Many families find themselves managing until a crisis sends them over the edge. "The way people get in trouble is have substantial debt they're managing, they're paying mortgages and paying off credit card balances, but they're managing. Then a shock occurs," said Dr. Steffie Woolhandler, an associate professor of medicine at Harvard Medical School and co-author of a medical bankruptcy paper from the Consumer Bankruptcy Project. "In bankruptcy, in about half of those cases, that shock is a medical shock."
"The shock often takes the form of higher bills. It can also take the form of higher bills and loss of work because you're sick," added Woolhandler, who is an advocate of national health insurance.
This is what happened to Donna Smith and her husband, Larry.
The Smiths, who raised six children together, consistently had employer-sponsored health insurance. Like the Krinskys, however, they began to notice a drift upwards in the cost of premiums as well as higher co-pays and higher deductibles in the 1990s.
"While we were both well, we could absorb that creep," said Donna, formerly a newspaper editor and now a community organizer for the California Nurses Association and the National Nurses Organizing Committee in Chicago.
But then the medical crises set in: Larry was diagnosed with serious artery disease, Donna with uterine cancer.
"Our debt was accelerating, but it wasn't just accelerating in medical debt," Donna said. "What you do is you hang on, you borrow from another place and pay the doctor. It's a balancing act all the time." The Smiths took payday loans, Donna pawned her engagement ring, and they even crawled to relatives.
"I can't tell you how humiliating it is," Donna said. "By the time you've gone through that kind of trauma, you've tapped out the good will of family and friends. You
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