Every 90 seconds, an American family is forced to file for bankruptcy–not because they’ve mismanaged their finances but because their savings have been wiped out by medical expenses.

That shocking statistic is part of a new report from Harvard Medical School and Ohio University that compares 2001 and 2007 bankruptcy data in the US. Researchers found that 60 percent of all bankruptcies in 2007 were driven by unaffordable medical bills, up 50 percent from six years earlier. The odds that a bankruptcy resulted principally from medical expenses was almost 2.4 times greater in 2007 than 2001.

That’s disturbing enough. Even more troubling: many of the families forced to declare bankruptcy had health insurance. Either it didn’t cover many of their expenses or the policies were cancelled when families needed them most. Among bankrupt families, those with health insurance had out-of-pocket expenses averaging $17,749. Those without insurance found themselves with bills averaging $26,971. Among families that had health insurance but then lost it, out-of-pocket expenses totalled an average of $22,568.

Those numbers won’t surprise many Americans who have gone in for health care recently–even basic recommended preventive care and screening. In our family of two, we were recently slammed with more than $8,000 in out-of-pocket expenses after we followed our doctors’ orders and underwent screening colonoscopies. And we have insurance!

The latest statistics underscore a stubborn fact: Fixing the nation’s economy requires fixing the health care system.

Dr. Steffie Woolhandler, MD, an associate professor of medicine at Harvard and primary care physician in Cambridge, Mass.–as well as co-author of the paper published in the August issue of the American Journal of Medicine–didn’t mince her words: “We need to rethink health reform. Covering the uninsured isn’t enough. Reform also needs to help families who already have insurance by upgrading their coverage and assuring that they never lose it.

“Only single-payer national health insurance can make universal, comprehensive coverage affordable by saving the hundreds of billions we now waste on insurance overhead and bureaucracy,” Dr. Woolhandler went on to say. “Unfortunately, Washington politicians seem ready to cave in to insurance firms and keep them and their counterfeit coverage at the core of our system. Reforms that expand phony insurance – stripped-down plans riddled with co-payments, deductibles and exclusions – won’t stem the rising tide of medical bankruptcy.”

James E. Dalen, MD, MPH, a physician and researcher at the University of Arizona College of Medicine in Tucson, agreed. “This study provides further evidence that the US health care system is broken,” he said. “Medical bankruptcy is almost a unique American phenomenon, which does not occur in countries that have national health insurance. These long-time advocates of a single payer system give us another compelling reason to work toward this goal as a nation.”

Opponents of that goal are already mobilizing their considerable forces. Private insurers have resorted to expensive television ads that use scare tactics to protect the status quo. Tragically, the system they are fighting to preserve, while it enriches private insurers and shareholders, is driving more and more American families into bankruptcy simply because they encountered medical problems they couldn’t afford. That’s a shame and a disgrace.

It must change.

Tags: bankruptcy, health insurance, medical expenses