Does Having Health Insurance Prevent Bankruptcy from Medical Bills?

Bankruptcy Filings...
Image by MyEyeSees via Flickr

One of the myths that I still cling to is that having health insurance will save me from bankruptcy if anyone in my family should fall seriously ill.  It’s right up there with my hope that if I’m ever in the ER my doctor will look and act more like a doctor from ER than a doctor from Scrubs.

But I think I have to let this one go.  Elizabeth Warren‘s national survey showed that 62% of bankruptcies were due to medical costs.  This is up from 8% back in 1981.  But they were uninsured, right?  WRONG.  The study estimated that three-quarters of those filing for bankruptcy had health insurance.  So we’re all paying through the nose for something that -when push comes to shove- won’t be enough to cover the costs.

Furthermore, most of those filing for bankruptcy were well-educated and middle-class.  They had “done nothing wrong.”  They were following the standard model:  college, career, pay your premiums, and be safe.  So what happened?  Didn’t they buy their homes?  Nope.  Two-thirds were homeowners.

I can’t find anything that these people did that wouldn’t be true of anyone who doesn’t happen to be a multimillionaire.  It is a disturbing and sobering thought.

Here’s the study link.


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