A landmark study in 2009 found that the most significant cause of personal bankruptcy in the United States was medical illness. Approximately 62% of personal bankruptcies were related to medical illness, either medical debt or loss of income due to illness, and three quarters of those who went bankrupt had health insurance at the onset of their illness. They were primarily well-educated, middle class home owners.
It was hoped that the Affordable Care Act (ACA) would reduce the number of personal bankruptcies due to medical illness.
Now we know that it didn’t. A new study found that 65.5% of personal bankruptcies were due to medical bills (58.5%) or illness (44.3%) or both.
While more people have health insurance under the ACA, a greater proportion of them are underinsured, meaning their healthcare costs, excluding premiums, are greater than 10% of their income. A new survey found that 45% of insured adults under 65 are underinsured, representing 87 million people. The greatest increase was among those who obtain health insurance through their employers.
A national improved Medicare for all healthcare system would provide comprehensive coverage to everyone and eliminate premiums and other out-of-pocket expenses. People would be covered for life, when they are working and when illness or accidents occur and they can’t work. It would solve these two major problems of bankruptcy due to medical illness and underinsurance.