Nearly two out of three bankruptcies stem from medical bills, and even people with health insurance face financial disaster if they experience a serious illness, a new study shows.
The study released last week and published online by The American Journal of Medicine, may even underplay the dire reality since the data were collected before the current economic crisis. In 2007, medical problems contributed to 62.1 percent of all bankruptcies. Between 2001 and 2007, the proportion of all bankruptcies attributable to medical problems rose by about 50 percent.
The data on medical bankruptcy, compiled by researchers at Harvard Law School, Harvard Medical School and Ohio University, is based on a survey of 2,314 randomly selected bankruptcy filers during early 2007.
Among families who were bankrupted by illness, those with private insurance reported average medical bills of $17,749 compared to those who were uninsured, who faced an average of $26,971 in medical costs. Those who had health insurance but lost it in the course of their illness reported average medical bills of $22,568. Hospital costs accounted for about half the expenses (48 percent), followed by prescription drugs (18.6 percent), doctor’s bills (15.1 percent) and insurance premiums (4.1 percent). Medical equipment and nursing home care rounded out the list.
The health problems that left patients with the highest out-of-pocket expenses were ranked as follows:
- Neurologic (i.e., multiple sclerosis): $34,167
- Diabetes: $26,971
- Injuries: 25,096
- Stroke: $23,380
- Mental illnesses: $23,178
- Heart disease: $21,955
How bad are things in Colorado? We’re now among the top 10 states in the nation with the highest rates of employed people without health insurance. There are 450,000 Colorado workers who don’t have health care insurance.