Medical bankruptcies a continuing problem, study finds

By Kay Lazar
The Boston Globe, March 8, 2011

The 2006 Massachusetts law that required nearly everyone to buy health insurance has not significantly staunched residents' pain from medical bankruptcies, according to a new study.

A survey of Massachusetts residents who filed for bankruptcy in July 2009 found that 53 percent cited a medical cause, down from 59 percent who blamed a medical cause in a survey done in early 2007, before the state law had been fully implemented. But because of the small number of people surveyed, the difference was not statistically significant, according to the study in today's American Journal of Medicine.

Lead study author Dr. David Himmelstein said medical bills are still causing bankruptcies because health costs in the state have continued rising sharply. High premium costs, along with large co-payments and deductibles, often expose families with insurance to substantial out-of-pocket costs, said Himmelstein, a professor of public health at City University of New York.

"People think they have reasonable insurance until they try and use it," Himmelstein said. "You are carrying an umbrella and it starts to rain and you put it up and it's full of holes. For most people, it just hasn’t rained yet."

Himmelstein, who conducted the research while working as an associate professor of medicine at Harvard Medical School, is co-founder of Physicians for a National Health Program, an organization that pushes for national health insurance.

He said his findings suggest that the national health overhaul, which was largely modeled on the Massachusetts law and will take full effect in 2014, will not ease the number of medical bankruptcies, either.