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Monday, October 7, 2019

Just How Many Medical Bankruptcies Are Filed Each Year?

On the campaign trail, one of the central topics discussed among the Democratic Presidential hopefuls is that of medical bills. Several Democratic candidates promise to reform the current medical insurance system in an effort to ensure all Americans have access to the healthcare they need. Senator Bernie Sanders has sought to tie the issue of universal healthcare to that of bankruptcy, asserting a few times on the campaign trail that over 500,000 medical bankruptcies are filed each year.  It is a common notion that medical bills are a top cause of bankruptcy, but do the facts support this? Our Beavercreek, Ohio Chapter 7 bankruptcy lawyers examine the true instance of medical bankruptcies below.

The American Journal of Public Health Study

Senator Sanders’ statistic of 500,000 medical bankruptcies per year is based on a study published by the American Journal of Public Health. In the study, researchers mailed over 3,000 bankruptcy filers a survey that asked respondents whether either medical expenses or loss of work related to an illness contributed to the bankruptcy. Some thirty percent of people responded, and of those who responded 66.5 percent said at least one of the medical factors contributed somewhat or very much to the bankruptcy.

Extrapolating from the 66.5 percent who stated a medical condition was at least somewhat a factor in the bankruptcy, then indeed one could state that about 500,000 medical bankruptcies are filed annually. However, the problem comes with the ambiguous nature of the survey. When responders said an illness somewhat contributed to the filing, what exactly does this mean?

Another study published by the New England Journal of Medicine took a different approach.  There, researchers took a group of people with medical debt and determined how many filed for bankruptcy. They found that medical bankruptcies comprised just four percent of all bankruptcies. However, it could be argued that this study falsely deflated medical bankruptcy rates by ignoring the medical-related issues that may snowball to cause bankruptcy.

Regardless of the exact figure, one thing is certain—medical debt is a significant cause of bankruptcy. Many Americans lack health insurance or, even with insurance, rack up costly medical expenses if they experience illness. Unable to pay off these debts, and at times unable to work due to an illness, medical debt may lead to the need to file for bankruptcy. Anyone who is struggling due to oppressive medical debt should contact a bankruptcy lawyer to determine whether bankruptcy may be the right option for them.  

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Miami Valley Bankruptcy, Brian Lusardi, Esq., assists clients with Bankruptcy matters including but not limited to: Common Myths, Cost of Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, The New Bankruptcy Law and Personal Bankruptcy in Xenia, Ohio, and the cities of: Wilberforce, Alpha, Spring Valley, Dayton, Bellbrook, Yellow Springs, Cedarville, Fairborn and Clifton; and the counties of Greene and Montgomery.



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