Health costs leading to more bankruptcies

By Brandon Richards

LAKE CHARLES, LA (KPLC) - As Congress debates health care reform in Washington, more Americans are finding themselves deeper and deeper in debt. Much of this a result of rising health care costs.

In fact, according to local bankruptcy attorneys, medically-related bankruptcies are just one piece of the puzzle of the current economic climate.

Lake Charles attorney Gerald Casey says about 20 percent of the bankruptcy cases his office handles are a result from people falling behind on their medical bills.

"They've gone to a hospital and had treatment," Casey said. "Maybe their insurance didn't cover or didn't cover enough, leaving them with a ten thousand dollar or so balance."

A study by Harvard Medical School, the last comprehensive study that examined medical bankruptcies, says nationwide 60 percent of bankruptcies are a direct result from unpaid medical bills. They study also found more than three-quarters of people filing medically-related bankruptcies actually had health insurance.

"Lately here because of the economic turn down, we're seeing more people having problems because of wage reductions or because they've been laid off," Casey said.

One rising trend is the number of people who are using high-interest credit cards to pay their health care bills, but this tends to only make the situation worse.

The medical bankruptcy problem may be even worse, since the Harvard study was complete a year before the current economic recession.

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