Medical bills underlie 60 percent of U.S. bankruptcies: study

Medical bills are behind more than 60 percent of U.S. personal bankruptcies, U.S. researchers reported Thursday in a report they said demonstrates that healthcare reform is on the wrong track.

More than 75 percent of these bankrupt families had health insurance but still were overwhelmed by their medical debts, the team at Harvard Law School, Harvard Medical School and Ohio University reported in the American Journal of Medicine.

The United States is embarking on an overhaul of its healthcare system, now a patchwork of public programs such as Medicare for the elderly and disabled and employer-sponsored health insurance that leaves 15 percent of the population with no coverage.

The researchers and some consumer advocates said the study showed the proposals under the most serious consideration are unlikely to help many Americans. They are pressing for a so-called single payer plan, in which one agency, usually the government, coordinates health coverage.

"Expanding private insurance and calling it health reform will fail to prevent financial catastrophe for hundreds of thousands of Americans every year," Dr. Sidney Wolfe of the Health Research Group at Public Citizen said in a statement.

"Nationally, a quarter of firms cancel coverage immediately when an employee suffers a disabling illness; another quarter do so within a year," the report reads.

"Only single-payer national health insurance can make universal, comprehensive coverage affordable by saving the hundreds of billions we now waste on insurance overhead and bureaucracy."

The researchers studied 2,134 random families who filed for bankruptcy between January and April in 2007, before the current recession began.

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