The Inseparability of American Financial Security from the Healthcare Crisis
A recent article released in the American Journal of Medicine has concluded what many working families already know: Americans cannot afford to get sick. The research, based on a random sample of 2,314 bankruptcy filers across five states in 2007, returned some truly alarming statistics: medical expenses underlie 62.1% of all American personal bankruptcies. Furthermore, the majority of those declaring bankruptcy were well educated home owners strongly situated in the middle-class and, perhaps most shockingly, 75% of those bankruptcies actually had some form of health insurance when their woes began.
Dr. David Himmelstein, the lead on the Harvard / Ohio University research team that wrote the article, summarized their findings nicely:
“Unless you’re Warren Buffet, your family is just one serious illness away from bankruptcy”
Having seen so many of my clients speak about their experience with health cost related bankruptcy, I don’t know that one can overestimate the incredible emotional trauma caused by the anxiety, shame and fear of filing for bankruptcy. Of course, while the emotional costs of bankruptcy are high, the financial costs are higher still. In addition to wages garnishment and the potential seizure of a filer’s assets, bankruptcy ruins your credit history and can essentially kill any financial goals the filer had. Bankruptcy is a last resort for an individual with massive debts and no other options; furthermore with the passing of the BAPCP Act of 2005 our government’s general attitude seems to be encouraging further punishment of the already broke. To imagine that the world’s richest nation has so many of its working and middle class driven to this desperate state solely on the basis of their corporeal frailty offends the conscious.
This outrage is compounded when you consider that Americans are paying through the nose for this inept health coverage. The average American’s annual healthcare expense is easily the highest in the world, estimated to be between $7,400 and $7,900. What do we get for this massive sum? We get a health care system that leaves 46 million Americans uninsured (~16% of the population) and was ranked 37th in the world in overall health system performance care by a 2000 World Health Organization Report. The United States was ranked well behind Oman (8), the United Arab Emirates (27) and Morocco (29). We did however just beat Slovenia (38). Take THAT Slovenia!
I apologize for my glibness but let me restate that last paragraph summarily:
Our healthcare system costs more than any other, ignores one in six Americans, spells financial ruin should we actually get sick and rivals Slovenia in quality.
In my next two posts, I’m going to address just how bad the United States healthcare crisis is, especially for working families, and then briefly explore some alternatives models. Before looking ahead though, I think it’s important that if we at the Center for Economic Progress are going to be serious about prioritizing American working class financial security we must recognize the centrality of this issue. The simple fact is that the financial health of hard working Americans is inseparable from the current health care crisis.
Scott i really enjoyed reading your article and feel led to share my recent experience with health care in this country. Not too long ago, i had to take some time off work because i had a growth in my nose that had to be removed. I had day surgery in a hospital. I was probably at the hospital for three hours. Since then, i have received multiple bills, from different doctors and organizations. My insurance meanwhile, for some reason just decides they’re not going to cover the majority of the expenses, and i owe about $6000! Insurance covered probably a total of $1500. Thanks a lot, what do we pay $500 a month for? What do i have insurance for? I plan to negotiate my position and hold the insurance company accountable for more of this bill. But a couple things jump out at me from this situation:
1. The incredibly high monthly cost of insurance for me, a healthy 25 year old male…it comes to $500 per month!
2. The poor quality of coverage this provides me with, i would have been better off if my employer just gave me the $500 every month, that would have covered more than the insurance.
3. The incredibly high cost of the health care i received.
Our health care system is plagued with inefficiencies, and is characterized by poor value, not just in one aspect, but rather from all angles. Take for another example the extremely high costs of prescription drugs in this country that are manufactured exclusively by one pharmaceutical company trying to recoup and profit all of the research and development money while their product is still patent protected.
Thankfully, i will not have to file for bankruptcy, but for someone who is trying to go to graduate school in the fall, who is also helping people achieve enrollment in higher education, now may have to defer my own plans to be able to go to graduate school due to this medical bill, and false sense of security provided by our overpriced medical coverage.
[...] As we’ve already discovered, the United States’ health system is of middling quality in comparis… Now, like many Americans, I’m not thrilled to see The United States rank anything lower than 1 but we should be level headed and say that the performance of our healthcare system is not the worst in the world. It is simply middling. Not terrible. Not great. No grand catastrophe. [...]