Medical bankruptcies

Every time I bring up statistics on medical bankruptcies, I brace for a fight.  Here’s the deal.  No one ever goes bankrupt from one thing and one thing only.  So it’s impossible to determine, in any truly objective and perfect way, if a bankruptcy is a medical bankruptcy.  If you are $20,000 in debt and you have $10,000 in medical debt, is it a medical bankruptcy?  Does it matter if it’s the final expense that breaks you?  What if you pay off all your medical bills, so have no medical debt, and because of that you have tons of other debt which bankrupts you?  Like all research, there are imperfections in the studies that look at this issue.

But good studies, peer-reviewed studies, acknowledge these limitations, try to be the best they can, and let you be the judge.  Here’s the results from such a study:

Using a conservative definition, 62.1% of all bankruptcies in 2007 were medical; 92% of these medical debtors had medical debts over $5000, or 10% of pretax family income. The rest met criteria for medical bankruptcy because they had lost significant income due to illness or mortgaged a home to pay medical bills. Most medical debtors were well educated, owned homes, and had middle-class occupations. Three quarters had health insurance. Using identical definitions in 2001 and 2007, the share of bankruptcies attributable to medical problems rose by 49.6%.

Over 60% of bankruptcies are medical; 75% of those are for people who had health insurance.

Many of you will cry foul and cite studies (are they in peer-reviewed journals?) that say it’s less.  Personally, I don’t care.  Any is too many.

Yesterday, the Senate Judiciary Committee held hearings on medical bankruptcy.  A Hudson Institute Senior Fellow tried to testify that reform will increase bankruptices.  Senator Franken… well watch for yourself:

By the way, although he did an admirable job on the cherry-picking argument, he could have crushed her with this answer to the survival rates talking point.

(h/t Think Progress)

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