Indiana Medical Insurance Does Not Prevent Bankruptcy

money.jpgWhether debating the current healthcare system or working to keep the status quo, Indiana residents can find common ground when the conversation turns to the increasing cost of medical care. Even Indiana patients with full insurance coverage can find themselves responsible for co-payments, co-insurance, deductibles and out-of-pocket expenses that can add up very quickly. Patients unfortunate enough to have no insurance coverage pay an even higher price. For many, the financial burden of medical expenses can be the tipping point that leads to bankruptcy.

A recent study published in The American Journal of Medicine reveals this growing financial problem. The study reports that nearly two out of three bankruptcies stem from the rising cost of medical bills. Even families covered by health insurance can face financial disaster if they suffer a serious illness.

Between 2001 and 2007, the number of all bankruptcies credited to medical problems rose by nearly 50%. In 2007, 62% of all bankruptcies were attributed unpaid medical bills.

The authors note that, “Middle-class families frequently collapse under the strain of a health care system that treats physical wounds, but often inflicts fiscal ones.”

Surveying 2,314 bankruptcy filers, the study exposes the growing dilemma. Families filing for bankruptcy who were covered by private insurance reported average medical bills of $17,749.
Those families who were uninsured faced an average of $26,971 in medical costs. A third category of families, those who lost their insurance coverage during the course of their illness, accumulated average medical bills of $22,568.

Of interest, nearly half the expenses were due to hospital costs (48%), with prescription drugs (18.6%), doctor’s bills (15.1%), insurance premiums (4.1%), medical equipment and nursing home care completing the list.

As expected, the health problems that leave patients with the highest out-of-pocket expenses were those that required ongoing care. Neurologic conditions, such as multiple sclerosis, result in patients’ highest costs (>$34,000). Other illnesses forcing patients into bankruptcy include Diabetes (>$26,000), Stroke and Mental Illness (>$23,000), and Heart Disease (>$21,000).