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[tvoivozhd <tvoivozd AT infionline.net>]

Over half of bankrupts have medical insurance---of course invalids don't 
work, lose their jobs and quickly lose their insurance, their homes and 
automobiles.  Add to this the insurance companies passion for seizing 
any opportunity to throw the hook during any long, expensive 
illness---if you get sick from anything more serious than a common cold, 
you better find a warm sidewalk air vent and a big cardboard box to 
place over it---it can get cold for a family on the street. 

Boston.com      THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING

The Associated Press


 Illness trigger about half of bankruptcies

By Mark Jewell, AP Business Writer  |  February 2, 2005

` BOSTON --Costly illnesses trigger about half of all personal 
bankruptcies, and most of those who go bankrupt because of medical 
problems have health insurance, according to findings from a Harvard 
University study to be released Wednesday.

Researchers from Harvard's law and medical schools said the findings 
underscore the inadequacy of many private insurance plans that offer 
worst-case catastrophic coverage, but little financial security for less 
severe illnesses.

"Unless you're Bill Gates, you're just one serious illness away from 
bankruptcy," said Dr. David Himmelstein, the study's lead author and an 
associate professor of medicine. "Most of the medically bankrupt were 
average Americans who happened to get sick."

The study, to be published online Wednesday by the journal Health 
Affairs, distributed questionnaires to 1,771 bankruptcy filers in 2001 
in California, Illinois, Pennsylvania, Tennessee and Texas. That year, 
there were 1.46 million personal bankruptcies in the United States.

More than 900 of those questioned underwent more detailed interviews 
about their financial and medical circumstances for what the authors say 
is the first in-depth study of medical causes of personal bankruptcies, 
which have risen rapidly in recent years.

Illness and medical bills were cited as the cause, at least in part, for 
46.2 percent of the personal bankruptcies in the study. Himmelstein said 
the figure rose to 54.5 percent when three other factors were counted as 
medical-related triggers for bankruptcies: births, deaths and 
pathological gambling addiction.

The study estimates medical-caused bankruptcies affect about 2 million 
Americans each year, counting debtors and their dependents, including 
700,000 children.

Most of those seeking court protection from creditors had health 
insurance, with more than three-quarters reporting they had coverage at 
the start of the illness that triggered bankruptcy. The study said 38 
percent had lost coverage at least temporarily by the time they filed 
for bankruptcy, with illness frequently leading to the loss of both a 
job and insurance.

Out-of-pocket medical expenses covering co-payments, deductibles and 
uncovered health services averaged $13,460 for bankruptcy filers who had 
private insurance at the onset of illness, compared with $10,893 for 
those without coverage. Those who initially had private coverage but 
lost it during their illness faced the highest cost, an average of $18,005.

"We need to rethink health reform," said Dr. Steffie Woolhandler, a 
study co-author and associate professor of medicine at Cambridge-based 
Harvard. "Covering the uninsured isn't enough. We also must upgrade and 
guarantee continuous coverage for those who have insurance."

Susan Pisano, a spokeswoman for America's Health Insurance Plans, 
representing nearly 1,300 health insurance providers, said the study did 
not adequately explore the role that disability income protection plans 
and personal savings can play in helping someone with a medical problem 
avoid bankruptcy.

"It's very important to ask questions about what the financial stressors 
are for American families, but we don't think this study digs deeply 
enough," Pisano said.

The findings indicate medical-related bankruptcies hit middle-class 
families hard -- 56 percent of the filers owned a home, and the same 
number had attended college.

"Families with coverage faced unaffordable co-payments, deductibles and 
bills for uncovered items like physical therapy, psychiatric care and 
prescription drugs," Himmelstein said.

The study, funded by the Robert Wood Johnson Foundation, did not examine 
how many bankruptcy filers were from dual-income families where both 
partners had insurance, Himmelstein said.

Jeff Morris, resident scholar at the American Bankruptcy Institute, 
founded by Congress in 1982 to analyze bankruptcy trends, said the 
Harvard findings roughly mirror those of a 1996 ABI study in which 57 
percent of bankruptcy filers cited medical problems as a primary 
bankruptcy cause. Respondents in that study were more likely to cite 
three other factors as primary causes, including easy access to credit, 
job loss and financial mismanagement.

Morris said he was aware of no data indicating that the Harvard study, 
which was based on 2001 bankruptcy filings, does not accurately reflect 
current trends in medical-related bankruptcies.

"Medical coverage is becoming more for catastrophic loss than for 
intermediate expenses," Morris said. 

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