I noted a small blip in a story by Rick Lyman at the New York Times about the newly released census data. It seems that another 1.3 million people lost health insurance between 2004 and 2005. That brings the 2005 total to 46.6 million Americans without health insurance.
I figure that pretty much all the poorest Americans already had no health insurance. The latest 1.6 million most likely represent a continuing expansion of the uninsured middle class.
With "medical bankruptcy" having entered the lexicon in the past year, this new stat makes me pause to think about risk. I just did an interview about this with Karen Springen at Newsweek. On the research side, papers with Melissa Jacoby and Debb Thorne (both on this blog) and David Himmelstein and Steffie Woolhandler (both Harvard Medical School) show that health insurance is no guarantee that someone won’t end up in financial collapse following a serious medical problem. But insurance makes a difference on where the tipping point occurs. For the uninsured, the $11,000 hospital bill following a slightly dodgy appendectomy spells financial doom. For the insured, it may take a more serious round of surgery and rehab after a bad fall to hit that same $11,000 in uninured costs out of a total bill of $50,000. Of course, either group can be beaten up financially by time lost from work. This is all just a question of vulnerability by degrees.
With the changes in the bankruptcy law making many people feel that the option has become too expensive or too difficult to accomplish, what will happen to the 1.6 million newly uninsured? Many won’t get sick, and others who get sick won’t seek medical care. But for some, modest medical problem will put them in a financial hole from which they can never recover. If they don’t go to the bankruptcy courts, what will happen to them?
Comments
2 responses to “The Next Medical Bankruptcy Candidate”
Of course I cannot refrain myself from commenting/elaborating on a post on medical-related financial problems! I can’t answer the question at the end of the post because we have too few opportunities to compare the outcomes for those who file for bankruptcy and those who do not. On the uninsured, for those who are interested, this page should get you to the new report from the census bureau: http://www.census.gov/newonsite/. The Kaiser Family Foundation has a good primer on its website (www.kff.org) on evaluating the characteristics of the uninsured and comparing various counts of the uninsured. Both the census report and the KFF primer help us see that lower income people are uninsured at higher rates than higher income people, but many lower income people do have some sort of insurance, particularly children and the elderly. Of course, we learn from general population studies and from bankruptcy studies that people of limited incomes may experience medical-related financial distress whether or not insured. We also may need to distinguish between the chronically uninsured and the temporarily uninsured; the financial and health impacts could be different (although neither trivial).
Whether $11,000 is considered a catastrophic health expense for a household depends on one’s preferred definition of catastrophic/underinsurance (they vary) and information about income. Perhaps the $11,000 bill is accompanied by significant lost work and direct non-medical expenses, which may help explain why the household may have trouble absorbing the cost even in a technically non-catastrophic situation. Add to that the coping mechanisms they might adopt and general financial instability. To me, medical bills (and thus health insurance) are an important part of the story but not the whole story.
–Melissa
Why is the discussion always about health insurance? Everyone seems to operate from the assumption that if all Americans had insurance, the world would be just hunky-dory. Addressing the issue of access to health care in terms of insurance is simply missing the point and dodging the economic realities. This discussion is aimed at a symptom and not the disease (sorry, couldn’t resist).
To exacerbate the problem, you actually liken public health care programs like Medicare and Medicaid to health insurance. Those programs do not insurance against a loss, they pay whatever a bureaucrat determines they will pay, with little regard for the actual cost and price. Of course, it is these programs which have given rise to the health care crisis. When market sellers are forced, by law, to deal with the market’s largest buyer on terms set by that buyer, the market breaks down.
Yes, the lack of insurance raises the risk of suffering financial damage because of health issues. Yes, even insurance is not complete protection from financial ruin due to health issues. But no one seems to want to point the finger at the cause of the problem.