Medical bills underlie 60 percent of U.S. bankruptcies: study

Most bankrupt families had health insurance

92 percent had medical bills over $5,000

By Maggie Fox for Reuters

Medical bills are behind more than 60 percent of U.S. personal bankruptcies, U.S. researchers reported Thursday in a report they said demonstrates that healthcare reform is on the wrong track.

More than 75 percent of these bankrupt families had health insurance but still were overwhelmed by their medical debts, the team at Harvard Law School, Harvard Medical School and Ohio University reported in the American Journal of Medicine.

“Unless you’re Warren Buffett, your family is just one serious illness away from bankruptcy,” Harvard’s Dr. David Himmelstein, an advocate for a single-payer health insurance program for the United States, said in a statement.

“For middle-class Americans, health insurance offers little protection,” he added.

The United States is embarking on an overhaul of its healthcare system, now a patchwork of public programs such as Medicare for the elderly and disabled and employer-sponsored health insurance that leaves 15 percent of the population with no coverage.

The researchers and some consumer advocates said the study showed the proposals under the most serious consideration are unlikely to help many Americans. They are pressing for a so-called single payer plan, in which one agency, usually the government, coordinates health coverage.

“Expanding private insurance and calling it health reform will fail to prevent financial catastrophe for hundreds of thousands of Americans every year,” Dr. Sidney Wolfe of the Health Research Group at Public Citizen said in a statement.

About 170 million people get health insurance through an employer but President Barack Obama says soaring healthcare costs hurt the economy and force businesses to drop medical insurance for their workers.


“Nationally, a quarter of firms cancel coverage immediately when an employee suffers a disabling illness; another quarter do so within a year,” the report reads.

Obama told Congress Wednesday he was open to making mandatory health insurance part of the overhaul.

Neither Congress nor Obama are considering the kind of single-payer plan advocated by Public Citizen, Himmelstein and his colleague Dr. Steffie Woolhandler.

“We need to rethink health reform,” Woolhandler said. “Covering the uninsured isn’t enough.



  1. Alexander Hamilton on June 5, 2009 at 2:25 pm

    While he was Blair’s national health advisor, Simon Stevens introduced the NICE policy, activated on April 1, 1999, which is the model for the Obama administration. He then left his post in 2004 to set up Health Care UK, a division of the United Health Group, based in Minnesota, to take advantage of the privatization of the British National Health Service, which he himself initiated. In 2007, he moved to Minnesota and became executive vice president of UnitedHealth and the CEO of UnitedHealth Groups’ seniors business, Ovations/AARP medicare division. Now he has emerged as the director of the Center for Health Reform and Modernization.

    On May 27, Stevens released a study done by the latter center, which identified more than $540 billion in health-care costs the federal government could save over the next 10 years The report contains 15 cost-containment options in four categories; “incentivizing [sic] beneficiaries to use high-quality care providers; reducing avoidable and inappropriate care; supporting and incentivizing physicians to deliver high-quality appropriate care; and applying evidence-based standards to reimbursement policies.” It claims that, over the next 10 years, approximately $55 billion could be saved by reducing senior’s avoidable readmissions to hospitals. Also, $37 billion could be saved through voluntary programs that help seniors choose to receive care from high-quality and efficient care providers. And, $166 billion could be saved by reducing the need for people living in nursing homes to be admitted to a hospital.

    In January of this year, the Attorney General of New York State, Andrew Cuomo, accused UnitedHealth Group Inc. of consumer fraud. Cuomo said at a press conference at St. Vincent’s Hospital in Greenwich Village, that “it is not an overdramatization to say that it is a matter of life and death.” The way the scheme worked was that Ingenix — a United Health subsidiary and the country’s largest provider of health-care billing information—sets “usual and customary” rates for medical procedures. But Ingenix determined the rates by asking the insurance companies what to charge. Their estimates for reimbursement generally are much lower than what the patient paid. Cuomo said probers found that insurers using the Ingenix databases underpaid anywehere from 10% to 28% for certain claims in New York.

    In exchange for avoiding a court fight, United Health Group Inc. said that it would create a database — overseen by an outside, nonprofit organization, to determine fair rates for reimbursement. It agreed to spend $50 million to reform its billing practices.

    Cuomo said he would seek hundreds of millions of dollars in restitution for what he called a decade of “consumer fraud” affecting millions of out-of-network patients.

    Thus, a company, which has committed hundreds of millions of dollars in fraud against U.S. citizens, is now making proposals to the Obama administration, on behalf of the British Empire’s Tony Blair, as to how to commit murder against Americans.

  2. care4all on June 6, 2009 at 7:01 pm

    Health Care Reform – Your Ideas?

    Senator Dodd asks: Is your health care working? What changes would you like to see? Add your ideas at YouTube’s Senate Hub at

    Democratic Senators are writing a major health reform bill. Rising costs are hitting families and businesses and now 46 million Americans live without health coverage. We need reform. Respond now with your ideas as the Senate writes health care legislation. You can help.

    Go To: (note: this is not the regular YouTube comment area)

    Add your ideas, and be sure to VOTE on the other ideas submitted. If you can, vote FOR the SIngle Payer comments.


  3. care4all on June 6, 2009 at 7:10 pm

    Dear Everyone,

    The New York Times is asking for comments regarding mandatory health insurance.

    If you can, take a moment to say NO – we need non-profit, Single-Payer healthcare for all!

    Please add your comments at the NY Times site:

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