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Another sobering reminder to budget HI/HCC
Old 06-26-2013, 09:21 AM   #1
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Another sobering reminder to budget HI/HCC

Too many mistakenly think they are FI by failing to account for HCC (inc HI, deductibles,copays, etc.). Most recent survey of US bankruptcies again finds medical bills as #1 cause.
Medical Bills Are the Biggest Cause of US Bankruptcies: Study
Interestingly the largest proportions were in the 35-54 age groups. I might have thought it would be 55-64 AG, i.e. AG @ statistically poorer health but not yet on Medicare (inc growing # of ER's who are losing corp retiree HI coverage). Also troubling to me is that many (according to this study) are paying big medical bills using CC's. Adding high-interest CC debt to one's medical bills seems like a prescription for financial ruin. Most HC facilities/providers' billing offices will work with patients to develop payment plans on much more favorable terms than ave CC company.
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Old 06-26-2013, 09:33 AM   #2
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If you have no medical insurance all it take is one medical event and you're broke. I've seen how much they charge at the ER for even a simple thing like putting in some stitches. And if you need a ambulance ride to get there....Its crazy.
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Old 06-26-2013, 10:42 AM   #3
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I didn't see their methodology described. Just how did they determine that medical bills were the 'cause' of bankruptcy?

When you say 'again', I'm assuming you are referring to a news stories about a study published a few years ago. Those stories were debunked by the author of the study. I forget the details, but they took some stuff way out of context, something like if there were any outstanding medical bills at the time of the BK, the news reported that as the cause.

Our medical system is screwed up, and good people are getting pinched financially, but we need good data, not distorted headlines.

Got any background data on this?


-ERD50
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Old 06-26-2013, 01:51 PM   #4
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Quote:
Originally Posted by ERD50 View Post
I didn't see their methodology described. Just how did they determine that medical bills were the 'cause' of bankruptcy?

When you say 'again', I'm assuming you are referring to a news stories about a study published a few years ago. Those stories were debunked by the author of the study. I forget the details, but they took some stuff way out of context, something like if there were any outstanding medical bills at the time of the BK, the news reported that as the cause.

Our medical system is screwed up, and good people are getting pinched financially, but we need good data, not distorted headlines.

Got any background data on this?

-ERD50
I am only making an educated guess, but I like adding distorted thoughts. A survey last week had 46% of all Americans having less than $800 for emergencies. Now we all know medical care is too expensive, that probably is a given. But, if you get sick or are injured, and have a $2500 deductible, miss work for a month, can't pay your bills plus you have credit card debt already and declare bankruptcy; is that assumed to be "cause of bankruptcy"? I wonder how many play out that way in the above scenario. Many would say that I assume, but you could make the argument it was lack of planning for emergencies was the ultimate source of the problem, not medical bills.
Provided of course, one had medical insurance...
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Old 06-26-2013, 02:22 PM   #5
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Those of us with limited expenses and no debt will have less care expense I would imagine and bankruptcy is less likely if you can pay your deductible. DW or I already don't have to worry about "missing w*rk" and have friends to help out on a short-time basis.

Living in another country will reduce this chance as well as some major costs are 1/10 the US...
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Old 06-26-2013, 02:55 PM   #6
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More info on present study's methodology-
NerdWallet Health Estimates 56 Million Americans under 65 will Struggle with Medical Bills in 2013
http://www.cdc.gov/nchs/data/nhis/ea...-june_2012.pdf
http://www.pnhp.org/new_bankruptcy_s...uptcy-2009.pdf
And a (now dated) critique on this issue-
Medical Bankruptcy: Myth Versus Fact

I tend to agree that data supporting these dramatic headlines are controversial regarding med bills as #1 cause of bankruptcies, particularly since most bankruptcies are multi-factorial. But overwhelming data (as well as bankruptcy lawyers' business patterns!) supports large med bills as one of the top causes. Personally- it upsets me that this issue is being used as political fodder to support a single-payer health care system in US. Medical bankruptcy itself is a separate important issue which is not being addressed (inc. by ACA).

My main point was not that med bills were #1 cause of bankruptcy, but that allowance for HI/HCC costs are (or should be) a significant part of every family budget. And by "budget" I do not mean using (typically expensive) CC debt to 'pay' other debt- medical or otherwise. Many here understand that, but apparently too many others do not.
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Old 06-26-2013, 03:04 PM   #7
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edit.add - cross-posted w/ ERhoosier

Ahh, I found my old post on this - almost exactly a year ago:

Article on Health Care in Consumer Reports

edit/add: found the study: http://bit.ly/swQjk6

from the abstract - emph mine...

Quote:
BACKGROUND: Our 2001 study in 5 states found that medical problems contributed to at least 46.2% of all bankruptcies. Since then, health costs and the numbers of un- and underinsured have increased, and bankruptcy laws have tightened.

METHODS: We surveyed a random national sample of 2314 bankruptcy filers in 2007, abstracted their court records, and interviewed 1032 of them. We designated bankruptcies as “medical” based on debtors’ stated reasons for filing, income loss due to illness, and the magnitude of their medical debts.

RESULTS: Using a conservative definition, 62.1% of all bankruptcies in 2007 were medical; ...
So that's a pretty lax criteria - I imagine if someone gambled away $100,000 and had a $10,000 medical bill, their 'stated reason' for bankruptcy would likely be the medical bill.

-ERD50
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Old 06-26-2013, 08:27 PM   #8
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Originally Posted by ERD50 View Post
..... - I imagine if someone gambled away $100,000 and had a $10,000 medical bill, their 'stated reason' for bankruptcy would likely be the medical bill.

-ERD50
Agree. Studies of bankruptcies are clearly difficult since some folks will always find something to blame other than the truth. But as a wise man once said, "you cain't fix stoopid"
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