Soaring Medical Bills Squeeze Families - Newsweek

[Phoebe Loosinhouse]

http://www.msnbc.msn.com/id/14470912/site/newsweek/

Health Hazards
How mounting medical costs are plunging more families into debilitating debt and why insurance doesn’t always keep them out of bankruptcy.

Misty Keasler for Newsweek
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The Jacksons, while particularly unlucky, are hardly alone in their struggle to manage their medical bills. Health-care debts typically play a role in about half of the approximately 1.5 million bankruptcies filed in the United States each year, according to Harvard researchers Elizabeth Warren and David U. Himmelstein. And, like the Jacksons, 75 percent of those who declare medical bankruptcy have health insurance at the onset of the illness that failed to prevent them from being pushed over the financial edge, according to the Harvard research.

Those alarming figures have been disputed by David Dranove, a professor at Northwestern University's Kellogg School of Management. He says only 17 percent of respondents in the Harvard study directly said that medical spending was a cause of their bankruptcy. "They included in this category anyone who had medical bills of more than $1,000. You might as well say that every purchase over $1,000 caused their bankruptcy," he adds. (America's Health Insurance Plans, an industry trade group, paid for the time Dranove spent reanalyzing the Harvard data

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Today, 46 million Americans are uninsured. And 53 percent of adults who were uninsured at any time during 2005 reported medical debt or bill problems, according to a Commonwealth Fund Health Insurance survey this spring. But medical debt is not limited to the uninsured. One fifth of working-age adults, both insured and uninsured, currently have medical debt they're paying off over time; and three of five adults with medical bills or debt problems said they were insured at the time the debt was incurred, according to the Commonwealth survey.

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The solution: universal health insurance, says Warren. "Bankruptcy is a Band-Aid. It doesn't solve the underlying problem." Himmelstein, her Harvard colleague, agrees. "It needs to be coverage that continues whether or not you're sick, whether or not you're working," he says. "If you're in an auto accident today and can't work for six months, how many Americans could actually withstand that as a disaster in their lives?" Too many Americans lack a safety cushion for expensive medical costs. "There are just so many people who live so on the edge that medical emergencies can just spin them over that edge," says Brett Williams, author of "Debt for Sale: A Social History of the Credit Trap." "They skimp on things that are ultimately cheaper, like screenings. Or diabetics will skimp on insulin. Then amputations end up being so much more expensive." But Northwestern's Dranove disagrees: "Why should we have national health insurance any more than we should pay for food or housing if everything is causing bankruptcy?"

interesting article. They present the alternate view, which is pretty pointless, by quoting the Dranove guy.

Universal healthcare NOW!

[no_hypocrisy]

1. The bankruptcy bill from 2005 is often discussed on this board with

respect to frustration with financing medical bills. What isn't mentioned is the fact that hospitals and doctors are going straight to collection agencies who initiate and often get default judgments against debtor-patients. That means that they also file this judgments against the properties of the debtor-patients, acting as a lien on the property. Meaning that these debts must be paid before the property can be sold.

So let's say you are or your family is diagnosed with cancer, and opt for treatment, and the finances are breathtaking. You fall behind in payment. The parties (physician, hospital, laboratory) get a default judgment and you don't know that there is a lien. So, you have to sell your house to survive. You expect to have enough money to literally get another home, etc. and then your attorney tells you that $100,000+ will be deducted from the proceeds of your home sale before title can be transferred. Surprise.

[Vinca]

2. This should be on the front page of every magazine and newspaper

in America. People with insurance feel "safe" and many are unconcerned about those of us who are uninsured. Surprise, surprise. No one's safe. If you have a catastrophic illness, your insurance will only pick up about 80% (in most cases) after an initial deductible. You could easily be on the hook for a couple hundred thousand dollars. Everyone - insured and uninsured - is a split second car crash away from financial ruin.

[fasttense]

3. A nice guy and small business owner I know had this happen to him.

He is a textbook example of medical debt and bankruptcy. In the last four years, He opened a small liquor store and was averaging about $50,000 to $60,000 a year in salary. Most everything else went back into the store. He had no family in the area, his few relatives died years ago and his wife and daughter (he was divorced) moved out of state. But by all accounts he was successful. The store did regular business and he was regularly putting in improvements on it. He worked there and had about four other employees.

I found out last week he had to have open heart surgery. Seems bad hearts run in his family. The problem was that he had no medical insurance. He said he couldn't find a plan that would take him and his few employees for a reasonable cost. His history of heart problems always seemed to scare off any insurance company that was willing to offer a reasonable rate.

Now he has a $500,000 hospital bill and he hasn't received the doctor's bills yet. The hospital told him he could pay off $100,000/year. He said he laughed. He could never afford to pay $100,000 a year. He didn't even make $100,000/year. So he has no alternative but to file bankruptcy. Here was a small businessman contributing to the community and wham, he's suddenly bankrupt because of the outrageous costs of hospitalization. He has worked all his life, never had trouble with his credit, paid his bills on time, was financially responsible. He said he use to brag about how good his credit rating was but not anymore.

He found it irritating that he had to go to (and pay for) budget counseling so the idiot counselor could tell him he was bankrupt. He said he could have used the money he spent on counseling for something useful, like rent.

[Mend]

5. I think he should have found the medical insurance and cut

something else out of his life. People can get plans, even with very high deductibles. I am sorry he is stuck but he could have had something, knowing his family history, if he had made it a priority. Everyone knows the state of medical care.....it could have been cancer or a car accident for him or one of his workers. People have to find some major medical type plan, no matter what. Of course the costs aren't what he thinks are reasonable, but that is just the way it is and you can't gamble on staying healthy.

[cap]

6. he would have been in the state's pool for High Risk insurance

a regular insurance company would not touch him. He would have had minimal coverage. I'd have to read the fine print to see if that type of insurance would have covered his heart condition anyway.

Or.... moved up to Massachussetts.

[SharonAnn]

10. It would've probably cost him more than $50,000 a year, restricted

coverage, no pre-existing conditions, etc.

People say you should "just find medical insurance". Many times you can't, not for any price, not anywhere.

Doesn't matter how hard you try, it's just not available.

This is especially a problem since states loosened insurance regulations. companies can now deny coverage in many cases, or price it so astronomically high that virtually no one can afford it.

Remember, the insurance companies have succeeded in getting the regulatory rules rewritten at state and federal levels in the last 20 years, especially the last 10. They just want the money without having to provide anything.

[Mend]

11. this post didn't say he had a pre-existing condition, it just said he

had a family history....everyone's relatives die of something. The post didn't say he was uninsurable, just that he couldn't find "reasonably priced" insurance. I just wondered if he couldn't have gotten a major medical with a high deductible for himself, at least.

[Phoebe Loosinhouse]

12. I personally know a couple where the husband had high blood

pressure and some kind of pre-existing heart condition. They did find coverage, but it excluded almost any care for the husband's condition for a year, it had a giant deductable and his cost alone was $1,000 a month. So, they would be paying 12,000 for almost no coverage in the first year.

1. They couldn't afford it. How many people can afford a $1000 a month coverage for an individual along with their OTHER insurances coverages, house, car, etc. ..? Exactly HOW MUCH money do you think an average American family can siphon off for insurance outside of housing, utilities, car payments, school, food, etc.?

I think you know not whereof you speak. Talk to someone who has been in this position. There are far more of them than you know. You strike me as someone who has just always had some kind of major medical coverage with little or no issues. Talk to ANY small business owner about this issue. Small groups are just another nightmare.

[midnight]

13. The fact is our health care system is rigged.

Yes, he could of shopped and found something, but the bottom line is, not every policy covers the different bills that come up for a stay overnight or longer. We ,as a country, need to be more mindful of the waste going on at the top of these insurance co. The sad fact of the matter is that the politicians own stock in these insurance and pharmaceutical co. Talk about a conflict of interest.

[Phoebe Loosinhouse]

4. The big news here is that insurance does not protect you totally.

Your uncovered expenses can still do you in. Also, the biggest trap is that you get ill, you may be foreced to stop working, you will lose your insurance because you will not be able to keep up the expense, because of your illness, you unisurable for all intents and purposes and then you go bankrupt.

If you get sick, everyone should invesitgate the concept of medical tourism where you can go to another country and pay a fraction of the American costs for the same procedures. You have to do a lot of good research, but this is an increasing trend. Serves the American helathcare structure right. Don't give them their money and profits from your illness.

[nancyr]

7. Horror stories

Our neighbor had to have emergency open-heart surgery this summer. He HAD insurance, but they refused to pay, claiming he "had a pre-existing condition"...high blood pressure. The good Catholic hospital that he's in debt to won't allow him to make affordable payments, so here is this poor old guy having to opt for bankrupcy. He said he wishes he'd just died. Yes, what a wonderful system we have here in this great country. One that is surely the envy of other less enlightened countries!

[brentspeak]

8. Another solid argument supporting the need for a national health care sys.

[area51]

9. "Another solid argument supporting the need for national health care sys"

How true. It's insane how barbaric this country is, to tell people who get sick to go off & die somewhere.

[Joe Bacon]

14. The sad truth is that America will NEVER have national health insurance

I still remember how Harry and Louise (along with other liars like Andrew Sullivan) brainwashed the masses against the Clinton health care proposal.

What really galls me is that my parents went bankrupt over their medical bills. Yet, when I try and talk to my sisters about Canada's national health insurance, they recoil in horror with phony stories about people waiting years for surgery, and Canadians coming to the US for care they are denied (supposedly) at home.

They keep telling me that Canada rations health care. When I point out to them that America rations care too (based on MONEY), they ignore me.

[sarcasmo]

15. Kick to the top for our mess of a medical system in this Country.

[bronxiteforever]

16. Kick this!!!!!

Americans may be waking up to the fact that abortion, gay prejudice, prayer in school and other Rethug red meat items are just the smoke screen for the GOP to control the tax code and suck the money out of middle class and on on down suckers.

Maybe they should think of Social Security as a Liberal Government program that has helped generations of Americans. We could do that,why not National Healthcare? If we are indeed the children of FDR, lets fight like him for regular people.