A recent study revealed that 62% of bankruptcies filed were medical related and a staggering 92% of those had medical bills in excess over $5,000 dollars. The study also surprisingly revealed that 75% of the entire pool surveyed had some type of health insurance.
"Medical Debtors" as the study refers to the pool of individuals that filed bankruptcy as a result of medical bills, all were well educated, owned homes, and had "middle-class" occupations. Bankruptcies filed by medical debtors rose by almost 50% during the latter part of the study period which ranged from 2001 to 2007.
Researchers used a combination of interviewing medical debtors and reviewing bankruptcy court records to formulate the study and although the study period ended, illness and medical bills continue to contribute to a large and increasing share of US bankruptcies filed.
How did medical problems propel so many middle-class families with insurance toward bankruptcy?
For 92% of the "medically bankrupt", costly medical bills caused their bankruptcy.
An overwhelming amount of families with insurance coverage found themselves "under-insured", and responsible for thousands of dollars in out-of-pocket medical costs. Other families lost their insurance coverage when the primary insured became too sick to work.
According to the study, nationally, a quarter of insurance companies cancel coverage immediately when an employee suffers a disabling illness. The study does not address the impact of Obama's Health Care Affordability Act coined Obama Care on medical related bankruptcies.