Families that were just barely keeping afloat before the financial crisis are now facing a scary future. Particularly if they’ve got high medical bills.
AP: The connection between medical debt and the current credit crisis isn’t a direct line, but it’s strong enough to prompt Mike Leavitt, head of the U.S. Department of Health and Human Services, to declare at a recent news conference, “If we had any idea how many mortgages were foreclosed because people were crowded out by medical issues . . . Health-care costs are at the heart of many of the things happening.”
A Kaiser Family Foundation poll conducted in April, way ahead of the current economic meltdown, found that 28 per cent of Americans reported that they or their families had had a serious problem paying health insurance or medical bills because of changes in the economy.
And data from the Commonwealth Fund puts 41 per cent of working-age adults — 72 million people — as having medical debt or having a problem paying medical bills, up from 34 per cent — or 58 million people — in 2005.
Many families find themselves managing until a crisis sends them over the edge. “The way people get in trouble is have substantial debt they’re managing, they’re paying mortgages and paying off credit card balances, but they’re managing. Then a shock occurs,” said Dr. Steffie Woolhandler, an associate professor of medicine at Harvard Medical School and co-author of a medical bankruptcy paper from the Consumer Bankruptcy Project. “In bankruptcy, in about half of those cases, that shock is a medical shock.”
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.