April 2005: Health and bankruptcy

April 1, 2005

Rose Shaffer worked for nearly 30 years as a nurse in various hospitals in Chicago, where she was covered by health insurance. Then she took a job as director of nursing with a home care agency. Seven months into her new job, she suffered a heart attack and was rushed to a suburban hospital, where she was successfully treated and discharged three days later.

She assumed she was automatically insured, as she had been in her previous nursing jobs, but she wasn’t, and so a week later she received a bill from the hospital for $18,000. She thought the billing was a mistake and ignored it. Then the hospital sent her letters demanding payment, and finally a summons to appear in court. Unable to pay such an exorbitant amount, she was forced to file for bankruptcy, which meant the hospital and other debtors would garner a reduced portion of the money she owed.

That was three years ago, and Rose still hasn’t recovered from the aftershocks. Well into her 60s, she works two nursing jobs, seven days a week, so she can make the monthly repayments of $2,088 she still owes under the bankruptcy regime. Her credit is shot and will be for the next decade. She was hoping last fall that her 11-year-old car would make it through another Chicago winter.

“The hospital saved my life,” she says bitterly, “and then they tried to kill me.”

Rose Shaffer’s experience with the U.S. health care system is far from uncommon. It’s all too typical among the 45 million Americans who either have no health insurance or have such minimal coverage that they might as well have none. If they are unemployed or working for low wages and have the misfortune of becoming seriously ill or involved in a bad accident, the odds are they will soon be numbered among the more than 700,000 American households forced every year by exorbitant medical bills to file for bankruptcy.

A recent study published in the U.S. journal Health Affairs found that, between 1981 and 2001, medical-related bankruptcies increased by a colossal 2,200%. And the victims are by no means confined to the poor. The study revealed that it’s the middle class in the U.S. that accounts for about 90% of all medical-caused bankruptcies.

“These are educated Americans with decent jobs, homes and families,” said one of the study’s authors, Prof. Elizabeth Warren of Harvard. “But one serious illness, and they end up in complete financial collapse, wiped out by medical bills.”

We Canadians are fortunate not to be exposed to this risk of financial disaster when we get sick or break a limb. We rightly treasure our public health care system. But are we doing all we can to prevent it from slowly deteriorating into a counterpart of the barbaric American approach to medicine?

Make no mistake: Many in our political, business, academic and media élites want to convert Canadian Medicare into a facsimile of the largely privatized U.S. system. They know they can’t do that openly or quickly, so they are proceeding in small, incremental steps—approving another private clinic or MRI office, delisting another drug or test, laying off some nurses, closing some hospital beds, offering faster treatment if you can afford to pay for it.

This is a slippery slope. At its bottom, where we’ll eventually find ourselves if we keep letting the privatizers keep chipping away at Medicare, is the same threat of bankruptcy that has devastated so many Americans and which hangs over millions of them like the sword of Damocles. Even those Americans who can escape that fate by paying for private health insurance are averaging nearly $6,000 a year in medical expenditures, which for over 14 million of them exceeds a quarter of their earnings.

As citizens and voters, we have to do a better job of stopping the slow sabotage of Medicare by its enemies in government, business, academe and the media. If we fail, many of us will share the tragic fate of Rose Shaffer and the millions of other Americans bankrupted by medical costs.