Medical bills, not credit card debt, are the major reason most Americans are file for bankruptcy.
And the problem just keeps getting worse.
A couple of years ago about half of all bankruptcies were caused by doctor and hospital expenses that families just couldn’t pay.
Now a new study by the Harvard Law School, Harvard Medical School and Ohio University says they caused 62% of all personal bankruptcies filed in 2007.
The most shocking finding is that most of those families weren’t uninsured. They were underinsured.
More than 75% of the families who filed for bankruptcy because of medical bills had health care coverage of some kind. Their insurance simply didn’t pay significant parts of their bills.
Out-of-pocket medical costs averaged $17,943 for medically bankrupt families, with hospital bills usually the single largest expense.
This was not always the case.
As recently as 1981, only 8% of families filing for bankruptcy did so because they couldn’t pay their medical bills.
Today, it seems millions of families are just one illness or accident away from financial ruin.