Unemployment is high and retirement accounts have almost disappeared for many folks in the wake of the current recession. Housing costs have plummeted, too. So it comes as no shock that data just released by the Administrative Office of the U.S. Courts indicates the whole number of U.S. bankruptcies filed during the first three months of 2009 increased 34.5 percent over the same period in 2008. But what is astonishing is a new Harvard study available in the August 2009 issue of The American Journal of Medicine which reveals fiscal woes starting hitting Americans even before the officially documented economic downturn -- and the main culprit was illness and medical bills. The findings of the first-ever national random-sample survey of bankruptcy filers, conducted by researchers at Cambridge Hospital and Harvard Health School, Harvard Law School and Ohio University, show that in 2007, 60% of all bankruptcies in the United States were driven by sickness and related medical statements. Moreover, the share of bankruptcies attributable to health woes over the past few years has been on the upswing. The investigators surveyed a indiscriminate national sample of 2,314 bankruptcy filers in 2007, studied their court records and then interviewed 1,032 of these fiscally strapped people. Bankruptcies were selected as "health" based on the stated reasons a person had for filing, income loss due to sickness and the quantity of their medical bills they owed. By relying on identical definitions in both 2001 and 2007, the researchers concluded that the share of bankruptcies caused by health concerns had soared by approximately 50 percent throughout those years. In fact, the chances a bankruptcy had a health cause were 2.38 fold higher in 2007 than in 2001. The findings of the research revealed that a variety of conditions pushed many middle-class Americans over the edge into bankruptcy, even when they had health insurance. For example, 92 percent of the medically bankrupt ended up in that financial state due to high health bills. And numerous families who had medical insurance were under-insured, leaving them responsible for thousands of dollars in medical statements they couldn't pay. In fact, out-of-pocket medical charges averaged just under $18,000 for those who had private insurance and yet went bankrupt due to health expenses. Uninsured patients were faced with $26,971 in out-of-pocket expenses.
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The results of the first-ever national random-sample survey of bankruptcy filers, conducted by researchers at Cambridge Hospital and Harvard Health School, Harvard Law School and Ohio University, show that in 2007, 60% of all bankruptcies in the United States were driven by sickness and connected medical statements. Moreover, the share of bankruptcies attributable to medical woes over the past few years has been on the upswing.
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