Results from a national survey of bankruptcy filers, conducted by researchers led by those at Harvard University, show that in 2007, 60% of all bankruptcies in the United States were driven by sickness and related medical bills. Most surprising was that the study showed many filers began their ordeal with employer-sponsored health insurance.
The investigators surveyed a random national sample of bankruptcy filers in 2007, studied their court records, and then interviewed these financially strapped people. Bankruptcies were designated as "medical" based on the stated reasons for filing, income loss due to sickness, and the amount of medical bills owed. The researchers found that the share of bankruptcies caused by medical problems had soared by almost 50% between 2001 and 2007. In fact, the chances a bankruptcy had a medical cause were 2.38 times higher in 2007 than in 2001.
The research revealed that a variety of circumstances pushed many middle-class Americans into bankruptcy, even when those families had health insurance. Countless families were under-insured, leaving them responsible for thousands of dollars in medical bills they couldn't pay. In fact, out-of-pocket medical charges averaged just under $18,000 for those who started out with insurance and yet went bankrupt due to medical expenses. Uninsured patients were worse off, facing $26,971 in out-of-pocket expenses.
A medical condition can cause the loss of a job, which often results in a loss of health insurance coverage since most health insurance is linked to employment. Nationally, about 25% of all companies cancel insurance coverage when an employee suffers a disabling illness and can’t work; another 25% cancel insurance within a year.
Due to the results of these findings, My Health Insurance of Washington recommends that families protect themselves by purchasing individual health insurance policies apart from -- or in addition to – employer-sponsored plans. These policies are owned by individuals and not the companies they work for, so loss of a job does not mean loss of health insurance.
My Health Insurance of Washington specializes in helping individuals, families, the self-employed, and small business find quality health insurance plans to meet their financial needs. Based in Washington State, their sole focus in on Washington State Health Insurance plans.
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