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Medical Bankruptcy Is Killing The American Middle Class


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A new study has found that a horrifying 530,000 families turn to bankruptcy each year due to medical bills they can’t pay. In the end, it’s easier to declare bankruptcy than to allow oneself to drown in medical expenses.

That’s how you know when a country is broken.

According to researchers of a new study in the American Public Journal of Health (APJH), the “financial toll of illness on American families” has perhaps gone far beyond the one-off anecdotes, such as the Nobel laureate who had to sell his medal to pay for medical bills, or 250,000 GoFundMe medical campaigns last year alone.

The Journal cites the US Consumer Financial Protection Bureau as reporting that medical bills are by far the most common cause of unpaid bills sent to collection agencies in 2014.

When it comes to bankruptcy, the study cited court records of bankruptcy filers from 2013 to 2016, with the end result showing that 66.5 percent were tied to medical issues. In other words, they couldn’t pay their medical bills, either because they were too expensive to begin with, or they had to take time off of work and were not getting paid.

The research also noted that 58.5 percent of bankruptcies were caused specifically by medical bills, while 44.3 percent were caused in part by income loss due to illness.

The fact that 530,000 families are resorting to bankruptcy each year because of medical bills is not likely in the national interest—and it is a problem that has persisted long before and since the Affordable Care Act.

Indeed, "Despite gains in coverage and access to care from the ACA, our findings suggest that it did not change the proportion of bankruptcies with medical causes," the AJPH study noted.

In a press release for the Physicians for a National Health Program (PNHP), Dr. David U. Himmelstein, M.D. said that “unless you’re Bill Gates, you’re just one serious illness away from bankruptcy”.

And your middle-class status won’t save you.

“For middle-class Americans, health insurance offers little protection. Most of us have policies with so many loopholes, copayments and deductibles that illness can put you in the poorhouse,” Himmelstein said.

In fact, bankruptcy due to medical bills is more likely to be the downfall of the middle class that it is the lower classes, with the study’s researchers noting that despite the Affordable Care Act, middle-class Americans have been targeted with increasing copayments and deductibles, while the Act helped the poor, who are regardless more protected from bankruptcy as they have fewer assets and generally do not opt to go through complicated bankruptcy proceedings.

Compounding the problem was the study’s finding that middle-class America could, for all intents and purposes, die out because those who file for bankruptcy based on medical bills were in worse health and were “two or three times more likely to skip needed medical care and medications”.

The answer certainly hasn’t been the Affordable Care Act or anything that’s happened since then.

According to Dr. Steffie Woolhandler, a senior author of the study and a Lecturer in Medicine at Harvard, “The ACA was a step forward, but 29 million remain uncovered, and the epidemic of under-insurance is out of control. We need to move ahead from the ACA to a single-payer, Medicare for All system that assures first-dollar coverage for everyone. But the Trump administration and Republicans in several states are taking us in reverse: cutting Medicaid, threatening to gut protections for the more than 61 million Americans with pre-existing conditions, and allowing insurers to peddle stripped-down policies that offer no real protection.”

By Josh Owens for Safehaven.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.









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