A lot of discussion about universal healthcare pros and cons are going on right now. And I wanted to point out, that in many ways the US already has a plan for paying for healthcare: bankruptcy. Its a sneaky little tax that filters through several levels until it gets back to tax payers. 62% of bankruptcies filed are predominately medical debt. I worked in the bankruptcy field and I looked at a lot of bankruptcies–I have heard the arguments that folks are bankrupt because of wastefulness, credit cards, luxuries, nice shoes, nice cars, what have you. It frankly is not true most of the time. People go bankrupt because of staggering medical bills, in the tens to hundreds of thousands. Private insurance companies want you to believe they are the better option, but 73% of those who went bankrupt because of medical bills, had medical insurance.
What happens when someones debts are discharged under a bankruptcy? The creditors absorb the costs. Thats right, they just don’t get paid, or they get paid a small amount from the debtor’s assets. What is the hospital, doctor, or other healthcare provider going to do then? Raise costs for everyone else who can pay and raise costs for the insurance companies. Then the insurance companies raise costs for customers and employers who provide it to their employees.
Imagine a USA where the burden for paying for healthcare was spread out among tax payers in some clever way devised by congress. Very possibly, there would be less people in crippling debt, 62% less people going bankrupt–73% of which were paying for part of their services already through insurance.
You would think that the majority of bankruptcies are families with children, but as a bankruptcy legal assistant, I saw near as many that were singles and childless/childfree couples. This is an issue that affects us too. This may seem overly politcal for this blog, but I found it unfortunate that most people don’t know the reality of the system, we are already paying for universal healthcare, its just in a roundabout way that creates more and more situations where more people go bankrupt. The cycle keeps getting worse, as costs go up more bankruptcies, then there are more costs, in 1981 only 8% of bankruptcies were medical debt driven. Lets figure out some way to stop the cycle. I think it is wrong that our universal healthcare method (bankruptcy) is such a dire choice.