In 2012, 1.25 million Americans were expected to file for bankruptcy – a number nearly equal to the population of New Hampshire. While the percentage of bankruptcies caused by medical debt is a contentious and widely debated topic, some estimate that the high cost of healthcare triggers a medical bankruptcy every 30 seconds.
Medical Bankruptcy in the United States
The most widely known study of medical bankruptcy was conducted by the Department of Medicine at Harvard Medical School and dates back to 2007. The study’s methods involved surveying a random sample of 2317 bankruptcy filers – 1032 of these filers were then interviewed. Bankruptcies were deemed medical, “based on debtors’ stated reasons for filing, income loss due to illness, and the magnitude of their medical debts.” The study’s findings concluded that 62.1% of all bankruptcies in the United States were caused in part by medical debt (see Medical Bankruptcy Statistics for further findings from the study).
According to FactCheck.org however, “It’s worth noting that the figure from the Harvard study includes those who lost their jobs or significant income due to illness – even if they didn’t cite mounting health care bills as a direct cause of their bankruptcy.” So perhaps concluding that 62.1% of all bankruptcies are due to medical issues (instead of medical bills) is a more accurate statement.
Medical Bankruptcy: Fact or Fiction
David Dranove and Michael L. Millenson of The Center for Health Industry Market Economics at Northwestern University’s Kellogg School of Management offer a rebuttal to the 2007 study. They claim that “A reexamination of the data suggests that medical bills are a contributing factor in just 17 percent of personal bankruptcies.” Although Dranove and Millenson found a causal link to medical debt in just 17 percent of personal bankruptcies, this doesn’t necessarily holistically account for bankruptcies where medical reasons may have been a contributor to a filing but not the only factor or driving force behind it.
A Solution to the Problem
While medical bankruptcy within the U.S. has become both a popular and polarizing point of discussion given its political influence, sadly, we may be losing sight of the fact that regardless of whether the true percentage of medical-driven bankruptcies is 17 or 62 percent, thousands of Americans are hurting and in need of a solution to their financial and medical woes.
We started GiveForward because we wanted to be part of the solution instead of merely part of the debate. Talking about how we can fix the problem of medical bankruptcy and assessing the true scale of those impacted is certainly important, but we believe giving people a solution will always trump simply discussing the issue.
If you or a loved one is suffering from medical expenses that they can’t afford to pay, we would be delighted to help. We provide online fundraising pages to help with medical bills and are one of the easiest ways to send financial and emotional support to the people you care about. As of January 2013, we have helped thousands of families raise over $30 million on GiveForward.