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Health insurance in California is a political football. One side believes that access to top notch medical services and hospitals is a right which the government should provide and and for which tax payers should pay. The other side believes that, much like housing and food, the government should provice medical services only to those unable or unwilling to obtain health insurance on their own. In the course of this debate, many statistics, numbers and reports are cited as fact to support one side's position.
Recently, I attended two presentations on "single payer / universal health insurance coverage." Both speakers cited as fact a statistic that "medical expenses account for 50 percent of bankruptcies." With this statement, the speakers inferred that these people could have avoided bankruptcy had they had health insurance. Since everyone would be covered under the single payer system, they wished to conclude that there would be 50 percent fewer bankruptcies with universal health insurance.
This is a very strong argument. As someone who wants to enroll as many people as I can in health insurance plans, I thought that this would be an excellent point to remind people with whom I discussed health insurance, but who chose not to enroll. I envisioned sending them a post card saying, in effect: "Avoid bankruptcy, buy health insurance."
Accordingly, I went on line and found the study, cited below. What I discovered upon reading the study is that, yes many people did report incurring medical bills prior to filing for bankruptcy. But, the report also stated that there is no correlation between having health insurance and avoiding bankruptcy. People who incurred medical expenses were just as likely to file for bankruptcy with or without health insurance. For some, the lost income associated with illness and not working sent them into bankruptcy. Accordingly, universal health coverage would not prevent 50 percent of the bankruptcies, as single payer advocates claim.
Health insurance is important to everyone. We should strive to honestly report statistics and studies. To that end, I have copied the abstract from the report, with the citation below. I encourage you to read the report in its entirety.
Warren, Elizabeth, Sullivan, Teresa A. and Jacoby, Melissa B., "Medical Problems and Bankruptcy Filings" (April 2000). Norton's Bankruptcy Adviser, May 2000 http://ssrn.com/abstract=224581
Abstract: "This paper explores the financial impact of medical problems, using data from Phase III of the Consumer Bankruptcy Project, a survey of 1,974 individual bankruptcy petitioners conducted during the first quarter of 1999 in eight federal judicial districts. Although the questionnaire covered a variety of topics, this paper focuses on debtors' identification of illness or injury as a reason for filing, medical debts, and health insurance coverage. One out of four debtors, or an estimated 326,441 families in 1999, identified an illness or injury as a reason for filing for bankruptcy. One third of the debtors said that they had substantial medical bills, i.e., that they had incurred $1,000 or more in medical bills not covered by insurance. (Author's note: the report defined 'substantial medical debt' as "medical bills not covered by insurance in excess of $1,000 during the past two years." The median income of the respondents to the survey was $28,000.) Combining those identifying medical reasons with those indicating substantial medical debts (an overlapping but not perfectly coextensive group), the financial consequences of medical problems were a factor in the bankruptcy cases of an estimated 596,198 families in 1999. Health insurance coverage was sparse for the group, with one in five debtors reporting that they had no health insurance for any family member. (Author's note, conversely 80 percent of debtors had health insurance.) The absence of insurance, however, did not correlate with a debtor's identifying a medical problem. Those who had insurance and those who did not were about equally distributed among those who identified a medical problem and those who did not. (Author's emphasis added.)
The data were re-analyzed by separating the responses of single filing men, single filing women, and joint filing married couples. Households without a male present were nearly twice as likely to file for bankruptcy giving a medical reason or identifying a substantial medical debt as households with a male present. The proportion of debtors providing medical reasons for filing also varied with the debtors' age. Of debtors 65 or older, 47.6 percent listed a medical reason, as compared with 7.5 percent of debtors under 25. Previous studies considering medical problems and bankruptcy in the United States are summarized, although the methods used and results obtained are not directly comparable with the current findings."
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