Most Bankruptcies Stem from Medical Bills

June 2009

Almost two-thirds of bankruptcies are caused by medical bills, according to a new study done by researchers at Harvard Law School, Harvard Medical School, and Ohio University. The report also found that even those with health insurance can find themselves in financial distress.

In 2007, medical expenses lead to 62.1 percent of bankruptcies, and from 2001 to 2007, the number of bankruptcies caused by medical problems rose by about 50 percent. Among those who filed for bankruptcy, people with private insurance reported average medical bills of $17,749, and those without insurance reported $26,971 in medical expenses.

Hospital costs accounted for 48 percent of expenses, prescription drugs for 18.6 percent, doctor's bills for 15.1 percent, and insurance premiums for 4.1 percent. The most expensive health conditions include:

• Neurologic, $34,167
• Diabetes, $26,971
• Injuries, $25,096
• Stroke, $23,380
• Mental illnesses, $23,178
• Heart disease, $21,955