Medical bills underlie 60 percent of U.S. bankruptcies
Harvard researchers surveyed some 2000 people who filed for bankruptcy in 2007. Their findings:
While only 29 percent directly blamed medical bills for their bankruptcy, 62 percent had medical bills that totaled more than 10 percent of family income, said an illness was responsible, had lost income due to illness or some other medical factor.
Even more shocking is the fact that 78% of these - or almost half of all bankruptcy filings - involved people who had health insurance. These were, in the main, middle class Americans with decent jobs and health insurance, yet a severe illness still throws them into economic distress. Part of the problem, as the report notes, is that too often you're only allowed to buy health insurance if you don't ask for health care:
"Nationally, a quarter of firms cancel coverage immediately when an employee suffers a disabling illness; another quarter do so within a year," the report reads.
And once you've lost it, good luck trying to ever get insurance again with a preexisting condition. So what good is health insurance? Hard to tell from the newspaper accounts of this study and, from the description of the method, I'm not sure this study adequately addresses the question. The key stat would be the proportion of insured families declaring bankruptcy v. the uninsured and I don't think the statistics are here to determine that. I don't find the study available yet at the American Journal of Medicine, but it will be worth taking a closer look at.
Edit: I neglected to point out that this data is from 2007, before the current economic troubles. This situation must be far worse right now.