bank rates credit cards insurance finance calculators

Medical bills now cause 62% of all bankruptcies

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 doctorBankruptcy Court 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.

Comments (2)
1 Star2 Stars3 Stars4 Stars5 Stars (5 votes, average: 5.00 out of 5)
2 Existing Comments
  1. marc said:
    on August 25th at 02:51 am

    Anyone actually happy with the current healthcare “system” today in the U.S., either has unlimited resources with money to burn, or has never needed medical attention.
    Where does it say in the Constitution that BIG INSURANCE has some god given right to exploit us for the maximum profit possible.
    Government is the only entity powerful enough to break the strangle hold insurance companies have on all of us.
    Talk about “Government Rationing” makes me laugh…as if every private insurance company today isn’t absolutely committed to standing between the patient and the care they need.

  2. Norma said:
    on January 20th at 02:15 pm

    As a bankruptcy attorney I constantly see this unfortunate situation where a family member gets sick and insurance doesn’t cover a lot of the necessary expenses. These families end up having to file for bankruptcy protection because of the mounting medical costs and the ongoing need for medical care that is not covered by insurance. It is unfortunate that while these people are fighting and illness or disease they have to be worrying about how they will get medical treatment or cover their costs.