Article 43


Tuesday, November 28, 2023

Dying Broke

image: uninsured
According to a STUDY published in February 2019, about 530,000 bankruptcies filed annually are because of debt accrued due to a medical illness.
- Medical Emergency Redux, 2020
People who can’t afford essential medical care often fail to get it, and always have - and sometimes they die as a result… most uninsured Americans either have low incomes and cannot afford insurance, or are rejected by insurers because they have chronic conditions… So the freedom to die extends, in practice, to children and the unlucky as well as the improvident. And the rights embrace of that notion signals an important shift in the nature of American politics… modern conservatism is actually a deeply radical movement, one that is hostile to the kind of society weve had for the past three generations - that is, a society that, acting through the government, tries to mitigate some of the common hazards of life through such programs as Social Security, unemployment insurance, Medicare and Medicaid.
- Free To Die, 2011
Republicans must love to cheer. At their presidential primary debates last year, the audiences boisterously cheered candidates who raised their hands in support of waterboarding; Texas Gov. Rick Perrys boast about how many prisoners he had sent to the death chamber; Rep. Ron Paul’s declaration that an uninsured 30-year-old man who needs medical care should be LEFT TO DIE; and HERMAN CAINE’S GRIPE, If you don’t have a job and you’re not rich, blame yourself.”
- Republican Redux 3 - How Conservatives Lost Their Moral Compass, 2012


Our country’s failure to provide affordable long-term care for the elderly is already a crisis

By dartgan
Daily Kos November 24, 2023

Old age is generally not a good time for severe emotional shocks. But millions of elderly Americans, along with an equal if not greater number of their (mostly) middle-aged children, are quietly dealing with a particularly brutal one right now, that is fairly invisible and unfolds in painfully slow motion. For the elderly parent, the shock is realizing that as their bodies and minds gradually deteriorate with age, they have wholly insufficient means to afford adequate long-term care for themselves. For their children (if any)at the exact same time - the grim reality facing many of their parents hits home just as hard, just in a very different fashion.

For those who have yet to face this unpleasantness - and even for those lucky enough to escape it - rest assured it is an eye-opening experience. It comes heavily laden with feelings of guilt, embarrassment, and in some cases outright panic and anger. Depending on the relationship between the parents and their children (assuming there is a relationship), it can stretch and even sever the tight, emotional familial bonds that both probably assumed would last all their lives. Often it arrives with the stunning revelation that for most people there is no one else - no government agency or program, no church, no social support network - to bail you out. In this country, except for those truly impoverished, when this crisis hits, you and your loved ones are essentially on your own.

Many developed nations have PROGRAMS IN PLACE to alleviate or eliminate the costly burden of long-term care foisted on their elderly populations. The U.S., however, has no such program beyond Medicaid, and Medicaid will generally not cover the cost of facility care unless or until the elderly person’s financial resources have been otherwise completely drained. Likewise, with very limited exceptions, Medicare does not cover the cost of long-term care, either at home, in an assisted living facility, or a nursing home. The cost of such care can easily exceed $100,000 per year in many areas of the country, and long-term care insurance is no longer affordable or even available for most people. Social Security will only cover a pittance of such costs, and for the vast majority of Americans adequate pensions are a thing of the past. That means unless your elderly loved ones are reduced to near poverty, all costs must be borne by them or their relatives (usually that means their children). If they have not saved enough money to afford such facility or in-home care (and most have not) their options, aside from relying on an increasingly fragile and inadequate Medicaid system, are extremely limited.

For a number of reasons the political will necessary to solve this problem has apparently all but vanished from the national conversation. Accordingly, and as reported by Reed Abelson and Jordan Rau, writing for NEW YORK TIMES, most people in what passes for this country’s ғmiddle class will inevitably, sooner or later, come face to face with what can amount to a waking nightmare. For some of them, it will literally mean financial ruin. As the nationԒs elderly population grows, and most ominously within the coming decades, the consequences of ignoring this problem are going to be devastating.

No parent wants to burden their children with the staggering costs of long-term care. But as people in this country live longer thanks to advances in modern medicine, almost all of them inevitably reach the point where they can no longer live unassisted in their homes. For many elderly folks it starts with simple falls, then more severe falls, and finally catastrophic falls. For others its a less dramatic process of cognitive decline, often to the point where they put themselves in physical danger. Or they may simply have a medical condition that otherwise debilitates them and worsens with age. But inevitably there comes a point where a very difficult decision must be made for the elderly loved one(s) to leave their home, and the pleasant myth of spending one\s last years in the embrace of ones children and grandchildren has to yield to reality.

Abelson and Rau’s report examines the lives of several elderly parents and their children who, unable to afford the cost of long-term care, have attempted to care for their parents at home. As they explain, “Millions of families are facing such daunting life choices - and potential financial ruin - as the escalating costs of in-home care, assisted-living facilities and nursing homes devour the savings and incomes of older Americans and their relatives.

The lack of affordable long-term care is not a new problem in this country, but the current demographics paint a particularly bleak scenario for the near future. In the U.S. those affected are now mostly the ԓBaby Boomer generation, but, as the authors note, By the year 2050 ԓthe population of Americans 65 and older is projected to increase by more than 50 percent, to 86 million, according to census estimates, while the percentage of those 85 and older will triple. So, this promises to be a snowballing, inexorable crisis affecting Generation X and each successive demographic in due time. And the costs are only getting higher.

As the authors explain:

The United States has no coherent system of long-term care, mostly a patchwork. The private market where a minuscule portion of families buy long-term care insurance has shriveled, reduced over years of giant rate hikes by insurers that had underestimated how much care people would actually use. Labor shortages have left families searching for workers willing to care for their elders in the home. And the cost of a spot in an assisted-living facility has soared to an unaffordable level for most middle-class Americans. They have to run out of money to qualify for nursing home care paid for by the government.

But that “nursing home care paid for by the government” is already in serious jeopardy, mainly because there aren’t enough people to staff those nursing homes. As a result, in states like Pennsylvania (in 2021 the FIFTH LARGEST STATE in population for seniors over 65) the waitlist to even be admitted to a nursing home can number as many as 2,000 people ԓon any given day, according to Jordan Anderson, reporting for the PITTSBURGH POST-GAZETTE. Often these are for homes far outside the area where the elderly person currently lives. As Anderson observes, the COVID-19 pandemic accelerated the exodus of staff from such facilities, and they have not returned.

For their Times article Abelson and Rau partnered with the Kaiser Family Foundation Health News, interviewing families and facilities that provide long-term care to the elderly. They also reviewed data from the Health and Retirement Study, a panel study known as HRS funded by the federal government that surveys a representative sample of the U.S. population regarding their long-term health care needs. The authors cite HRS data indicating about 8 million Americans over age 65 report “that they had dementia or difficulty with basic daily tasks like bathing and feeding themselves - and nearly three million of them had no assistance at all.” Of course, this is only a fraction of the number of elderly people who will have to face similar difficulties by 2050.

For their Times article Abelson and Rau partnered with the Kaiser Family Foundation Health News, interviewing families and facilities that provide long-term care to the elderly. They also reviewed data from the Health and Retirement Study, a panel study known as HRS funded by the federal government that surveys a representative sample of the U.S. population regarding their long-term health care needs. The authors cite HRS data indicating about 8 million Americans over age 65 report “that they had dementia or difficulty with basic daily tasks like bathing and feeding themselves - and nearly three million of them had no assistance at all.” Of course, this is only a fraction of the number of elderly people who will have to face similar difficulties by 2050.

Yet, as the authors emphasize, this country remains woefully unprepared (or unwilling) to address even the current crisis.

The United States DEVOTES A SMALLER SHARE of its gross domestic product to long-term care than do most other wealthy countries, including Britain, France, Canada, Germany, Sweden and Japan, according to the Organization for Economic Cooperation and Development. The United States lags its international peers in another way: It dedicates far less of its overall health spending toward long-term care.

In fact, as the Times authors note, the framework for providing long-term medical care in this country has remained unchanged since the Johnson administration, while the percentage of Americans aged 85 and older has increased sixfold.

Many people live under the illusion that this country sufficiently provides for its elderly through Social Security and Medicare. The reality is that as conditions currently stand, it does not. Medicare - which many people mistakenly believe will cover the cost of long-term care - will only cover very short-term rehabilitation or post-surgery stays in a nursing home or rehab facility. And Medicaid - as discovered by Gay Glenn, a woman interviewed by the Times reporters who placed her mother in a Kansas nursing home - is currently designed to ensure that its participants be divested of all their resources before any care is paid for.

That includes any sums of money or articles of property they might wish to leave for their children. As Glenn bluntly explains to the Times, Medicaid “basically want[s] people to destitute themselves and then you take everything else that they have.” In Glenn’s case, as Abelson and Lau report, Medicaid required her to pay rent to use a rental property owned by her mother, and that money was used to pay for her mother’s care, offsetting some of what Medicaid paid out for that care. She was also required to reimburse Medicaid out of the proceeds from the sale of her mother’s home, well after her mother had died.

The most recent attempt to provide more national funding for elder care was through President Joe Bidens Build Back Better legislation, which, as the Times authors note, was “to improve wages and working conditions for paid caregivers.” Ironically however, that provision in the legislation was scuttled partly due to the insistence of two Senate Democrats, including (now former) Democratic Arizona Sen. Kyrsten Sinema and soon-to retire West Virginia Sen. Joe Manchin, that its cost be lowered.

Of course, nearly all Republicans oppose any further funding to care for the elderly. Indiana Sen. Mike BraunҒs position is typical. He says that the solution is simply for Americans to save more money. As the Times article explains:

[L]eading Republicans in Congress say the federal government cannot be expected to step in more than it already does. Americans need to save for when they will inevitably need care, said Senator Mike Braun of Indiana, the ranking Republican on the aging committee.

“So often people just think it’s just going to work out,” he said. “Too many people get to the point where they’re 65 and then say, ‘I dont have that much there.’”

BraunҒs net worth in 2018, according to OPEN SECRETS, was $136 million, which apparently makes him qualified to comment on what “people just think.”

The authors note that the for-profit assisted living industry continues to reap tremendous profits, even as their facilities are, for the most part, ineligible for any federal funding. They note that half of the assisted living facilities in this country cost a minimum of $54,000 per year, with the cost doubling for dementia-afflicted residents of locked “memory care” units. Those facilities cater almost entirely to fairly well-off Americans (and their families) who are fortunate enough to have retained substantial savings even as their physical and mental conditions begin to seriously fail. Likewise, as the authors note, six to seven hours of specialized home care per day can amount to approximately $60,000 per year, all of which must be paid out of pocket. But even that amount of time spent caring for someone with a severe condition can be insufficient. Because people actually tend to get up in the middle of the night, and that’s often when they fall and injure themselves.

For that reason, Medicaid becomes the default option for four out of five Americans whose status (and presumably their financial savings) can be described as “middle class,” according to Abelson and Rau’s report; however, they also note that “Almost half of upper-middle-class couples with lifetime earnings of more than $4.75 million will also end up on Medicaid.”

And as idyllic an idea of letting elderly parents live at their childrens home may be, the reality is the stress of caring for them is extreme, exponentially so if they suffer from advanced dementia. Realistically the vast majority of people are not equipped, either physically or psychologically, to cope with the constellation of medical conditions that can suddenly arise in providing this kind of home care. It necessitates that the caregiver give up most or all of their personal life in the process, and for people still employed or even raising their own children, for example, that is not a tenable situation. The severe stress of such workҗfor relatively low wagesis part of the reason that nursing home staffing is in crisis in the first place, as the Times authors point out. Still, as one personal example cited by the authors notes, placing a loved one in a memory care facility for eight years can cost as much as $1 million, all out of pocket.

If you’ve read this far you may have guessed why this subject interests me personally. It’s because like millions of Americans I am still in the process of living through it. My father passed away fairly recently; after many recent orthopedic injuries it was cancer that ultimately took his life. He knew about his condition, but he told no one, including me or my mother. My mom had to be hospitalized herself after a severe fall almost immediately afterward. She is now in assisted living. Both of them had struggled to stay in their home until the very end, and they wouldn’t hear of leaving for an assisted living facility even as it became evident that neither could carry on independently. It wasn’t just pride and autonomy for them: It was the money, and their hope to leave something to their children.

The multimillionaire Republican senator from Indiana would probably have pointed to my father as an example of someone having “saved enough” through his lifetime to finance my mother’s care, but the reality is that my dad was a rarity, among the last of a fading generation of blue-collar, private sector workers that actually received a pension. And had he not passed away when he did, even the limited resources he had stashed away would not have been sufficient to cover both his and my mother’s care. They would have eventually been reduced to selling off everything they owned to qualify for Medicaid, just like millions of other Americans.

In fact, that reality was quite vividly brought home to me very recently as I disposed of his personal papers. On a scribbled piece of yellow note paper, he’d tallied up all his resources and expected death benefits. In the top right hand corner he’d jotted down notes of a phone conversation hed had with his former employer’s benefits program. Next to their phone number he wrote “SUICIDE NOT A PROBLEM.” That was my dad, ever the practical one. Evidently the benefits administrator answered that specific question to his satisfaction.

Attitudes like Sen. Braun’s and others - that people should just “save more money” to avoid this type of fate - are, of course, clueless and insulting. But they also stem in part from the fact that people in general don’t want to discuss these issues beyond their immediate families. It’s not a pleasant thing to have to admit you had little sense of the likely costs that you would face near the end of your life, and it’s doubly unpleasant when you realize that there is no real recourse other than to rely on your children (again, assuming you have them). So, this problem remains largely invisible, quietly endured by millions until its highlighted for a while in The New York Times or other media. And in fact, the Times article at the outset describes several individuals who are facing personal bankruptcy and devastation to their own futures due to the emotional and financial costs of caring for aged parents or relatives. As the article emphasizes, women tend to bear the brunt of these costs.

In the meantime, due primarily to an intransigent Republican-dominated House of Representatives ideologically averse to doing anything to address this issue, proposed legislation like former New York Democratic Rep. Thomas Suozzi’s WISH ACT, cited by the Times article as one of the few current attempts to provide funding for such long-term care (utilizing a small payroll tax establishing a long-term care trust fund for potential retirees), continue to languish in Congress. Suozzi recently ANNOUNCED he will run to reclaim the seat currently occupied by Republican fraudster George Santos, so if he wins there will be at least one advocate for a concrete (if MODEST) piece of legislation addressing this crisis.

But ultimately the exorbitant costs of obtaining long-term care for the elderly in this country will be an issue thats impossible to ignore. Because as this country ages, millions upon millions of Americans (of all political persuasions) are going to be faced with the same crippling and unexpected financial hardships, all within a few very short years.



Why Long-Term Care Insurance Falls Short for So Many

By Jordan Rau and JoNel Aleccia
KFF Health News
November 22, 2023

For 35 years, Angela Jemmott and her five brothers paid premiums on a long-term care insurance policy for their 91-year-old mother. But the policy does not cover home health aides whose assistance allows her to stay in her Sacramento, California, bungalow, near the friends and neighbors she loves. Her family pays $4,000 a month for that.

“We want her to stay in her house,” Jemmott said. “That’s what’s probably keeping her alive, because she’s in her element, not in a strange place.”

The private insurance market has proved wildly inadequate in providing financial security for most of the millions of older Americans who might need home health aides, assisted living, or other types of assistance with daily living.

For decades, the industry severely underestimated how many policyholders would use their coverage, how long they would live, and how much their care would cost.

And as Jemmott belatedly discovered, the older generation of plans - those from the 1980s - often covered only nursing homes.

Only 3% to 4% of Americans 50 and older pay for a long-term care policy, according to LIMRA, an insurance marketing and research association. That stands in stark contrast to federal estimates that 70% OF PEOPLE 65 AND OLDER will need critical services before they die.

Repeated government efforts to create a functioning market for long-term care insurance - or to provide public alternatives - have never taken hold. Today, most insurers have stopped selling stand-alone long-term care policies: The ones that still exist are too expensive for most people. And they have become less affordable each year, with insurers raising premiums higher and higher. Many policyholders face painful choices to pay more, pare benefits, or drop coverage altogether.

It’s a giant bait-and-switch, said Laura Lunceford, 69, of Sandy, Utah, whose annual premium with her husband leaped to more than $5,700 in 2019 from less than $3,800. Her stomach knots up a couple of months before the next premium is due, as she fears another spike. “They had a business model that just wasn’t sustainable from the get-go,” she said. “Why they didn’t know that is beyond me, but now we’re getting punished for their lack of foresight.”

The glaring gaps in access to coverage persist despite steady increases in overall payouts. Last year, insurers paid more than $13 billion to cover 345,000 long-term care claims, according to INDUSTRY FIGURES. Many policyholders and their relatives reported that their plans helped them avert financial catastrophes when they faced long-term care costs that would have otherwise eviscerated their savings.

But others have been startled to learn that policies they paid into over decades will not fully cover the escalating present-day costs of home health aides, assisted living facilities, or nursing homes. And in other cases, people entitled to benefits confront lengthy response times to coverage requests or outright denials, according to records kept by the NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS, the organization of state regulators.

Jesse Slome, executive director of the AMERICAN ASSOCIATION FOR LONG-TERM CARE INSURANCE, an industry trade group, said long-term care was the most challenging type of insurance to manage. You need multiple crystal balls,Ӕ Slome said. And you have to look 20 years into the future and be right.Ӕ

The Pandemic Paused a Long-Term Decline

The industry’s wobbly finances haven’t steadied despite a brief profitable surge during the coronavirus pandemic. Earnings rose because thousands of people who were drawing benefits, many in nursing homes or assisted living facilities, died from covid-19, and other policyholders died before using their insurance. Others stopped tapping their benefits because they fled facilities and went to live with their families, who provided unpaid care.

Overall, earnings went from $2.3 billion in losses in 2019 to two years of profits totaling $1.1 billion, before receding into the red in 2022 by losing $304 million, according to Fitch Ratings.

Long-Term Residential Care Can Be Hard to Afford

Six in 10 of those who stayed in a long-term care facility or were familiar with a loved ones experience in a facility said it was ғsomewhat difficult or ԓvery difficult to afford the cost.

Half said it was difficult for themselves or a family member to afford paid nurses or aides

Still, none of that was enough to reverse the industry’s long-term decline. Doug Baker, a director in Fitch"s U.S. life insurance group, said long-term care insurance is one of the riskiest in our universe” because of the lingering financial burden from underestimating the number of people who would tap their policies.

More insurers now offer hybrid plans that combine life insurance with long-term care. Those policies are less generous than the ones offered a decade ago - and using the long-term care benefit drains some or all of the money policyholders hoped to leave to their heirs.

“I donӒt think people will offer unlimited again, said Tom McInerney, the chief executive of Genworth Financial, which suspended selling plans through brokers in 2019. “One way or another, taxpayers are going to have to pay more for long-term care needs of the baby boomers.”

Many experts believe it’s untenable to expect that a private insurance market can protect most people from the growing burden of long-term care costs.

“The whole situation is poorly suited to that kind of insurance offering,” said Robert Saldin, a political science professor at the University of Montana who studies the industry.

Falling Profits and Skyrocketing Premiums

Starting in the 1970s, long-term care insurance was touted as a way to keep older people from eroding their retirement savings or resorting to Medicaid, the state-federal program for the poor and disabled. Early plans were limited to nursing home care but later expanded to cover in-home care and assisted living centers. Sales of the policies DOUBLED FROM 1990 to 2002.

As demand grew, however, there were signs the industry had vastly miscalculated the cost of its products. Insurers set early policy prices competitively low, based on actuarial models that turned out to be markedly inaccurate. Forecasters’ estimates of policyholders’ longevity were wrong. U.S. life expectancy increased to nearly 77 years in 2000 from about 68 years in 1950, FEDERAL RECORDS SHOW. And as people lived longer, their need for care increased.

Industry officials also failed to account for the behavior of savvy consumers determined to keep their long-term care coverage. Insurers counted on policy lapse rates - people giving up their policies or defaulting on payments - of about 4% annually. The actual lapse rate was closer to 1%.

As the miscalculations sent profits plummeting, insurers raised premiums or exited the market. By 2020, sales of traditional policies had dropped to 49,000 and the number of carriers offering plans had fallen to fewer than a dozen from more than 100.

Premiums for some consumers doubled in just a year or two. Three class-action lawsuits accused Genworth of failing to disclose to policyholders that it had planned multiyear rate increases, leaving them without information they needed to decide whether to keep their policies. Genworth settled the lawsuits with offers to allow customers to adjust their policies, and in some cases it paid cash damage to those who accepted reduced benefits. The company did not admit wrongdoing.

The increases continue. AM Best, a rating agency, said in a report last November that Genworth “will continue to need annual rate increases for at least several more years to reach economic break-even.”

Prices for new policies have jumped, too. A decade ago, a couple aged 55 could expect to pay about $3,725 A YEAR for a policy that included $162,000 in total benefits and 3% annual inflation protection, according to the American Association for Long-Term Care Insurance. Today, a policy that is virtually the same WOULD COST $5,025, 35% more, even as rising health costs and inflation have eroded the value of the benefits.

And thats only for the people who can qualify. To limit their losses, insurers have narrowed the eligible pool of clients. In 2021, ABOUT 30% of applicants ages 60 to 64 were denied long-term care insurance. For applicants 70 to 74, the rejection rate was 47%. Even among people in their 50s, more than 1 in 5 were turned down. CHRONIC HEALTH CONDITIONS, a history of stroke or diabetes, or psychiatric illness may all be grounds for disqualification.

At the same time, INSURERS BEGAN SCRUTINIZING claims more closely. “They tightened their belts,” said Alan Kassan, a senior partner with the California law firm Kantor & Kantor, which represents clients challenging denials. “Then they tightened their claim administration and started denying claims more and more.”

In 2022, the proportion of traditional long-term care claim denials varied, from 4.5% in Rhode Island to 9.6% in Alaska, according to the NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS.

Despite efforts to limit liability, financial problems forced several high-profile insurance providers to drastically revise policy terms and premiums or go into insolvency, affecting the investments of thousands of clients.

They included Alice Kempski, a retired nurse who, after her husband died, bought a policy from the insurance company PENN TREATY AND AMERICAN NETWORK in 2004 on the advice of a financial adviser, paying premiums of $180 a month for 16 years. By 2017, she was hobbled by osteoporosis and was struggling to manage her multiple medications, according to her daughter, Ann Kempski. She sold the family home in Wilmington, Delaware, in 2017 and, now needing help bathing, moved to an assisted living center there. But when the family tried to file a claim, they discovered that PENN TREATY WAS INSOLVENT and the policy had been taken over by the Pennsylvania state insurance guaranty fund.



Medical Bankruptcy: Still Common Despite the Affordable Care Act

By David U. Himmelstein, MD,corresponding author Robert M. Lawless, JD, Deborah Thorne, PhD, Pamela Foohey, JD, and Steffie Woolhandler, MD, MPH
National Library Of Medicine
March 29, 2019

Myriad anecdotes - of a Nobel laureate who sold his medal to pay medical bills, [1] or the more than 250 000 GoFundMe medical campaigns last year [2] - attest to the financial toll of illness on American families. National surveys confirm that medical bills frequently cause financial hardship, [3] and the US Consumer Financial Protection Bureau reported that they were by far the most common cause of unpaid bills sent to collection agencies in 2014, accounting for more than half of all such debts. [4]

Less evidence is available on the medical causes of bankruptcy, a public and stigmatizing confession of impoverishment. In surveys conducted by researchers with the Consumer Bankruptcy Project in 20015 and 2007, [6] a majority of recently bankrupt debtors implicated medical bills or illness-related work loss as causes of their bankruptcy, findings that President Obama used to argue for passage of the Affordable Care Act (ACA). The ACA both expanded and upgraded health insurance coverage, banning preexisting illness exclusions, imposing a cap on out-of-pocket spending, and mandating coverage for essential benefits. Although these reforms might attenuate the risk of medical bankruptcy, increasing medical costs and stagnant incomes could have the opposite effect.

We sought to assess the incidence of medical bankruptcy in the current era using methods similar to those employed by the Consumer Bankruptcy Project in its 2001 and 2007 surveys. From court records of all US bankruptcy filers from 2013 to 2016, we randomly sampled 200 each quarter, abstracted their court record data, and (with institutional review board approval) mailed them a questionnaire closely modeled on the questionnaires used in those earlier studies. [5,6]

Of the 3200 surveys we mailed, the postal service returned 108 as undeliverable and 910 debtors responded, for a response rate of 29.4%. Court records indicated that nonrespondents financial characteristics mostly resembled those of respondents; their median net worth was similar (Җ$32 947 vs $30 409; P = .17), as were their assets, debts, and ongoing medical expenses (P > .05 for all comparisons), although nonrespondents had slightly higher monthly incomes ($2750 vs $2489; P < .001).

Table 1 displays debtors’ responses regarding the (often multiple) contributors to their bankruptcy. The majority (58.5%) ֓very much or “somewhat” agreed that medical expenses contributed, and 44.3% cited illness-related work loss; 66.5% cited at least one of these two medical contributors - equivalent to about 530 000 medical bankruptcies annually.

The share of debtors reporting a medical contributor before the ACAԒs January 1, 2014 implementation (65.5%) and after implementation (67.5%) was similar (P = .37). Both of these figures are close to the 62.1% estimate from the 2007 survey, and in a difference-in-differences analysis we found no evidence that trends differed between states that did versus did not accept the ACAs Medicaid expansion (P = .76). The responses regarding individual items in the current survey are also similar to those in 2007, when 57.1% of debtors cited medical bills as contributors to their bankruptcy and 40.3% cited income loss due to illness.6

Among those we surveyed from 2013 to 2016, medical debtors were more likely than other respondents to live with a spouse or partner but were similar in age, gender, and likelihood of being uninsured. Medical debtors more frequently self-reported fair or poor health (odds ratio [OR] = 2.88; P < .001), major disability (OR = 2.52; P < .001), foregoing needed medical attention in the two years prior to the bankruptcy filing (OR = 1.77; P < .001), and foregoing needed medications (OR = 2.65; P < .001).

Like all surveys, ours relies on respondentsҒ candor. Moreover, the modest response rate17.1% lower than the response rate in the 2007 studyחmandates cautious interpretation of our current findings. However, the similarities between respondents and nonrespondents is reassuring. Even if the medical bankruptcy rate among nonrespondents were half that of respondents, the overall rate would exceed 40%.

Our findings contrast with those of a recent study analyzing the financial sequelae of hospitalization in California from 2003 to 2007.7 That study found that hospitalization increased medical debts and decreased employment and income, but it suggested that medical bankruptcies were uncommon. However, its econometric approach rests on four assumptions likely to underestimate the medical bankruptcy rate. First, its cohort excluded most persons with frequent hospitalizations, a group at high risk of medical bankruptcy. Second, it assumed that only hospitalized patients can suffer a medical bankruptcy, although patients hospitalized in the course of a year account for only 18.2% of out-of-pocket costs paid by US households (Himmelstein and Woolhandler, unpublished analysis of data from the 2015 Medical Expenditure Panel Survey). Third, it assumed that a childs, elderly parentҒs, or other relatives illness never causes a bankruptcy. Finally, the studyҒs assumption that every bankrupting illness starts at the moment of an initial hospitalization is contradicted by its cohorts upsloping rate of bankruptcy filings in the baseline period prior to hospitalization. Because bankruptcy rates do not rise with age, this suggests that financial distress from illness frequently predated hospitalization. Because the study estimated medical bankruptcies from changes in filing trends before versus after hospitalization, failure to account for the upsloping baseline probably introduced a substantial downward bias.

The California study’s authors argued that survey-based ascertainment of the causes of bankruptcy is unreliable, because debtors cannot know the true cause of their financial predicamentҗjust as heart attack patients cannot know what caused their illness.7 Yet in our (D. U. H. and S. W.) clinical experience, most such patients can accurately identify the smoking, dietary habits, and family history that put them at risk. Moreover, debtors are peculiarly well positioned to identify the contributors to the bankruptcy. As part of their bankruptcy proceedings, all of our respondents had recently prepared detailed documentation of their assets, debts, and current finances, and had sworn to its accuracy.

Medical bankruptcy has garnered public attention because it resonates with the abuse that Americans - including many middle-class Americans - suffer at the hands of our health care finance system. Despite gains in coverage and access to care from the ACA, our findings suggest that it did not change the proportion of bankruptcies with medical causes. Thats not surprising because the chronically poor - the group most affected by the ACA’s coverage expansion - have reduced access to credit, have few assets (such as a home) to protect, and face particular difficulty in securing the legal help needed to navigate formal bankruptcy proceedings.

Moreover, medical costs continue to outpace incomes, 29 million remain uninsured, and many of those with health insurance face unpredictable and unaffordable out-of-pocket costs as copayments and deductibles ratchet up. And few Americans have adequate disability coverage, leaving them vulnerable to illness-related income loss that amplifies the financial distress caused by medical bills.

Rather than acting to make health care more affordable, the current administration seems intent on further hollowing out coverage: encouraging a migration to bare-bones, short-term insurance policies that leave enrollees largely unprotected; allowing states to impose Medicaid work requirements that threaten to swell the ranks of the uninsured; and joining a suit that would end enforcement of the ACA’s preexisting condition coverage mandate.

The results of the midterm electionҗin which health care was the most prominent issue - stand as a rebuke to these retrograde steps. Instead, policymakers should move forward from the ACA and implement programs that guarantee coverage that is not just universal but also comprehensive, as well as sick leave and disability coverage that replaces income during illness.

Although death is inevitable, good public policy can ensure that financial suffering from illness is not.


Posted by Elvis on 11/28/23 •
Section Dying America
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In memory of the layed off workers of AT&T

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All truth passes through three stages. First, it is ridiculed, second it is violently opposed, and third, it is accepted as self-evident. - Arthur Schopenhauer


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