Americans are increasingly at risk of financial ruin due to illness and medical expenses, according to a new study released yesterday by the American Journal of Medicine. The researchers found that illness or medical bills contributed to nearly two thirds, or 62 percent, of all bankruptcies in 2007—before the major impact of the housing collapse and current economic downturn. That’s a 50 percent increase over a similar survey in 2001 by the same researchers.Why do people go bankrupt when they get sick? Is it because they do not have health insurance or that their insurance coverage doesn't actually protect them when they need it by denying coverage or increasing the out of pocket costs.
Just over three-quarters of people who suffered a bankruptcy due to illness were insured at the onset of their health issue. But the total out-of-pocket medical costs for those who had insurance when they became ill was a steep $17,749, on average. For those who didn’t have insurance, the average debt was $26,971.
These figures underscore the need for improving our health insurance system.
Why is this? Because, we do not properly regulate the insurance companies. Again, capitalism requires regulation to function properly. Unregulated business is fine for investors but not for citizens and consumers. It is the governments job to protect its citizens from unregulated power.