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:
US Code TITLE 11 > CHAPTER 7 > SUBCHAPTER I
§ 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
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.
Fox, Maggie. “Half of Bankruptcy Due to Medical Bills -- U.S. Study” CommonDreams.org
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 Bankruptcy” Health 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. bankruptcies” CNN Health
CNN June 5, 2009. Web. March 23, 2011.