Study: 62% of All Bankruptcies are Medical Related
photo by theamericanroadside via flickr
The Los Angeles Times and the Wall St. Journal Health Blog report that a new study by Harvard researchers shows that medical-related bankruptcies have increased. The researchers did a similar study for 2001 which found that medical bills, the loss of wages and cost of care attributed to illness contributed to 55% of bankruptcies. For 2007, the number is 62%.
Importantly, this rise in 2007 comes, as the study authors note, despite Congress having “tightened the bankruptcy laws” in 2005. In addition, the LA Times notes that “the latest study probably understates the current burden of medical expenses because it is based on bankruptcies filed before the recession hit.”
The WSJ Health Blog reports it thus:
Some 62% of all bankruptcies filed in 2007 were due in part to medical expenses, according to a new study. Even more striking: 78% of those individuals had insurance.
Most people hit by such bankruptcies were considered middle-class, college-educated and owned homes, according to the study published online by the American Journal of Medicine. By the time they filed bankruptcy, those without insurance reported average medical bills of $26,971 and those with insurance, expenses of $17,749.
The LA Times reports that
Hospital bills were the largest expense for about half the families that filed health-related bankruptcies.
It would be interesting to know what percentage of those hospital bills were claimed by nonprofit hospitals to be a “community benefit” under 501(c)(3).
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