More than 75 percent said they were insured at the start of their illness, but 38 percent had lost coverage, at least temporarily by the time they filed for bankruptcy. The researchers said health insurance policies, with high deductibles, co-pays, and many exclusions, offer little protection. Among those whose medical bills contributed to their bankruptcy, the study found out-of-pocket costs averaged $11,854. Those with cancer had average medical debts of $35,878.

UpDate: A commenter very astutely pointed out that one of the co-authors of this Harvard study is the well known Steffie Woolhandler who is a diehard advocate for a nationalized health care system and who seems to spend a great deal of her time publishing heavily slanted studies (like the one above) just to prove that life is unfair under a self-serving capitalist health care system and we will all be much better off when the Federal government takes care all our needs.

The full text of the study is here (sans the raw data) courtesy of Physicians for a National Health Program (of course) . The study has several glairing shortcomings;

1. There is no mention of how many of the people in the study had any sort of supplementary or short or long term disability insurance.
2. There is no mention of the economic baseline or financial situation of the average bankruptcy due to medical reasons prior to the onset of the illness.
3. We don’t know how many of these bankrupt people applied for government disability in addition to or after their bankruptcy.
4. There was no control group of people in similar financial circumstances who did not declare bankruptcy.

The oddest thing about the author’s conclusions is that somewhere along the line they seem to have realized that American health care is very expensive and that lapses in insurance coverage (dropped insurance, high deductibles, holes in coverage) is only part of the problem and part of the solution. They acknowledge that the loss of income from permanent or temporary disability as a result of illness is a major contributor to this problem and yet in their conclusion they simply gloss over the need for more individual disability insurance coverage. Instead they go right for the socialist solution;

“Improved programs are needed to replace breadwinners’ incomes when they are disabled or must care for a loved one. The low rate of medical bankruptcy in Canada suggests that better medical and social insurance could substantially ameliorate this problem in the U.S.”

Translation: We want the government not only to pay for all the health care of everyone but to pay all the bills of anyone who is out of work because of illness. This sounds great . . if you are unemployed or have a very low end paying job and pay little in the way of taxes. For the rest of us this means massive tax increases and health care that is rationed by the government. No thanks.

Note to patients; Rather then resorting to massive multitrillion-dollar government social programs you can still learn valuable tips from this study. First, make sure that you know exactly what your health insurance does and does not cover. You might want to make a change. Second, if you can afford it and your family is relatively health you might want to consider looking into enrolling in an individual Health Savings Account (HSA) with a high deductible insurance plan. This way you will still be covered even if you loose your job. Third, seriously consider investing in long or short-term disability coverage especially if you have lots of bills and you are the only breadwinner. Plan ahead. Don’t expect the government to bail you out.