Healthcare

Medical bill bankruptcy… misleading info

Medical debt is a big problem in the United States. For years, it’s been the No. 1 reason people file for bankruptcy — even though the more common assumption is that those struggling financially have been overspending in other areas of their life.

Do you believe that? Do you accept that 65% of all bankruptcies are the result of medical bills? You shouldn’t‼️

The problem with reports like this is they are based on surveys and interviews. Health care spending will always be at the top of the list of unaffordable spending. When you can say the cause of your financial worries are health care bills, you are unlikely to admit other spending contributes to your problems.

No doubt medical bills are a burden for many people, especially the uninsured and in some cases working Americans with high deductible health plans, but health care bills are rarely considered as part of total spending; the family budget.

Source: US Medical Debt: 10 Facts That Will Shock You – National Bankruptcy Forum

In 2009, there were 1.4 million bankruptcies. Obama based his calculation on a 2009 Harvard study coauthored by his assistant, Elizabeth Warren. It said 62.1 percent of all bankruptcies were because of medical bills. The researchers interviewed those who filed for bankruptcy between January and April 2007. It expanded medical causes to include:

Those who mortgaged a home to pay medical bills.

Those who had medical bills greater than $1,000.

People who lost at least two weeks of work due to illness.

Several scientists criticized the researchers for being too broad in including those last two reasons. 

Source: https://www.thebalance.com/medical-bankruptcy-statistics-4154729

Categories: Healthcare

Tagged as: ,

6 replies »

  1. Misleading suggests these studies overstated the facts. No, these are made-up statistics. And, as Disreali once said, there are lies, damned lies and then there are statistics. These are worse than a damned lie!

    I have commented on this in the past – see my March 2019 quinnscommentary post.

    Here’s a post I made in 2017 on another site:

    “… Stop spreading these claims about medical bankruptcies. The Harvard study was flawed. From Table 2, they listed causes as:
    o 29% – Because the debtor said so
    o 35% – Medical bills > $5,000 or > 10% of family income (so, a family with no income and $1 in medical expense qualifies as a medical bankruptcy).
    o 6% – Debtor used home equity to pay medical bills
    o 44% lost 2 or more weeks of work due to (or to care for someone with) illness/disability

    To quote the study, “the average net worth was similar (and negative) for medical (−$44,622) vs non-medical (−$37,650) bankruptcies.” The average debt owed directly to doctors and hospitals was significantly different for medical ($4,988) vs. non-medical ($256) bankruptcies.

    So, obviously, the reason for the medical bankruptcy was the $4,988 in unpaid medical bills – the other $39,610 in negative net worth had NOTHING to do with the bankruptcy filing. Right! Bullcrap!

    THAT’S LIKE SAYING THAT IF THESE INDIVIDUALS ONLY HAD $39,000 IN DEBT, BUT NO MEDICAL DEBT, THEY WOULD NOT, WOULD NOT HAVE FILED FOR BANKRUPTCY.

    OR, IT’S LIKE SAYING THAT IF THEY ONLY HAD $4,988 IN MEDICAL DEBTS, BUT NO OTHER DEBTS, THEY WOULD STILL HAVE FILED, WOULD STILL HAVE FILED FOR BANKRUPTCY!

    YES, I AM SHOUTING! SOMEONE NEEDS TO SHOUT THIS AT BERNIE, WARREN AND EVERYONE ELSE, LIKE PRESIDENT OBAMA, WHO MADE UP THESE DATA OR USED IT TO JUSTIFY THEIR POLICY PREFERENCES.

    Bottom line, the authors of these Harvard studies, intentionally only interviewed those who declared bankruptcy. They set up a jerrymandered definition that was all but certain to result in claims of “medical bankruptcy”. They never challenged their findings by looking at other individuals who had the same or greater levels of out of pocket medical expenses BUT DID NOT FILE FOR BANKRUPTCY. .

    Talk to any bankruptcy expert, like Todd Zywicki, who stated, in 2007 Congressional testimony: “there is no evidence that there has been an increase in the number of bankruptcies caused by medical debt.” See: https://judiciary.house.gov/_files/hearings/July2007/Zywicki070717.pdf

    See also: https://www.psca.org/blog_jack_2018_40

    Like

      • Well, heck.

        Dis, Twain, someone else, the quote works for me.

        However, I would note that the absence of proof is not proof of absence. That is, while historians can’t find anyplace where Disraeli wrote or was quoted by others saying these words doesn’t mean that he didn’t say it. There are no contemporaneous recordings of what Christ said either. The gospels don’t all say the same thing nor use the same words. It is no surprise that four people standing around remember what was said differently.

        Anyway, thanks for pointing that out – in the future I will say attributed variously to Mark Twain, Benjamin Disraeli, and perhaps others. And, as far as I am concerned, given the shoddy, stupid pricing of PPACA and current legislative proposals, I would attribute it to President Obama and Senators Sanders and Warren (and anyone else who embraces M4A, Green New Deal, and other such crap). These folks knowingly misrepresent the data. How about president Obama who said PPACA wouldn’t “add a dime to the federal deficit”. Remember that?!

        One of my other favorite famous quotes comes from those who remember Robert F. Kennedy saying: Some men see things as they are and say, why; I dream things that never were and say, why not.

        However, the originator of that was likely George Bernard Shaw: You see things; and you say “Why?” But I dream things that never were; and I say “Why not?”

        Both John F. Kennedy and Edward M. Kennedy used a variant of the quote – JFK in an address to the Irish parliament, Ed Kennedy in his eulogy for his brother.

        But, most of us baby boomers remember the attribution to RFK – who wasn’t the first to say it. But, we do have video of him saying it

        Like

  2. Excellent post (and links) again, Mr. Quinn. Thank you.
    (And again, my apologies for picking on you so ruthlessly yesterday.)

    I’m in complete agreement with you on the point you are making and illustrating with this post, as well as the final statement you made: “… but health care bills are rarely considered as part of total spending; the family budget.”

    What advice, as to what percentage, of a (any) family budget/income, should or would be prudently set aside, on an on-going basis, to provide for health care?

    For example, for a family of four – two working (income generating) adults, and two children – all nominally healthy, but neither working adult having employer paid health insurance. What advice would you give that family, to set aside for health care, as a percentage of their budget/income, in order to be prudent?

    Like

What's your opinion on this post? Readers would like your point of view.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s