New York, NY, June 4, 2009 In 2007, before the current economic downturn, an American family filed for bankruptcy in the aftermath of illness every 90 seconds; three-quarters of them were insured. Over 60% of all bankruptcies in the United States in 2007 were driven by medical incidents. In an article published in the August 2009 issue of the American Journal of Medicine, the results of the first-ever national random-sample survey of bankruptcy filers shows that illnesses and medical bills contribute to a large and increasing share of bankruptcies. The share of bankruptcies attributable to medical problems rose by 50% between 2001 and 2007.
Following up on a 2001 study in 5 states, where medical problems contributed to at least 46.2% of all bankruptcies, researchers from Cambridge Hospital/Harvard Medical School, Harvard Law School and Ohio University surveyed a random national sample of 2,314 bankruptcy filers in 2007, abstracted their court records, and interviewed 1,032 of them. They designated bankruptcies as "medical" based on debtors' stated reasons for filing, income loss due to illness and the magnitude of their medical debts.
Using identical definitions in 2001 and 2007, the share of bankruptcies attributable to medical problems rose by 49.6%. The odds that a bankruptcy had a medical cause were 2.38 fold higher in 2007 than in 2001.
According to the study, a number of circumstances propelled many middle-class, insured Americans into bankruptcy. For 92% of the medically bankrupt, high medical bills directly contributed to their bankruptcy. Many families with continuous coverage found themselves under-insured, responsible for thousands of dollars in out-of-pocket costs. Out-of-pocket medical costs averaged $17,943 for all medically bankrupt families: $26,971 for uninsured patients; $17,749 for those with private insurance at the outset; $14,633 for those with Medicaid; $12,021 for those with Medicare; and $6,545 for t
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Elsevier Health Sciences