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Illness triggers half of bankruptcies
I know we just had a lengthy health care discussion a couple weeks ago, but I thought this was an interesting study that just came out, showing major middle class health care issues.
Source: Chicago Sun Times
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| Illness triggers half of bankruptcies February 2, 2005 BY LORI RACKL Health Reporter When Annette Ayers took her asthmatic son Noel to the emergency room, she had no idea it would eventually land her in bankruptcy court. The single mom from Harvey said the $5,000 in medical bills that stemmed from her son's three-day hospital stay sent her spiraling into debt. A collection agency took $300 a month from her modest paychecks. Ayers started to miss mortgage and car payments. In 2003, four years after her son's hospital stay, Ayers declared bankruptcy. "I tried to pay but it was just too much," said Ayers, 45. "Once you get behind, it's hard to catch up. I had no other choice." A new Harvard study of bankruptcy cases shows Ayers' plight is all too common. Medical bills and illnesses are a major cause of roughly half of this country's personal bankruptcies, according to the study published today on the Web site of the journal Health Affairs. Touted as the first in-depth analysis of medical causes of bankruptcy, the study looked at 1,771 court records of people who filed for bankruptcy in 2001 in five federal districts, including one in Illinois. More than half of those bankruptcy filers were interviewed in detail about their finances and health. The researchers determined that 46.2 percent to 54.5 percent of the nearly 1.5 million personal bankruptcy filings in 2001 could be chalked up, in large part, to medical problems. "Unless you're Bill Gates, you're just one serious illness away from bankruptcy," said Dr. David Himmelstein, lead author of the study and associate professor of medicine at Harvard. "Most of the medically bankrupt were average Americans who happened to get sick. Health insurance offered little protection." Mostly middle-class problem The researchers estimated that some 40,168 of Illinois' 79,777 personal bankruptcies last year were medical bankruptcies, affecting 111,544 debtors and their families. The study found that the majority of medical bankruptcy filers nationwide were middle-class homeowners with some college education. They usually had health insurance, too. More than 75 percent of people in medical bankruptcy were insured when they first got sick. "Families with coverage faced unaffordable co-payments, deductibles and bills for uncovered items like physical therapy, psychiatric care and prescription drugs," Himmelstein said. "And even the best job-based health insurance often vanished when prolonged illness caused job loss -- precisely when families needed it most." The study's findings are especially troubling as more Americans get their coverage from consumer-driven health insurance plans that can carry large deductibles, leaving them vulnerable to hefty medical expenses, said study co-author Dr. Steffie Woolhandler. Insurance often inadequate "A larger share of American workers are going to have insurance that's like a paper umbrella," Woolhandler said. "It looks good, and it might even protect you in a sprinkle, but it melts away in a downpour." Among those whose illnesses led to bankruptcy, out-of-pocket medical costs averaged $11,854. Cancer proved to be a costly diagnosis, with the average patient racking up $35,878 in expenses. Jeff Morris, resident scholar for the American Bankruptcy Institute in Virginia, said the Harvard study "confirms a lot of people's assumptions about the causes of bankruptcy." Medical bills don't have to be in the tens of thousands of dollars to destroy a family's finances, he said. For people without much buffer between income and expenses, "a $3,000 or $5,000 loss can be a pretty catastrophic number," Morris said. People often resort to getting by on high-interest credit cards. "In a short time," he said, "that amount of debt can be impossible to get out from under, absent some kind of bankruptcy relief." |
Re: Illness triggers half of bankruptcies
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| Originally posted by wolverine16 I work at a law office dealing with bankruptcy & foreclosure law and foreclosures have been skyrocketing as well the last few years, especially last month. Thoughts? |
It's not that I'm not sympathetic--I certainly am. I just don't think government is the cure. Certainly not the first line of defense.
If a person has a car accident and has no insurance and is subsequently rendered in the same capacity, should it be the government's obligation to provide auto insurance to everyone as well? IMO, thinking with emotions takes a lot of objectivity out of a debate.
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| Originally posted by Shakka It's not that I'm not sympathetic--I certainly am. I just don't think government is the cure. Certainly not the first line of defense. If a person has a car accident and has no insurance and is subsequently rendered in the same capacity, should it be the government's obligation to provide auto insurance to everyone as well? IMO, thinking with emotions takes a lot of objectivity out of a debate. |
Man, you guys are harsh. I really don't think being concerned about this is based on emotions, but if that's the case, explain again why you advocated $300 billion+ for Iraqi democracy? Not really seeing any greater benefits to the lives of Americans from that. This is really a problem within our economy if more people with jobs in the middle class are filing for bankruptcy, no different than being concerned if the unemployment rate is rising. No the government shouldn't give everyone car insurance but a sharp increase in hard working people choosing whether to afford being alive or keeping your home is a problem. You don't think anything at all should be tried to stop this trend? Any thoughts of non-government remedies short of not giving birth to children that could potentially become sick? One reason I am concerned about something like this is it could happen to me or anyone else just as easily.
*Allow doctors to treat patients the way they see fit, not the way that is least likely to get them sued.
*Allow doctors/health care providers to turn away those who do not need care.
*Create penalties for chronic abusers.
*Get rid of ridiculous government regulations/paperwork.
*Allow charities to care for those in need, not the government.
*Tort reform.
*Reform senior citizen programs to cover those in need, not those who meet an age requirement.
*Put a cap on drug prices, like every other industrialized nation, or force drug companies to remove the cap in other countries.
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| Originally posted by NeoPhono *Allow doctors to treat patients the way they see fit, not the way that is least likely to get them sued. *Allow doctors/health care providers to turn away those who do not need care. *Create penalties for chronic abusers. *Get rid of ridiculous government regulations/paperwork. *Allow charities to care for those in need, not the government. *Tort reform. *Reform senior citizen programs to cover those in need, not those who meet an age requirement. *Put a cap on drug prices, like every other industrialized nation, or force drug companies to remove the cap in other countries. |
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| Originally posted by St_Andrew actually i agree with all that |
I cannot believe that the richest country in the world actually makes people pay to get medical treatment!!!!
Surely the answer to this is to have a national health service like the European countries do?
Or would that be too "communist/authoritarian" for you to swallow?!
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| Originally posted by George Smiley I cannot believe that the richest country in the world actually makes people pay to get medical treatment!!!! Surely the answer to this is to have a national health service like the European countries do? Or would that be too "communist/authoritarian" for you to swallow?! |
The European healthcare system is doomed due to its own population shift. In some countries, such as Italy, the death rate has now eclipsed the birth rate, and a top-heavy population of elderly cannot be supported by such a small working population. In most European countries where this has not already happened, it is beginning to. To say that the socialized healthcare system of Europe and other countries is problem-free is absurd, but wait another 20 years and we'll see the true staying-power of a pyramid-sceme funding plan that is being turned upside down.
Keep the costs as low as possible and allow the individual to pay for his own healthcare. The only system that works. I can afford to pay for myself, but I can't pay for 2 or more retired elderly individuals or those "in need" who cannot.
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| Originally posted by NeoPhono The European healthcare system is doomed due to its own population shift. In some countries, such as Italy, the death rate has now eclipsed the birth rate, and a top-heavy population of elderly cannot be supported by such a small working population. In most European countries where this has not already happened, it is beginning to. To say that the socialized healthcare system of Europe and other countries is problem-free is absurd, but wait another 20 years and we'll see the true staying-power of a pyramid-sceme funding plan that is being turned upside down. Keep the costs as low as possible and allow the individual to pay for his own healthcare. The only system that works. I can afford to pay for myself, but I can't pay for 2 or more retired elderly individuals or those "in need" who cannot. |
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| Originally posted by NYGblue I would read what the Economist had to say about European Healthcare... They clearly seem to disagree with you and so do I. |
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| Originally posted by wolverine16 I would also offer that the U.S. is near the bottom of industrialized countries in terms of life span and infant mortality rates. I agree with Neo Phono that some of his ideas would cut healthcare costs though in our current system. |
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| Originally posted by NYGblue Cutting costs is fine, but even most economists agree that the market doesn't best serve the interest of society at large in some cases. Healthcare and Education are clearcut examples, and Economists seem to have no problem noting it. AMERICAN economists to be specific. Of course, Americans won't support that b/c they, unlike other societies have a terrible problem paying taxes under this fake notion of earning... Admittedly it is annoying when someone says they are paying you X amount but you receive Y amount due to taxes... its a bit of a mindfuck. However, Y is what you are really getting and should think of it that way. Though talking about changing the attitudes of people is a huge stretch so I will leave it at that. |
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| Originally posted by wolverine16 Blue, I'm totally with you. I personally believe everyone willing to work and make this country better and do their part has a right to healthcare, education, shelter and food. This story has gotten a lot of attention in the media today, because generally the mindset is people can't afford to pay bills because they are not self sufficient and responsible, where this is pointing out that a lot of people who go to work every day and take responsibility can fall deep into debt and lose what they worked for very easily. I'm also agreeing though with the mindset that you set forth that many have, which is why we can't make all this happen at present, despite that those numbers on Sweden's healthcare looked pretty good that were cited in a previous thread. I'm agreeing with Neophono on some of the points he made, because they would help cut costs within the system we currently have and would be possible within the current political climate. Essentially it would be an improvement to at least some degree if some of those things were implemented. |
I came across this image upon debating Trance-Xer in another thread about the debt....
I don't know how accurate it is, but from my other research its not too far off.
All I say is whoever thinks the USA doesn't have a government health care program look at this:
Pardon me if I'm not one that believes throwing money at the problem will fix it.
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| Originally posted by Yoepus I came across this image upon debating Trance-Xer in another thread about the debt.... I don't know how accurate it is, but from my other research its not too far off. All I say is whoever thinks the USA doesn't have a government health care program look at this: Pardon me if I'm not one that believes throwing money at the problem will fix it. |
Oh another thing - I recall seeing a 60 minute show or similar about this issue a couple months back.
The conclusion they raised and this survey nudges to this, is that health care is very affordable for every but the middle class in the USA.
The rich can afford it and the poor can afford it.
Rich goes without saying. Poor - if you are poor in the states and need healthcare there are tons of funds at your disposal, you will often come out even with serious long-term disease/accidents that need physical therapy and the like for next to nothing.
But if you earn say $1000 or so higher... You are instantly disqualified for many of these government programs. Basically everybody in the USA but the mid-low middle class is covered in one way or another.
Well the debate we had a couple weeks ago brought up that countries with universal health care pay less per person in total than we do between government and private insurance expenditures. The others have longer life spans, but wind up visiting the doctor less frequently. Lots of different ways to speculate how that's possible.
While I don't advocate socialism, I do appreciate our Healthcare system here in Canada.
(I even had to use it to call an ambulance for my wife about a month ago) 
It's the people that abuse it that I don't like...
I remember a study regarding sickness and how 2/3 of all patients in hospitals don't need to be there.
Someone know the one I'm talking about?
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| Originally posted by Yoepus the mid-low middle class |
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| Originally posted by NeoPhono The European healthcare system is doomed due to its own population shift. In some countries, such as Italy, the death rate has now eclipsed the birth rate, and a top-heavy population of elderly cannot be supported by such a small working population. In most European countries where this has not already happened, it is beginning to. To say that the socialized healthcare system of Europe and other countries is problem-free is absurd, but wait another 20 years and we'll see the true staying-power of a pyramid-sceme funding plan that is being turned upside down. Keep the costs as low as possible and allow the individual to pay for his own healthcare. The only system that works. I can afford to pay for myself, but I can't pay for 2 or more retired elderly individuals or those "in need" who cannot. |
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| Originally posted by George Smiley I cannot believe that the richest country in the world actually makes people pay to get medical treatment!!!! |
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| Originally posted by George Smiley Did you just make that up?! Anyway, even if that is true, it makes no difference, cos the old people wont be able to afford medical insurance so either way they are fucked |
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| January 4, 2005 OP-ED COLUMNIST A Tale of 2 Systems By DAVID BROOKS Over the past 50 years, we've been having a big debate over two rival economic systems. Conservatives have tended to favor the American model, with smaller government and lower taxes, but less social support. Liberals have supported programs that lead to the European model, with bigger government, more generous support and less inequality. I wonder if that debate is about to change. In the next few decades both models are going to confront a big test: aging populations. The U.S. model is going to be challenged by this problem, but the European model is flat-out unsustainable. Populations in the U.S. and Europe are both aging, but Europe is aging faster. According to the O.E.C.D., the dependency ratio - defined as the number of people over 65 as a percentage of the number of people 20 to 64 years old - will rise to 37 percent from 22 percent in the United States by 2050. But it will go up to 52 percent from 26 percent in the European Union. In addition, European public pensions are more generous and retirees are more reliant on them. To sustain these programs, European government spending will have to rise. According to the European Commission, demographic trends will push public spending up by five to eight percentage points of G.D.P. in the E.U.'s 15 richest members. In Germany, public spending on pensions will rise from an already huge level, 10.3 percent of G.D.P., to 15.4 percent by 2040. And that's after recent benefit cuts. To pay for all of this, taxes will rise and public debt will increase. A Standard & Poor's survey predicts that France and Germany could see their public debt grow to more than 200 percent of G.D.P. by 2050. Europe may find itself locked into a vicious circle: an aging population means more public spending, which means higher taxes, which means lower growth, which means higher unemployment, which means more public spending, which means more taxes and even lower growth. The former Dutch prime minister, Wim Kok, recently released a scathing report that found that "the pure impact of aging populations will be to reduce the potential growth rate of the E.U. from the present rate, of 2 percent to 2.25 percent, to around 1.25 percent by 2040." Already, high European taxes make the European model look obsolete. European and U.S. workers are about equally productive per hour worked. But Americans work 50 percent more than Germans, French and Italians. In the 1970's, Western Europeans actually worked more than Americans. But as taxes rose and incentives to work diminished, Europeans cut back their hours or dropped out of the labor force. Some economists, like the Nobel laureate Edward Prescott, believe higher tax rates explain the drop in work. Others believe cultural preferences also played a big role. Either way, high taxes have made Europe less productive just as it needs high output to support its retirees. Partly as a result, European economies have underperformed for a generation now. As Olaf Gersemann has pointed out, the U.S. economy has enjoyed an annual real growth rate of 2.9 percent over the past 25 years. That's 55 percent more than western Germany, 48 percent more than France and 39 percent more than the E.U. as a whole. Back in the 1970's, European standards of living were catching up to U.S. standards. Now American G.D.P. per capita is about 30 percent higher than Europe's and the gap, if anything, is getting wider. Which brings us to the current moment. In Europe, everybody is aware of the problem, but the remedies are so bad that most countries avoid them. Meanwhile, we in the United States are embarking on our own debate over the future of Social Security. Many liberals are claiming that we don't need to fundamentally revamp our system because there is no crisis. To the extent that's true, it is because we have not been taking their advice for the past 50 years. We have stuck with a low-tax, high-growth economic model. This gives us the resources and the flexibility to deal with the problems caused by an aging population without having to face, at least for now, the horrific choices that confront our friends across the Atlantic. The question is: Will we leave our children a system as flexible, dynamic and productive as the one that was, fortunately, left to us? Or, by doing nothing, will we succumb to the same ineluctable pressures that now afflict Europe, and find that we are immobilized at the exact moment China and India are passing us by? |
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