This is the time of the year that I go on a rampage against the health care industry. Mainly because it’s the time of year that my health insurance is renewed — and my premium usually goes up, in spite of the fact that we rarely use our health insurance. (This year, I was lucky enough to be able to reduce my health insurance premium. But it took a bit of work, and more than 45 minutes on the phone with a representative from my health insurance program.)
So when I saw that 60% of bankruptcies are caused by medical bills, I took immediate interest. But here’s the real kicker, reports Reuters:
More than 75 percent of these bankrupt families had health insurance but still were overwhelmed by their medical debts, the team at Harvard Law School, Harvard Medical School and Ohio University reported in the American Journal of Medicine.
That’s right. Having health insurance probably won’t protect you from bankruptcy in the case of a serious illness. It can help you reduce costs for some things, and can protect you from financial catastrophe on some level (like in the case of my father’s heart attack earlier this year — but it still has taken 6 months for my parents to pay back their portion of the bill), but if you have a serious illness or some other large medical need, your health insurance policy provides flimsy protection. Especially since it will probably be cancelled as soon as the issue is resolved. And, since you have had this illness, getting new coverage may be impossible. Or at the very least, prohibitively expensive.
Recent polls suggest that Americans at least want a public option that they can turn to when the private insurance companies fail them. The Kaiser Health Tracking poll from April showed that 67% of Americans support a public option for health care. This public option is not universal health care by any stretch. Premiums would still have to be paid. But they would be lower than what current insurance companies are charging.
How would it be if insurance companies had to compete with the government? It might mean that $50 – $150 million executive salaries would have to be reduced in order to cut costs so that private companies could be competitive. Or maybe pharma companies would spend less money on marketing (which takes up more than 60% of their profits — research accounts for less than 20%) so that their drugs could be less expensive, also reducing insurance costs. Even better idea: What if health insurance companies, to be more competitive, started offering premium credits to people who were improving their health?
In any case, it is clear that most of our bankruptcies are in actuality caused by health care costs — not by outrageous credit card spending (although that plays its roll, I’m sure). Could reforming health care be a help to our ailing economy? Bottom line: Something needs to be done in order to help alleviate health care costs. It’s one of the major things impeding many people’s personal finances.
image source: Daylife