Medical debt causes bankruptcies.

A recent study completed by Harvard University on medical debt and bankruptcies shows a very large increase over the last six years in personal bankruptcy filings that are caused in large part by ever-higher medical expenses, medical bills, and families trying to pay off medical debts.

The results of the study show that medical debts and bills, when taking in combination with the problems that result from illnesses, such as lost wages for the sick and their caregivers, has contributed to over 60% of all personal bankruptcies filed in 2007.

The fact of the matter is that medical insurance isn't much help, either. The study goes on to show that about 80% of bankruptcy filers did have health insurance. Only 20% of those who filed bankruptcy did not have insurance.

It is important to note that medical expenses were not the only cause for these bankruptcies, but the study does show them as being an important, contributing factor. The increase in the bankruptcy filings occurred despite a 2005 federal government law that was put into place making it more difficult for individuals to seek court protection from creditors for debts, including medical debts.

 

 

 

File bankruptcy if have health insurance

Those that declared bankruptcy and that had private insurance had average medical bills of almost $18,000. Compare that to people who filed for bankruptcy without any health insurance. They had medical expenses of almost $27,000. Many of these people put their bills on their credit cards. Find ways to eliminate medical and credit card debt.

The majority of the people who filed medical expense related bankruptcies were middle class before illness hit, causing a financial disaster. Two-thirds were homeowners, and most had gone to college and had a college degree.

If you look at certain medical condition, those individuals who seeked help from a bankruptcy filing and that had neurological disorders and diabetes, including multiple sclerosis, had the highest medical bills, and they averaged $27,000 for those with health insurance and almost $35,000 for those without health insurance. Hospital bills were the largest type of medical expense for about half the families that filed health care related bankruptcies.

One of the conclusions of the study was that health insurance does not necessarily help. It shows that health insurance is not a guarantee that a sickness won't bankrupt you. The primary reasons being that lots of health insurance comes with deductibles, big co-payments, and high priced uncovered services. So many people find themselves insured and still end up with big medical bills.