A recent study, authored by Dr. David Himmelstein, highlights the effects of medical bills on bankruptcy filings. The study, titled "Medical Bankruptcy in the United States, 2007: Results of a National Study 2007" finds that in 2007, 62.1 percent of all bankruptcies were caused by high medical expenses.

Among other things, Dr. Himmelstein cautions that state legislators, looking for somewhere to further cut budgets in light of record deficits, should not cut medical benefits.

The 62 Percent Rate Calculated Before the Great Recession

The warning is based on the results of the study, which showed a 49.6 percent increase from 2001 to 2007 in medical bankruptcies. This means there was a large increase even before the great recession began.

The study implies bankruptcy filings caused by high medical expenses will continue to rise in 2010 and 2011.

With many people's insurance coverage inadequate and many more people losing their jobs, medical bills will force many more people to file for bankruptcy.

Inadequate Insurance

Dr. Himmelstein was quoted as saying, "Most people who are driven into bankruptcy by illness and medical bills actually have coverage but it's such inadequate coverage that it doesn't keep them from financial ruin. They're facing huge premiums and copayments and deductibles - and things that aren't covered by their insurance."

The Massachusetts state health-reform law, which served as a model for the national debate, he notes, "g[a]ve people really inadequate coverage. It traded uninsurance for underinsurance. That really didn't work. When people were seriously ill, they ended up with such huge medical bills that they really didn't have coverage that could keep them out of the bankruptcy court."

In other words, if state legislators think they can save money by cutting medical benefits, the result may be an increase in the number of bankruptcy filings.

Bankruptcy can be a refuge for people struggling with medical bills. Bankruptcy will end the harassing phone calls and flood of bills demanding payment. An experienced attorney can answer your questions and guide you through the bankruptcy process toward a fresh start and peace of mind.