Illness and medical bills cause half of all bankruptcies | Science Blog

Illness and medical bills cause half of all bankruptcies | Science Blog: "Medical problems contributed to about half of all bankruptcies, involving 700,000 households in 2001, according to a story published today as a Web Exclusive by the journal Health Affairs. Families with children were especially hard hit-about 700,000 children lived in families that declared bankruptcy in the aftermath of serious medical problems. Another 600,000 spouses, elderly parents and other dependents brought the total number of people directly affected by medical bankruptcies to more than two million annually.

Surprisingly, most of those bankrupted by medical problems had health insurance. More than three-quarters were insured at the start of the bankrupting illness. Among those with private insurance, however, one-third had lost coverage at least temporarily by the time they filed for bankruptcy. Often illness led to job loss, and with it the loss of health insurance. Out-of-pocket medical costs (for co-payments, deductibles and uncovered services) averaged $13,460 for those with private insurance at the onset of their illness, vs. $10,893 for the uninsured. The highest costs - averaging $18,005 - were incurred by those who initially had private coverage but lost it in the course of their illness. Many families were bankrupted by medical expenses well below the catastrophic thresholds of high deductible plans that are increasingly popular with employers. The authors comment that even their own coverage from Harvard leaves them at risk for out-of-pocket costs above levels that often led to medical bankruptcy."