Money Sense Tips

According to a new study reported in CNN, more than 60% of all bankruptcies in the United States are due to medical reasons, with many of those people being health-insured middle class people of good education.

The findings of the study, released online Thursday in The American Journal of Medicine, potentially downplay the full scope of the issue since that data was gathered prior to the current economic crisis. In 2007, medical problems contributed to 62.1% of all bankruptcies. Between 2001 and 2007, the proportion of all bankruptcies attributable to medical problems rose by about 50%.

This findings have clearly illustrated that hospital bills made up the biggest single expense for nearly 50% of the medically-bankrupt families; with prescription drugs representing the greatest expense for 18.6 percent families.

According to the report, a number of conditions prompted a large number of middle-class, insured Americans into bankruptcy.

For 92% of the medically bankrupt, high medical bills instantly added to their bankruptcy. A lot families with regular 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 people with private insurance at the outset; $14,633 for those with Medicaid; $12,021 for those with Medicare; as well as $6,545 for people with VA/military coverage. For patients who at first had private coverage however lost it, the family’s out-of-pocket expenses averaged $22,568.

The study may further emphasize the urgency behind policymakers’ attempts to overhaul the country’s health care system. Congress has started outlining what health care advocates hope will be comprehensive legislation that addresses the high cost of medicine as well as lessening access to quality health care, especially among the poor and uninsured.

[Source: CNN]