New Research Shows Bulk of Bankruptcies Filed Due to Medical Bills and Illness

New Research Shows Bulk of Bankruptcies Filed Due to Medical Bills and Illness

An estimated 25,227 companies filed for bankruptcy in the second quarter of 2016 alone. And while the business climate continues to be rocky, new research from Eureka Alert has revealed that bankruptcy filings on a personal level are on the rise as well. But what’s more, the bulk of these bankruptcies have one element in common: medical bills.

 

These statistics were published as the results of a study from an editorial in the American Journal of Public Health. Past results have revealed that bankruptcies resulting from unpaid medical bills affected an estimated 2 million people in the United States during 2013, but the updated findings indicate that approximately 530,000 families suffer from bankruptcies linked to illness or medical bills each year.

 

The study was carried out by a team comprised of two doctors, two lawyers, and a sociologist from the Consumer Bankruptcy Project (CBP). A random sample of 910 Americans who filed for personal bankruptcy between 2013 and 2016 were surveyed and had their court records abstracted. In total, bankruptcy debtors reported that healthcare bills contributed toward 58.5% of bankruptcies. Income loss related to illness contributed to 44.3% of bankruptcies.

 

It also doesn’t help that an estimated 15% of the world’s population is currently living with a disability, and American workers are struggling to find jobs that offer a livable wage and adequate healthcare coverage. The authors of the study are quick to note that “medical bills frequently cause financial hardship, and the U.S. Consumer Financial Protection Bureau reported that they were by far the most common cause of unpaid bills sent to collection agencies in 2014, accounting for more than half of all such debts.”

 

Of course, bankruptcies do occur for other reasons. Even home costs are on the rise: in fact, the typical home is a 3-bedroom, 2.5-bathroom house with 1,800 square feet and a price tag of $200,000. But as a whole, the study provided some insight into the endless cases of inherent lack of affordable healthcare access that cause financial ruin.

 

“Bankruptcy may provide a fresh start, but it comes at a high financial and emotional cost for those who file. Filing for bankruptcy can stop the financial bleeding that the health care system imposes, but curing that system’s ills is the only lasting solution,” noted study co-author Robert M. Lawless, the Max L. Rowe Professor of Law at the University of Illinois College of Law.

Dr. Steffie Woolhandler, an internist in the South Bronx, Distinguished Professor at CUNY/Hunter College, Lecturer in Medicine at Harvard and senior author of the study, also noted the urgent and growing need for a single-payer, Medicare for All system. Several of the study’s co-authors have founded Physicians for a National Health Program, a nonprofit education and research organization with more than 22,000 members in support of single-payer national health insurance. However, the PNHP did not fund this study.

First-dollar coverage needs to be assured for everyone, Dr. Woodhandler said, yet the Trump administration and Republicans in numerous states are cutting Medicaid and threatening to pull back protections for upwards of 61 million Americans who have pre-existing conditions.

 


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