Medical Bills Cause 60 Percent of All Bankruptcies

Medical Bills Cause
60 Percent of All
Bankruptcies

Medical Bills Cause 60 Percent of All Bankruptcies – Almost 1.5 Million Filings!

According to a CNN Medical study, of the estimated 1.5 million Americans who will declare bankruptcy in a given year, some 60 percent of those will do so NOT because of overspending on a lavish lifestyle, but because of an avalanche of overwhelming medical bills.

Reading through these studies you find that bankruptcies, due to medical bills, increased by nearly 50 percent in a six-year period, from 46 percent in 2001 to 62 percent in 2007, and most of those who filed for bankruptcy were middle-class, well-educated homeowners, according to a report that will be published in the August issue of The American Journal of Medicine.

According to a study published by the journal Health Affairs, illness and medical bills caused half of the 1,458,000 personal bankruptcies in 2001. The study estimates that medical bankruptcies affect about 2 million Americans annually — counting debtors and their dependents, including about 700,000 children.

Surprisingly, most of those bankrupted by illness actually had health insurance. More than three-quarters were insured at the start of the bankrupting illness. However, 38 percent had lost coverage at least temporarily by the time they filed for bankruptcy. Most of the medical bankruptcy filers were middle class; 56 percent owned a home and the same number had attended college. In many cases, illness forced breadwinners to take time off from work — losing income and job-based health insurance precisely when families needed it the most.

According to a study by the American Journal of Medicine, Sixty-two percent of all bankruptcies filed in 2007 were linked to medical expenses!

According to a Harvard study… Families in bankruptcy suffered many privations — 30 percent had a utility cut off and 61 percent went without needed medical care. The research, carried out jointly by researchers at Harvard Law School and Harvard Medical School, is the first in-depth study of medical causes of bankruptcy. With the cooperation of bankruptcy judges in five Federal districts (in California, Illinois, Pennsylvania, Tennessee and Texas) they administered questionnaires to bankruptcy filers and reviewed their court records.

Dr. David Himmelstein, the lead author of the study and an Associate Professor of Medicine at Harvard commented: “Unless you’re Bill Gates you’re just one serious illness away from bankruptcy. Most of the medically bankrupt were average Americans who happened to get sick.”

Today’s health insurance policies — with high deductibles, co-pays, and many exclusions — offer little protection during a serious illness. Uncovered medical bills averaged $13,460 for those with private insurance at the start of their illness. People with cancer had average medical debts of $35,878.

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