Study Ties Bankruptcy to Medical Bills
By REED ABELSON
Sometimes, all it takes is one bad fall for a working person with health insurance to be pushed into bankruptcy.
Hundreds of thousands of Americans file for personal bankruptcy each year because of medical bills - even though they have health insurance, according to a new study by Harvard University legal and medical researchers.
"It doesn't take a medical catastrophe to create a financial catastrophe," said Elizabeth Warren, a Harvard law professor who studies bankruptcy and is one of the authors of the study.
The study, which is scheduled to appear today on the Web site of Health Affairs, an academic journal, provides a glimpse into a little-researched area connecting bankruptcy and medical costs. About 30 percent of people said they filed for bankruptcy because of an illness or injury, even though most of them had health insurance when they first got sick.
Many lost their jobs - and their insurance - because they got sick, while others faced thousands of dollars in co-payments and deductibles and for services not covered by their insurance.
One person cited in the bankruptcy study, for example, broke a leg, missed a couple of months of work and then had $13,000 in unpaid medical bills, though his employer-based health plan had already paid for much of his care, Ms. Warren said.
Another respondent to the survey was able to pay for hospital stays for lung surgery and a heart attack but could not return to his old job. When he found a new job, he was denied coverage because of his pre-existing conditions, which continued to require costly medical care and contributed to his bankruptcy.
Policy analysts say these findings underscore the limitations of the nation's current system of providing health insurance largely through employers. Some argue that even for those with insurance, benefits can be ephemeral.
"You can lose it because it's tied to employment," said Joseph Antos, a health policy researcher with the American Enterprise Institute, who said people were also at risk if their employers went out of business.
