Health problems are the reason for more than two in three bankruptcies or (67%) in the U.S., a study published in the American Journal of Public Health revealed. The research showed that around 530,000 families suffer bankruptcies each year are associated with illness or medical bills.
The survey was conducted by doctors, lawyers, and a sociologist from the Consumer Bankruptcy Project (CBP) to around 910 Americans who filed for personal bankruptcy between 2013 and 2016.
Not even insured people and financially well-off are immune from this financial disaster. The truth is most of the people who are filing for bankruptcy belong to the middle class and have insurance, David Himmelstein, the study’s lead author, said in an interview.
Health insurance provides minimal protection for middle-class Americans, Himmelstein, a distinguished professor at the City University of New York’s Hunter College and a lecturer at Harvard Medical School, said. Many policies have many loopholes, fees, and deductibles that reduce the money you get from medical bills and income loss due to illness. And even the best employment-based health insurance would be used up when a prolonged illness leads to job loss, he added.
In 2018, the Milliman Medical Index revealed that the average health care cost for the typical American family of four covered by a standard employer-sponsored PPO plan was $28,166. Every month, this rises by about $100, the index found.
Worse, many Americans save money for health care and other emergencies. A 2018 Federal Reserve data showed four in 10 Americans do not have enough savings to cover an unforeseen $400 expense. Moreover, more than one in four skipped the needed medical care in 2017 because of the high costs.