Study Indicates that Medical Expenses are an Increasing Cause of Bankruptcy

Medical Bankruptcy in the United States, 2007: Results of a National Study David U. Himmelstein, MD, Deborah Thorne, PhD, Elizabeth Warren, JD, Steffie Woolhandler, MD, MPH

From the Abstract

BACKGROUND: Our 2001 study in 5 states found that medical problems contributed to at least 46.2% of
all bankruptcies. Since then, health costs and the numbers of un- and underinsured have increased, and
bankruptcy laws have tightened.
METHODS: We surveyed a random national sample of 2314 bankruptcy filers in 2007, abstracted their court
records, and interviewed 1032 of them. We designated bankruptcies as “medical” based on debtors’ stated
reasons for filing, income loss due to illness, and the magnitude of their medical debts.
RESULTS: Using a conservative definition, 62.1% of all bankruptcies in 2007 were medical; 92% of these
medical debtors had medical debts over $5000, or 10% of pretax family income. The rest met criteria for
medical bankruptcy because they had lost significant income due to illness or mortgaged a home to pay medical
bills. Most medical debtors were well educated, owned homes, and had middle-class occupations. Three
quarters had health insurance. Using identical definitions in 2001 and 2007, the share of bankruptcies attributable
to medical problems rose by 49.6%. In logistic regression analysis controlling for demographic factors,
the odds that a bankruptcy had a medical cause was 2.38-fold higher in 2007 than in 2001.
CONCLUSIONS: Illness and medical bills contribute to a large and increasing share of US bankruptcies.

Read more.