On the campaign trail, Barack Obama frequently cited research showing that medical expenses were a contributing factor in 55% of all personal bankruptcies. A new study says he was wrong. It was actually more than that:
The study found that medical bills, plus related problems such as lost wages for the ill and their caregivers, contributed to 62% of all bankruptcies filed in 2007….Medical insurance isn’t much help, either. About 78% of bankruptcy filers burdened by healthcare expenses were insured, according to the survey, to be published in the August issue of the American Journal of Medicine.
….Most people who filed medical-related bankruptcies “were solidly middle class before financial disaster hit,” the study says. Two-thirds were homeowners, and most had gone to college.
The study does not suggest that medical expenses were the sole cause for these bankruptcies, but it does identify them as a contributing factor. The increase in such filings occurred despite a 2005 law aimed at making it more difficult for individuals to seek court protection from creditors.
Among bankruptcy filers, those without insurance reported average medical expenses of $26,971. Those with private insurance reported average medical bills of $17,749.