A study recently published online in The American Journal of Medicine reports that nearly two out of three bankruptcies are caused by medical bills. This report likely understates the problem, because the data was collected prior to the current economic crisis. Researchers at Harvard Law School, Harvard Medical School, and Ohio University surveyed 2,314 randomly-selected bankruptcy filers during early 2007, discovering that medical problems contributed to 62.1% of all bankruptcies. This proportion represents a 50% rise since 2001.
The authors noted that the financial strain from medical bills affects middle-class families as well as the poor and uninsured. Among families bankrupted by medical bills, those with private insurance averaged bills of $17,749, while uninsured families faced an average of $26,971. Those families who had health insurance but lost it during their illness reported average bills of $22,568. About half of these expenses were hospital costs, followed by prescription drugs (18.6%), doctor’s bills (15.1%) and insurance premiums (4.1%), with medical equipment and nursing home care at the bottom of the list. Neurological problems left patients with the highest out-of-pocket expenses at $34,167, followed by diabetes, injuries, strokes, mental illness, and heart disease.