Medical Bankruptcies Are Falling

Robert Book / July 24, 2009

Recent media reports tout a forthcoming study in the American Journal of Medicine claiming that medical bills are responsible for 60% of U.S. personal bankruptcies. Putting aside the overly-generous criteria for counting a bankruptcy as “medical,” the figures reported in the study actually show that even by their criteria, medical bankruptcy is actually dropping. As Megan McArdle points out, the report’s figures indicate that the number of medical bankruptcies dropped from almost 671,000 in 2001, to only 502,000 in 2007. That’s a drop of over 25% in six years.

Why, then, to the authors claim that medical bankruptcy is a growing problem? Well, instead of reporting that the number of medical bankruptcies fell, they instead say the bankruptcies they count as “medical” are now a larger percentage of all bankruptcies. But the number of (more…)