Substitute Insurance

If you want to thicken the air in any given room these days, bring up the subject of national health care reform. Opinions and emotions are guaranteed to fuel a heated conversation while at the same time some key issues are often left out of the informal debate. It is hard to blame participants for these oversights because of the subject’s extreme complexity. But the bottom line remains that this is a subject our country needs to intelligently tackle before it bankrupts us.

Bankruptcy is in fact what a growing number of Americans have already encountered through the health care system as it now functions. In June of this year, the American Journal of Medicine released a new study’s findings based on figures available from 2007. The results of this study point out the debilitating role of medical expenses in families and individuals who must file for personal bankruptcy. Labeled as the “first-ever national random sample of bankruptcy filers”, the study’s authors worked hard to maintain conservative controls on their findings and followed the numbers up with fact-finding interviews with a significant portion of the sample’s participants. Research indicated that a staggering 62% of personal bankruptcy filings were disproportionately driven by medically related expenses.

Steffie Woolhandler, M.D., one of the study’s authors, appeared in a CNN interview saying “If an illness is long enough and expensive enough, private insurance offers very little protection against medical bankruptcy, and that is the major finding in our study.” As a counterbalance Dr. Woolhandler’s bracing conclusions, the nonpartisan policy research foundation, the Center for Studying Health System Change, voiced mild skepticism of the study’s weighting of medical causes for bankruptcies. But they also offered little comfort with their statistic that 1 in 5 American families are “unduly strained” by medical bills.

In 1981, only 8% of families filing for bankruptcy claimed to have done so in the wake of a major medical crisis. (The accuracy of that figure is somewhat debatable since court records do not indicate the origin of debt that is handled by collection agencies, possibly obscuring debt generated by doctor or hospital bills.) In 2001, a major study concluded that over 46% of personal bankruptcies were medically related. The American Journal of Medicine study’s most recent conclusions of 61% used data from 2007, indicating an alarming trend and numbers which interestingly predate the fallout of our economy’s current recession.

The stigma that hangs over personal bankruptcy in our country is in part due to the public’s common misunderstanding of what the average filer looks like; many people have a mental image of a hapless slouch. The American Journal of Medicine’s study reveals this misapprehension for the untruth that it is. Most of the debtors surveyed were middle class, middle aged and college educated. 75% of the debtors had health insurance coverage at the onset of their financial and health problems. Typically this insurance left them with the commonplace gaps of high premiums, copayments, hefty deductibles and a range of uncovered medical services. It is important to note that policy rescission is a normative practice among medical insurance companies with 25% cancelling an individual’s policy immediately upon a disability diagnosis and another 25% of companies cancelling within one year of the diagnosis.

If “what is good for the middle class is good for America” is a useful measure of social and economic policy in this country, it is plain to see that viable and visionary health care reform is a mandate. With premiums, deductibles, institutional and procedural costs running on an unchecked course, the system will shortly be unsustainable. This year, 2009, the U.S. is predicted to spend an unprecedented 17.6% of its GDP on health care. What is not taken into account on top of this mind-boggling statistic is the hidden economic and societal costs of medically related personal and small business bankruptcies.

Do yourself a favor as a good citizen and read the American Journal of Medicine’s study in full. (You can find it quickly online at amjmed.com, Vol. 122, Issue 8, pp. 741 to 746.) Be informed, do some further fact scouting and let your congress representative and senator know that the average citizen wants and needs access to the quality of health insurance elected officials are privy to.