Wednesday, October 15, 2014

American Households are Getting Wrecked by Medical Debt

But don't just take my word for it, here's the "scoop" from Yahoo Finance:
When Deanne Overvold’s husband, Lee, started complaining of back pain late last year, she thought the painkillers his doctor prescribed would be the end of it. Five months later, a round of lab tests would reveal that Lee, 60, wasn’t just suffering from a backache — he was diagnosed with acute myeloid leukemia, a fast-moving bone marrow cancer.

“You never realize the cost of catastrophic illness until you’re in it,” says Deanne, 60. “It’s rather devastating to go from being able to pay the bills to wondering how you’re going to take care of the next month."

In their 30 years of marriage, the Overvolds had each taken on traditional household duties — Lee worked and managed the finances, while she cared for their two sons at home. At the time of his diagnosis, Lee earned $120,000 a year working in sales for an energy company in their hometown, Fontana, Calif. The rigor of his treatment regimen forced him to leave his job on disability, which cut the family’s income by 40%. Very quickly, his hospital bills consumed their emergency savings and the couple began drawing on his retirement benefits much earlier than expected.

“At least five of his cancer specialists weren’t covered by our insurance,” Deanne says. “And one day the hospital would charge $300 for one drug and the next day it would cost $750. It’s like it just keeps coming and you can’t stop it.”

Lee died in August, less than six months after his diagnosis. Deanne was left with more than $100,000 in hospital and physicians’ bills, she estimates -- an amount far too inadequate for her savings to cover. Six years away from reaching full retirement age herself, she’s begun looking for full-time work for the first time in more than two decades. On the recommendation of a friend, she enlisted the help of a financial advisor who specializes in helping widows and widowers.

“We had planned to retire at 67 and we had everything planned out,” Deanne says. “Now, there is no plan.”
Sadly, "there is no plan," describes this country's collective response to this crisis. Despite all of the Obamacare wankery that the idiot Republicans shriek about as if it is the end of the world, the program hasn't even done what President Hopey-Changey promised it would: make health care affordable for all.

As the chart above from the article shows, health care debt is now the number one form of debt collected from Americans, trumping mortgages by an astounding ratio of 38-to-1. For that kind of cash, one would think that Americans would enjoy an immaculate level of medical care rather than be besotted with an Orwellian, broken system that works great for rich people and those lucky enough to have good insurance but is an absolute nightmare for everyone else:
Medical debt triggers more than 60% of bankruptcy filings in the U.S. According to a September Bankrate survey, 44% of consumers making less than $30,000 a year say they have more medical debt than emergency savings.
As I stated in my recent posts about my battle with cancer, I am one of those fortunate enough to have "good" health insurance. And yet, even for me the co-pay I have to make for every office visit or procedure has increased in the past decade from $10 to $30 dollars, which is just a TAD higher than the rate of inflation. Still not that big a deal for me, but for someone making less than $30,000 a year per the above citation, that's not an insubstantial amount of cash, especially if they have a chronic illness that requires frequent attention.

During my cancer battle, I have hit the so-called catastrophic limit of $5,000 for each of the past two years, meaning that only about $10,000 of the roughly $500,000 my care has cost to date has been out of pocket. Sounds good, right? But even if that person making less than $30,000 a year was fortunate enough to have the same level of coverage I do (unlikely), that still represents more than 16.7% of their yearly GROSS income. To make matters worse, according to the article the amount of out of pocket expenses patients will have to pay are expected to increase by about THREE TIMES the rate of inflation over the next ten years.

So why is this problem just continuing to get worse? I've written here before about the staggering pay received by health care CEOs, but what it really boils down to is that health care has been turned into a commodity in this country. But it's a commodity in which the "consumer" has no real choice when they need to purchase it. It's either buy the hideously overpriced product, or live with the pain and discomfort of their illness if not die from it.

To make matters worse, there is ZERO chance our hideously broken political system will address the issue. Republicans and Democrats will continue to scream back and forth about the non-solution of Obamacare, the debate over which will serve its purpose of being a gigantic distraction for the masses as the those who rake in the obscene profits off of their fellow citizens' sickness and misery laugh all the way to bank.

Bonus: "You cannot run...and you cannot hide...from the wreck we've made of our house...from the mess inside"


  1. Yep, it is a mess. Do you ever wonder why we are the only industrialized nation without a National Health System? It is from our Puritanical foundations and the idea that God will take care of those deserving and those who are sick somehow deserve their fate. Tough hurdle to climb. It won't get better without a single payer system.

  2. Each slice on the debt pie chart represents a source of interest and fee income to the financial institutions, directly, and the rentier class through them. Given that it would require them to surrender two of their biggest sources of wealth (and power), do you really think you'll ever see a national healthcare system or free higher education in this country?

    1. No, that boat sailed a LONG time ago. America could have had a national healthcare system under NIXON, but none other than Teddy Kennedy sabotaged it because he wanted it to be the central plank of his 1976 presidential campaign platform. After 1980, any chance that government programs would do anything but ultimately benefit the wealthy went right out the window.

      Plus, by ringing up $18 trillion in debt by trying to police the planet (again for the business interests of the wealthy) we've pretty much ensured that we could never afford it anyway.

  3. Equally morbid is that student debt is a hefty number two as the snakes suck the health and intellectual future away.
    I would like to hear Paul Krug respond to your post as he wrote what amounts to a paean to Prezbo with health care as the central pillar.
    And I would like to see you take apart his argument in that long and carefully balanced piece that addressed other Obama tallking points.
    My wife has a friend who remains a fan and after reading the Krug piece I said I would blow a kiss Obama's way. I didn't say which cheeks it would emanate from.

    1. If Krugman were ever nervous enough respond to likes of me, you'd know collapse was right around the corner. :)

  4. @Jerry Carlin. I was once in a men's group that took a turn for the woo-woo and when they started asking me how I thought I 'brought on' my bladder cancer I left, but only after asking how they explained leukemia in the very young. I didn't wait for their answer.

  5. @Anonymous. Ruefully correct. Notice mortgage is only one percent. Not all that probitable to have taken over the housing industry and turned homeowners paying mortages into renters. Not to be confused with rentiers.l
    May be good in that unrented houses don't use energy.