Medical Bankruptcy Is Growing

The health care system in the United States is broken. About half of all bankruptcies are declared because of insurmountable medical bills, and of that huge number, about 75% of them had health insurance when the problems began.

Medical bankruptcy is not a problem of the poor or the upper middle or upper class. It is a problem for the middle class and the lower middle class ? people who work hard, do their best to pay their bills, and raise their families.

All it takes is one major illness or accident and even if they have health insurance, they can owe many thousands of dollars in medical bills. If the accident or illness causes them to lose their job, and thus their health care insurance, their medical bills can run into hundreds of thousands of dollars.

There are two main causes for the huge upsurge in medical bankruptcies:

The first reason is that health care costs are rising at an alarming rate ? about twice the rate of inflation. Insurance premiums go up, and insurance coverage goes down. Prescription drug costs are out of control.

The second reason for the huge upsurge in medical bankruptcies is that employers are passing a larger and larger portion of the cost of health insurance along to their employees. Most major employers have switched the health insurance in employee benefit packages from comprehensive coverage that covers almost everything and has a small deductible to a limited coverage policy with a high deductible. The cost of the insurance passed along to employees has gone way up, while the benefits offered have gone way down.

The insurance companies are doing very well. The health of their bottom lines has never been better. The middle class and lower middle class families are in a financial crisis. Until something is done to curb the cost of health care and reign in the insurance companies, you can expect to see more and more medical bankruptcies.

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