2009 Health Care for America Survey, thousands of the more than 23,000 respondents cited the burden of high medical costs, even with insurance coverage, as a major problem facing working families. The survey’s full findings will be released later this month.
In the bankruptcy cases studied, hospital costs accounted for nearly half the medical expenses (48 percent), followed by prescription drugs (18.6 percent), doctor bills (15.1 percent) and insurance premiums (4.1 percent). Medical equipment and nursing home care rounded out the list. Says Himmelstein;
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. And even the best job-based health insurance often vanishes when a prolonged illness causes job loss—precisely when families need it most.
One of the key elements of health care reform backed by President Obama and the AFL-CIO is inclusion of a public health insurance option to enable workers and families who either have private insurance coverage or no coverage to choose between private or public insurance plans. It has been vigorously attacked by the private insurance industry and most congressional Republicans.
Deborah Thorne, associate professor of sociology at Ohio University and a co-author of the study, says medical costs leading to bankruptcy affect families
who have played by the rules of our economic system, and they deserve nothing less than affordable health care.
Click here to find out how you can join the fight for health care reform at one of thousand of events planned tomorrow at private homes or community centers nationwide.
2 Comments
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“Single-payer” universal health insurance must be considered absolutely essential for all working people in this economy where millions are now unemployed and cannot afford any premiums.
Even the discussion of “single-payer” proposals were taken “off the table”
and protesters were thrown out of the Congressional hearing room and would not allow consideration of “single-payer” health care proposals! Doesn’t this alone tell everything about what is happening to so-called health care “reform”?
The suggested promise of the for-profit health care industry to reduce it’s overhead costs and profits over the next ten years to help in the “reform” of health care, is absolute rubbish.
To allow the continued existence of the privatized for-profit health insurance will mean that any “public” option will forever be marginalized, financially impoverished and the quality made so bad that it will fail. (This same tactic is now working to effectively destroy public education.)
The continued inclusion of these health-care gangsters, who have caused the destruction of public health care, will mean again the defeat of the essential needs of the people. This will not be a “reform” of public health care but it’s final destruction.
The AFL-CIO, in it’s uncritical support of the corporatist policies of Obama and the Democratic Party, is failing again to assume it’s leadership role of America’s increasingly impoverished working people.
The attacks on “single-payer” proposals, the lack of an affordable and universal public health system, the destruction public education, are just more symptoms of the economic collapse of gangster capitalism. Obama and the Congress is totally controlled and driven by corporate and capitalist interests to maximize proft and wealth.
The needs of the vast majority of people for peace, health care, education, and jobs that sustain working people and their families, are increasingly to be denied under this failed capitalist economy. The transition to a socialist economy “of, by and for the people” is now essential for the survival of humanity.
Read daily the World Socialist Web Site: http://www.wsws.org
America could use a program to cover these catastrophic illnesses for average income families, so that they don’t have to stiff their caregivers by declaring bankruptcy.
It probably would result in a lowering of average medical fees, because physicians wouldn’t have to set aside reserves to keep their practices going when they get stiffed.
This catastrophic insurance should be funded primarily by a Value-added tax (VAT). Unlike other taxes, international trade agreements allow VATs to be levied on imports and rebated when goods are exports. Because of the advantages VATs give to a country’s manufacuring, over 100 countries use them.
The UAW and thge big 3 auto companies would be in much better shape, if we had been using a VAT instead of Social Security’s FICA payroll tax.
Part of the FICA tax is levied on employee wages, and an equal amount is paid by the employer. Almost all of this revenue is paid out to those already retired. Any surplus is set aside for the future — it is invested in US Treasury bonds.
Because FICA adds to the cost of hiring someone, employers have an incentive to replace people with automation or imported parts.
A VAT would be collected when an employer hired someone. AND, unlike the FICA, the VAT would be collected if the employer used a machine instead of a person. AND, again like FICA, a VAT would be collected when the employer used imported parts. AND, again unlike FICA, a VAT would be collected whenever a consumer bought an import.
Social Security would benefit if automation and imports were paying into it. This is why over 100 countries use VATs.
God Bless America!