For all those Americans worrying about health reform and fearing they will lose their current insurance, think about this.  Sixty percent of all U.S. bankruptcies are attributable to medical problems, according to a study by Dr. David Himmelstein and his colleagues at Harvard and Ohio University, published this month in The American Journal of Medicine. The share of bankruptcies attributable to medical problems rose by 49.6 % between 2001 and 2007.  “Medical” was based on debtors’ stated reasons for filing, income loss due to illness and the magnitues of their medical debts.

Here’s the kicker–Many families with continuous coverage found themselves under-insured and responsible for thousands of dollars of out-of-pocket costs (averaging almost $18K for all medically bankrupt families).  Because almost all insurance is linked to employment, a medical event can trigger loss of coverage, say the authors.  Nationally,  25% of firms cancel coverage immediately when an employee suffers a disabling illness (so much for your employer taking care of you); another 25% cancel coverage within a year.  

The fear mongering currently underway to make Americans believe they will be losing the security of their current insurance coverage  if the government steps into the act is truly intended to cover up the real threat.  It seems to me that a real fear is the potential actions of  employers (look at GM over the  years–or how about the steel or airline industries) vis-a-vis health insurance.  There’s no security there–and often they too are the victims of economic decline.

Finally, where do those people without insurance go? Answer: to the emergency rooms at academic health center hospitals throughout the country.  How do policymakers think these institutions can survive? The Association of Academic Health Centers found in 2008 that AAHC institutions, on average, provided almost $44 million in uncompensated patient care each year, with one in seven institutions providing more than $100 million. It is not clear how the reform packages will help these institutions.