The Study' S Findings Also Indicated Medical- Related Bankruptcies Often Hit Middle- Class Families Hard

Category: Finance, Insurance.

Catastrophic illnesses are claimed to have triggered approximately half of all personal bankruptcies in the United States.

Researchers found that many private insurance plans that offer limited catastrophic coverage were inadequate and offer little financial security for less severe illnesses. According to recent findings from a Harvard University study, most people who go bankrupt because of medical problems also have health insurance. Questionnaires were distributed to 1, 771 bankruptcy filers in 2001 in California, Pennsylvania, Illinois, Tennessee and Texas. Sickness and rising medical bills were cited as the cause, for 42 percent, in part of the personal bankruptcies. According the study, a total of 46 million personal bankruptcies were filed in the United States during 200 Nearly 1, 000 individuals questioned gave detailed interviews about their financial and medical circumstances. The numbers grew to 55 percent when an additional three other factors were included as triggers for medical- related bankruptcies: birth, death and gambling addiction. The study also cited that a majority of individuals looking for court protection from creditors had health insurance, with more than three- quarters reporting they had coverage at the beginning of the health catastrophe that triggered their bankruptcy.

The study assessed that medical bankruptcies currently affect approximately 2 million Americans annually, 000 children, including 700. The study also found that 38 percent of the participants had temporarily lost coverage by the time bankruptcy was filed, with catastrophic sickness or injury frequently leading to both job and insurance loss. High- priced coverage through COBRA, is meaningless if, while well intentioned people can' t afford to pay for it. Unfortunately, it's become apparent that, serious illness often, for many Americans leads to job loss, which also means loss of health insurance. Bankrupt families also lose more than just assets. A third had their utilities shut off, and nearly two- thirds skipped needed doctor or dentist visits.

One out of five families goes without food. The study's findings also indicated medical- related bankruptcies often hit middle- class families hard. The study did not, examine how many, however bankruptcy filers were from dual- income families, where both partners had medical insurance. With 56 percent of the filers being college graduates who owned a home. The Harvard findings echo previous studies which have generally reported that a majority of bankruptcy filers cite medical problems as a primary cause of bankruptcy, as well as other factors, job loss and, including easy credit financial mismanagement. If you' re uninsured, concerned about your current individual health plan's catastrophic coverage, or simply tired of paying an arm and a leg for major medical health insurance, you should take a look at the revolutionary comprehensive individual health insurance solutions created by companies specifically for young, healthy individuals. Many health insurance experts suggest that the Harvard study did not adequately explore the role disability income protection plans and personal savings can play in helping individuals with medical problems avoid bankruptcy.