Since 2000, the the cost of health insurance and health care has increased significantly. So has the number of bankruptcies.
Did one cause the other?
Aparna Mathur, a research fellow at the American Enterprise Institute, says no. The Survey of Consumer Finances "shows that medical indebtedness has not changed significantly over the past decade or so."
So what changed? Credit-card debt, which went from $4,800 to $7,300 per household. Another factor is that it's often beneficial, given the alternatives, to declare bankruptcy. At most, 29% of bankruptcies are caused by medical bills, and even that's likely an overstatement.
Mathur concludes, "The most effective solution to the problem of rising bankruptcies in these tough economic times is to help families keep their jobs, retain their earning power, stay in their homes, and live within their means. If economic problems nevertheless become unmanageable, the bankruptcy system is designed precisely to give families a fresh start by discharging some of their debt. If we mistakenly focus too narrowly and simply on medical indebtedness, believing it to be a bigger problem than it is, we will be even further away from the solution we need. "
