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At least 62 percent of all U.S. family bankruptcies result from medical expenses, reports a study released yesterday in The American Journal of Medicine—an increase from the 46 percent the reseachers found in 2001.

Analyzing data from 2,314 randomly selected 2007 (pre–mortgage meltdown) bankruptcy filings revealed that most of those who had claimed bankruptcy because of medical expenses had health insurance, owned homes, were in their mid-40s, and had middle class incomes.

High out-of-pocket expenses for those already insured and the loss of private insurance were the primary reasons for medical bankruptcy, report the study authors—many of whom are active members of Physicians for a National Health Program, a group that advocates for a single-payer system.

"Unless you're Warren Buffett, your family is just one serious illness away from bankruptcy," study author and associate professor of medicine at Harvard Medical School David Himmelstein said in a statement.

Although the proportion of medical costs as a major contributor to bankruptcy appears to be climbing, the total number of U.S. family bankruptcies actually fell by about half during that time period, Megan McArdle points out in her Atlantic Monthly column. So the total number of U.S. medical bankruptcies would have decreased from about 667,000 in 2001 to 451,000 in 2007.

Listen to a podcast about the study.

Image courtesy of iStockphoto/duckycards

7 Comments

1. 1. n7tcf 04:59 AM 6/7/09

   Won't a single payer go bankrupt as well? Universal health-care is a very expensive idea. If the care is limited to 1950s level, it is doable. But if the private insurance market is destroyed, how will the middle-class afford modern technology?
   
   Low cost medical care is not a fundamental right. Let the states experiment and best practices will be evident.

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2. 2. granitet 03:33 PM 6/8/09

   Medical Care is just entering into a time where "information technology" will be the driving force. I think the going forward medical costs should start to be reduced each year as the care gets better. Diagnostic tools will be getting better as will treatment and the costs should be decreasing. Example in 1990 the sequencing of the human genome was a task expected to take 15 years and cost hundreds of millions of dollars, now it is heading toward under $1000.00 and will take a few hours. All diagnostic and treatment should follow this same path better care with less expense. This means medicare will not go broke, but people will live longer and healthier lives.

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3. 3. davisucr 09:04 PM 6/8/09

   Many people think they have insurance until they get a diagnosis like cancer. It is important to have both a stop loss and no maximum in order to survive this disease financially intact. Because insurance is tied to the employer, not being able to work makes the situation worse. Social Security Disability does not make you eligible for Medicare until two years after you start on disability. Cobra lasts18 months. Until this situation is fixed, bankruptcy will add to the stress of devastating illness.

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4. 4. springmcgrath 07:32 PM 6/10/09

   The U.S. spends more per capita than any other first world country and yet 30-40M people are not covered and even those who are covered can risk bankruptcy if they have a major medical incident. It's expected that we will spend 20% of our GDP on health care within 10 years, from 6% 20 years ago. Universal health care is a solution in every first world country and at a lower cost than what the U.S. provides. If I've got a choice between an insurance company or the government rationing my health care, which one would you choose? Free market health care is an oxymoron. Government has decided the price for health care for 20+ years through medicare and medicaid. It's unlikely that system will be unraveled.

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5. 5. commisure 10:54 AM 6/11/09

   I am confused. At the beginning of this, it is stated that "bankruptcy filings revealed that most of those who had claimed bankruptcy because of medical expenses had health insurance, owned homes, were in their mid-40s, and had middle class incomes." Then later on it goes on to state: "
   High out-of-pocket expenses for those already insured and the loss of private insurance were the primary reasons for medical bankruptcy,". Well, it would be helpful to seperate out those with high copays and those without insurance. It is also important to consider that of the 40 plus million that are without insurance, 9-10 million are illegal aliens (undocumented). Another chunk are those that can afford health insurance but choose not to. Also, there are people that are in between jobs and and uninsured on a temporary basis. Sure, there are some people who fall through the cracks and are frankly uninsured but it is far less than the 40 plus million that is frequently quoted. I think that regardless of the system employed that will happen. It comes down to how much do you want to stand our current system on its head to be able to say that "everyone" is insured when most likely there will always be a portion of the population that will not be ...either by lack of inclusion or lack of access.

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6. 6. commisure 10:54 AM 6/11/09

   I am confused. At the beginning of this, it is stated that "bankruptcy filings revealed that most of those who had claimed bankruptcy because of medical expenses had health insurance, owned homes, were in their mid-40s, and had middle class incomes." Then later on it goes on to state: "
   High out-of-pocket expenses for those already insured and the loss of private insurance were the primary reasons for medical bankruptcy,". Well, it would be helpful to seperate out those with high copays and those without insurance. It is also important to consider that of the 40 plus million that are without insurance, 9-10 million are illegal aliens (undocumented). Another chunk are those that can afford health insurance but choose not to. Also, there are people that are in between jobs and and uninsured on a temporary basis. Sure, there are some people who fall through the cracks and are frankly uninsured but it is far less than the 40 plus million that is frequently quoted. I think that regardless of the system employed that will happen. It comes down to how much do you want to stand our current system on its head to be able to say that "everyone" is insured when most likely there will always be a portion of the population that will not be ...either by lack of inclusion or lack of access.

   Reply | Report Abuse | Link to this

7. 7. commisure 10:56 AM 6/11/09

   I am confused. At the beginning of this, it is stated that "bankruptcy filings revealed that most of those who had claimed bankruptcy because of medical expenses had health insurance, owned homes, were in their mid-40s, and had middle class incomes." Then later on it goes on to state: "
   High out-of-pocket expenses for those already insured and the loss of private insurance were the primary reasons for medical bankruptcy,". Well, it would be helpful to seperate out those with high copays and those without insurance. It is also important to consider that of the 40 plus million that are without insurance, 9-10 million are illegal aliens (undocumented). Another chunk are those that can afford health insurance but choose not to. Also, there are people that are in between jobs and and uninsured on a temporary basis. Sure, there are some people who fall through the cracks and are frankly uninsured but it is far less than the 40 plus million that is frequently quoted. I think that regardless of the system employed that will happen. It comes down to how much do you want to stand our current system on its head to be able to say that "everyone" is insured when most likely there will always be a portion of the population that will not be ...either by lack of inclusion or lack of access.

   Reply | Report Abuse | Link to this