Saturday, June 06, 2009

Most Bankruptcies are the result of Medical Bills Even for Those who Have Health Insurance

Congress, during the prior Presidential administration, dramatically scaled back the ability of ordinary Americans (i.e. not people like Donald Trump) to seek bankruptcy protection. And I think the motivation, rationale, and justification used by that political party had quite a bit to do with their notion that the majority of those who declare bankruptcy are in their particular position because either A) they had poor judgment and made poor decisions, B) they lived carelessly or frivilously, C) they thought it was ok to run up a bunch of bills and then conveniently abandon them (translation: a lack of ethics or morals), or D) all of the above.

Is that opinion correct? Are bankruptcy filers simply people who made their own bed and, thus, should be made to lie in it? The answer to the question is highly subjective. It depends on who you ask. Not suprisingly, party affiliation makes a huge difference in the answer you get and the rationale behind the answer.

However, to researchers quoted in a reuters news article, medical bills are a component of more than 60% of personal bankruptcy filings. Here are some more interesting factoids:

1. The percentage of personal bankruptcies that could be connected to medical problems rose by fifty percent from 2001 to 2007 (highly coincidental with the prior administration).

2. As opposed to certain stereotypes, most families filing bankruptcy as a result of medical debt were educated, middle-class homeowners.

The truth is, the revision of bankruptcy laws in recent years amounted to a complete disregard for the well-being of the American middle-class citizenry. In typical fashion, it was designed to aid companies and institutions holding debt. And some of those companies are ones we are now bailing out to the tune of hundreds of billions while their management-elect, the privileged few, bail out with golden parachutes, virtually unscathed, as they leave behind a wake of financial ruin.

A quote from one of the researchers: "For middle-class Americans, health insurance offers little protection. Unless you're Warren Buffett, your family is just one serious illness away from bankruptcy,".

Complicating things is the fact a national healthcare system (I say "system" facetiously) in which most of our insured receive their health insurance from their employers (and, therefore, from the insurers that they purchase coverage through) is this reality: "Nationally, a quarter of firms cancel coverage immediately when an employee suffers a disabling illness; another quarter do so within a year,".

We don't need national health insurance? Right. Attempts to provide national health care will bankrupt the country? No more so than bailing out AIG and a slew of other companies for which company executives should be serving jail time...but aren't.

The thing is, the people in a representative democracy ultimately have the power and authority to decide what type of country and society they wish to live in. And so the question is, do we want to live in a country where only the fat cats get taken care of?

To those who say that national health care legislation equates with socialism, the massive bailouts afforded to the insurance, banking, and automotive industries already do that nicely enough on their own.

The reality is, things have changed. And the question is, what kind of country do you want to live in?

Return to the Social Security Disability SSI Benefits Blog

Other Posts

Disability Benefits based on back problems - degenerative disc disease
Oversight and Reform of the Health Insurance Industry
Social Security Disability Back Pay and SSI Backpay - Are they different?
Social Security Disability and SSI back pay : contacting your congressman to speed it up
Will bankruptcy affect your ability to get social security disability?
Social Security Disability, SSI, Degenerative Disc Disease and Back pain
Disability Backpay
Layoffs, Bankruptcy and Losing Insurance
Social Security Disability SSI and the Health Insurance Issue

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Blogger Julie said...

I just came acorss your blog. Thanks for all the helful information and links. I am a caregiver to my husband who had a stroke. There is a lot for me to learn. I will be visiting frequently:)

10:01 AM  

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