Individual medical bankruptcy has been in the headlines for quite some time now. “Medical bills prompt more than 60 percent of U.S. bankruptcies” (Tamkins) is representative of most headlines on this subject. However, this is an intentionally deceptive paraphrasing of a deceptively worded statement. The study quoted in the article does claim that “62.1% of all bankruptcies in 2007 were medical” (Himmelstein et al. 1) but that does not mean that they were caused by medical bills and it’s not the percentage of all bankruptcies. That percentage comes from a table in that study with the notation: “*Percentage based on recent homeowners rather than all debtors” (Himmelstein et al. 3). Not only are the results of these two Harvard studies being misreported, the studies themselves are exercises in deception.


    The sleight of hand begins with the first of these studies published in 2005 about bankruptcies in 2001. It proclaims that “Nearly half (46.2 percent) … of debtors met at least one of our criteria for 'major medical bankruptcy.' Slightly more than half (54.5 percent) … met criteria for ‘any medical bankruptcy’” (Himmelstein et al. 66). This may sound scary but that is actually 1 out of every 364 or 0.27% of Americans. This is the percentage for “Major Medical Bankruptcy” and “Any Medical Bankruptcy”, defined by Himmelstein et al. as:

Under the rubric “Major Medical Bankruptcy” we included debtors who either (1) cited illness or injury as a specific reason for bankruptcy, or (2) reported uncovered medical bills exceeding $1,000 in the past years, or (3) lost at least two weeks of work-related income because of illness/injury, or (4) mortgaged a home to pay medical bills. Our more inclusive category, “Any Medical Bankruptcy,” included debtors who cited any of the above, or addiction, or uncontrolled gambling, or birth, or the death of a family member. (Himmelstein et al. 65)

Lost wages due to illness or injury, becoming a crack-head, gambling losses, buying diapers, and funeral expenses are not medical bills and health insurance will not pay for them. These broad definitions are intended to imply that these are the percentages of medical bills causing bankruptcies.


    A careful reading of the study reveals a different picture altogether. It is full of misdirection. A law professor in San Diego wrote a brief article that highlighted a few of the dishonest tactics. In her most damning observation, she notes:

Buried in the study is the fact that only 27 percent of the surveyed debtors had unreimbursed medical expenses exceeding $1,000 over the course of the two years prior to their bankruptcy. Presumably 73 percent — the vast majority — had medical expenses during that two-year period of $1,000 or less. Had that figure been recited up front, it would have been obvious that the proportion of bankruptcies driven by unmanageable medical debt was nowhere near half. (Heriot)

However, she never mentioned the scale of bankruptcy due to medical bills. Comparing this twenty seven percent of bankruptcies to the population of the U.S. at the time, reveals that less than 1 out of 600 Americans filed for bankruptcy with more a thousand dollars worth of unpaid medical bills, in 2001. Heriot goes on to damage this study’s credibility even more, by highlighting the author’s motives to deceive.


    Fear mongering, real or imaginary, requires something to fear. Medical insurance is a recurring topic in the study, as if it would pay someone’s mortgage when they are too sick or injured to work. Himmelstein, Woolhandler, and their coconspirators have no interest in shedding light on the reality of medical bankruptcy. Interviews with the study’s authors reveal the scapegoat to be feared. In an article about the study, Himmelstein is quoted as saying “Most of the medically bankrupt were average Americans who happened to get sick. Health insurance offered little protection” (Fox). He made no attempt to explain how health insurance or free healthcare would conceivably replace lost income, from being too sick or injured to work. Neither did the most infamous coauthor of these studies, Woolhandler, said “Covering the uninsured isn't enough. We must also upgrade and guarantee continuous coverage for those who have insurance” and that many employers and politicians were pressing for what she called “stripped-down plans so riddled with co-payments, deductibles and exclusions that serious illness leads straight to bankruptcy” (Fox). While hyping the rare occurrences of medical bills actually leading to bankruptcy, the authors never mention the final safety net. Once someone loses all their income because they can no longer work, they qualify for Medicaid. It won’t pay the mortgage but neither will the authors’ false solution of Government health care. Medicaid is Government healthcare.


    As deceptive as the first study was, it does not compare to the next one. The 2009 study, based on bankruptcies in 2005, is bolder in its deception and contains at least one easily verified lie. On the first page it declares “Using identical definitions in 2001 and 2007, the share of bankruptcies attributable to medical problems rose by 49.6%. In logistic regression analysis controlling for demographic factors, the odds that a bankruptcy had a medical cause was 2.38-fold higher in 2007 than in 2001” (Himmelstein et al. 1). The number of bankruptcies in 2001 is mentioned in the report while the number of bankruptcies in 2007 is intentionally omitted. There were 44% fewer bankruptcies in 2007 than there were in 2001. Notice that they’re concerned with the percentage of bankruptcies that, in this case, fit the 2005 definition of “Major Medical Bankruptcy”. 46.2% of the 1,437,312 bankruptcies in 2001, or 664,038, and 62.1% of the 798,370 bankruptcies in 2007, or 551,674, fit that definition. This means that there were 112,364 fewer bankruptcies in 2007 that met that definition. They are calling a 17% decrease in “Major Medical Bankruptcies” a near 50% increase. The odds of someone filing for a bankruptcy fitting that definition in 2001 was 1 out of 429, or 0.23% of the US population. By 2007 the odds had dropped to 1 out of 547, or 0.18% of the US population. This is not more than twice as likely. This is 21% less likely to experience a “Major Medical Bankruptcy”.


    The truth about fewer bankruptcies is flirted with, but only as context for the big lie. The 2009 report states:

Between our 2001 and 2007 surveys, Congress enacted the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), which instituted an income screen and procedural barriers that made filing more difficult and expensive. The number of filings spiked in mid-2005 in anticipation of the new law, then plummeted. Since then, filings have increased each quarter. They are likely to exceed one million households in 2008, representing about 2.7 million people. BAPCPA’s effects appear nonselective. Current filers differ from past ones mainly in having struggled longer with their debts. New restrictions fall equally on medical and nonmedical bankruptcies, with no preferences for medical debts or sick debtors. It is implausible to ascribe the growing predominance of medical causes of bankruptcy to BAPCPA. (Himmelstein et al. 5)

It is not only plausible to attribute the purported increase of medically related bankruptcy to the Bankruptcy Abuse Prevention and Consumer Protection Act; it is the only rational explanation. The authors of these studies admit that BAPCPA reduced the total number of bankruptcies in 2007 but they don’t admit that there was a 44% decrease and they completely lied about the law’s effects on medically related bankruptcy.


    BAPCPA forces the court to assume that the debtor purposefully ran up debt in order to file bankruptcy. By shifting the burden of proof from the court to the filer of bankruptcy, the law makes filing for bankruptcy more difficult. When filing for bankruptcy, the concept of innocent until proven guilty has been replaced by the presumption of guilt. From the creditor’s point of view, BAPCPA stopped court sanctioned theft. The debtor must now prove that special circumstances justify debt forgiveness:

§ 707. Dismissal of a case or conversion to a case under chapter 11 or 13
(i) In any proceeding brought under this subsection, the presumption of abuse may only be rebutted by demonstrating special circumstances, such as a serious medical condition or a call or order to active duty in the Armed Forces, to the extent such special circumstances that justify additional expenses or adjustments of current monthly income for which there is no reasonable alternative.

With “a serious medical condition” as one of the only two specifically mentioned justifications for debt forgiveness, there is no doubt that it is the cause of the increase in percentage that was actually a decrease in total.


    Successful propagandists know how to imply falsehoods without expressing lies. Dishonest statisticians are equally adept at similar means of disinformation. These two, falsely revered, Harvard studies were created by both. Honest, educated people don’t claim, in a nationally published and peer reviewed study, that a 17% decrease is a 50% increase because of simple oversight. The authors are Harvard professors. The studies were agenda driven, from inception. The agenda is Government health care and the destruction of the multibillion dollar health insurance industry. Free health care sounds like a solution to medical bankruptcy but the single most common reason given by homeowners for filing for bankruptcy is “Loss of income due to illness” (Himmelstein et al. 3). These studies grossly exaggerate false problems in order to promote Government health care that won’t pay the bills when someone is too sick to work.




Works Cited

Fox, Maggie. “Half of Bankruptcy Due to Medical Bills -- U.S. Reuters February 2, 2005. Web. March 23, 2011.

Heriot, Gail. “Misdiagnosed” National Review Online National Review February 11, 2005. Web. March 23, 2011.

Himmelstein et al. “Illness And Injury As Contributors To BankruptcyHealth Affairs (2005): n. pag. Web. March 23, 2011.

—. “Medical Bankruptcy in the United States, 2007: Results of a National Study American Journal of Medicine 122.8 (2009): 741-746 Print.

Tamkins, Theresa. “Medical bills prompt more than 60 percent of U.S. bankruptciesCNN Health CNN June 5, 2009. Web. March 23, 2011.

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