Here is an article from Reuters discussing a study by Harvard Law and Medical schools as well as Ohio University stating that medical bills are involved in more than 60% of personal bankruptcies. They also note that 75% of these folks HAD health insurance. Further, they cited that the typical bankruptcy victim was well-educated, a homeowner, and middle class.
The report continues making claims how Americans are one illness away from bankruptcy, even with health insurance. This provides an opportunity to bash health insurers by painting them as inefficient organizations that drop people at the first sign of illness.
Essentially, the researchers twist data to make a case for government provided health care. However, there are a few points these academics miss…or misconstrue.
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Only 29% of those claiming bankruptcy cited medical as the reason for bankruptcy. The researchers use the 60% number to make it seem like medical expenses are the sole driver for bankruptcy. However, the study shows that 60% had medical bills, not that they were the main culprit. They are clearly misleading folks.
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The misleading continues when they say 92% of those with medical bills had medical debts at least 10% of income. The key here is this number addresses the 60% with medical bills, not the full bankruptcy population. But, the researchers word this to lead readers to think 92% of the total population had these bills.
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From the data, it appears that even those with medical debt weren’t being driven to bankruptcy by medical debt. Having a debt that is 10% of income isn’t that extravagant. It appears that it certainly contributed, but more than likely these folks had other issues that pushed them over the edge. It could be a loss of income, credit card debt, unaffordable mortgage, etc.
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Out of nowhere, these academics state that socialized medicine will eliminate the bureaucratic waste and insurance overhead. My comment is what are they smoking? Do they honestly believe that having the federal government run healthcare will reduce paperwork, overhead, or the bureaucracy? They cite no studies or facts to back this up because they can’t. This conclusion is absolute hogwash.
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They state that a single payer system will lower health costs. It may lower health costs for participants, but it will come at the expense of future generations. The federal government can lower costs artificially unlike an insurance company because the federal government can either borrow absurd amounts or print money whereas the insurance company must work on cash flow and is limited in how much debt they can attain. Medicare is the perfect example. The federal government does not have to account for future expenses and only operates on a cash accounting basis. An insurance company could not operate knowing that they are responsible for enormous future benefits without having to charge for it today. This is why Medicare is underfunded by $36,000,000,000,000 (this is $36 Trillion for those who are amazed at the number of zeros).
I am working on a more detailed piece on socialized medicine, but I thought a misleading article such as this needs to be addressed immediately.