Bankruptcy rate has doubled since 1990
Personal bankruptcies in Washington and Idaho more than doubled since 1990. A report released Thursday suggests the increase is largely due to medical debt.
In Washington, personal bankruptcies grew from 14,448 filed in 1990 to 39,818 in 2003. During the same period in Idaho, personal bankruptcies grew from 3,735 to 9,435.
Other national studies have shown that medical debt accounts for a growing percentage of personal bankruptcies and now may play a role in nearly half.
Thursday’s report, titled “Risky Business: Working People Losing Health Coverage,” was released by the Working for Health Coalition, a Washington group promoting greater access to health care.
Each month, Spokane’s Rockwood Clinic billing office receives court notices for about 100 personal bankruptcies, said Dr. Glen Stream, a Rockwood doctor and a member of the coalition releasing the report. It’s not only a personal crisis for the people involved, but a hardship on the clinic and other creditors.
“We need to turn up the heat,” Stream said. “We as a society need to dialogue about this problem.”
The report recommends expanding access to state health insurance programs such as Medicaid and the Basic Health Plan.
In Idaho, the Dirne Community Health Clinic offers care on a sliding fee scale to about 600 people a month and hopes to double its clients soon.
“Our families are at risk financially. If there is some type of catastrophic health event, they could be in jeopardy of bankruptcy,” said clinic executive director Jim Owens. Some doctors in Spokane and Coeur d’Alene donate their services to limited numbers of patients. That helps. But the safety net is straining to keep up, the coalition’s report states.
Skeptics say that uninsured people make poor choices and freeload off the system, said Dr. Bob Crittenden, chief of family medicine at Seattle’s Harborview Medical Center and a coalition member. But health insurance has grown so costly that some working families can’t afford it without giving up basics, Crittenden said.
In Spokane County, a family of four needs $31,000 a year to cover basic expenses, not including health insurance. If the same family purchases employer-sponsored health insurance, its basic expenses rise to $35,000. If the employer doesn’t provide insurance and the family has to buy it from the individual market, expenses jump to $40,000 a year. The numbers come from a 2002 study by the Washington state Office of Financial Management.
“You could live in a shelter. You could give up food, but you’d be thrown in jail if you can’t feed your kids. You could not have a car, but then you can’t get to work,” Crittenden said. “Legally and morally, the best choice for them is to take a chance without insurance.”
People without insurance are often self-employed or work for small employers that don’t offer insurance.
One patient Crittenden met recently decided he couldn’t afford health insurance as he started up his independent consulting company. The man recently found out he has cancer. To pay for his treatment, the man first will spend money he’s saved for retirement. Then he’ll consider bankruptcy, Crittenden said.