Serious Illnesses Not Good for the Pocketbook

WASHINGTON (Reuters) - Half of all U.S. bankruptcies are caused by soaring medical bills and most people sent into debt by illness are middle-class workers with health insurance, researchers said Wednesday.

The study, published in the journal Health Affairs, estimated that medical bankruptcies affect about 2 million Americans every year, if both debtors and their dependents, including about 700,000 children, are counted.

"Our study is frightening. Unless you're Bill Gates you're just one serious illness away from bankruptcy," said Dr. David Himmelstein, an associate professor of medicine at Harvard Medical School who led the study. "Most of the medically bankrupt were average Americans who happened to get sick. Health insurance offered little protection."

Here's the problem with this sort of reporting. I don't doubt the findings of this study. But the quote I highlighted is preposterous. Look, millions of people get serious illnesses and don't go bankrupt. The problem is those who have catastrophic illnesses (especially rare conditions). For these people, it's a choice between life (or decent living) and bankruptcy. That's a no brainer. You do what you have to do.

But isn't almost everyone a catastrophic illness away from bankruptcy? I'd say yes. The reason it's a problem now is because medical technology gives us the ability to survive catastrophic illnesses. I mean, 30 years ago a brain tumor meant death...and no bankruptcy. Today, you can be treated for a brain tumor and make a full recovery, but it costs.