Do Medical Bills from Cancer Increase the Risk of Filing Bankruptcy?

A recent article by the New York Times reviewed a study of whether medical bills for cancer patients cause more bankruptcies. The researchers found that “cancer patients were twice as likely to file for bankruptcy as people without cancer.” The study was conducted at the Fred Hutchinson Cancer Research Center in Seattle.
The effort determined based on “court records and information from the regional cancer registry” that younger people with cancer experienced the highest bankruptcy rates. In a comparison of all cancer patients versus people without cancer, the cancer patients were 2.65 times more likely to go bankrupt than people without cancer. In addition, there was a significant discrepancy between younger cancer patients and older cancer patients (sixty-five or older). The younger patients had 2-5 times higher bankruptcy rates than the older cancer patients. The study authors believe this discrepancy is due to Medicare and Social Security as a possible mitigating factor that is decreasing the risk for the older group.
Perhaps not surprisingly, nearly 60% of debtors report medical debt at the time of filing for bankruptcy, with medical bills being one of the major causes of people filing for bankruptcy. The report noted that “the financial burden of cancer can be substantial for patients and their families” with as much as “$1.3 billion of the $20.1 billion spent on cancer care” coming directly from the patients. The financial burden worsens if the patient is unable to work during treatment. Research suggests that from 40% to 85% percent of cancer patients stop working during initial treatment.
The fact remains that medical debt is a leading cause of bankruptcies, but whether or not the specific medical condition can be associated with filing for bankruptcy is still being researched. According to ThinkProgress’s evaluation of this study, “Americans who have access to health insurance aren’t necessarily safe from bankruptcy, since high cost of treating cancer can still put an untenable strain their finances.” A majority of people who file for bankruptcy due to medical debt have some type of health insurance. The insurance just does not cover all of the costs of care.
People facing high health care costs should consult with their doctors, hospitals, pharmacists, and community resources about lowering medical bills. For the truly needy, many doctors and hospitals will substantially reduce a medical bill, accept affordable monthly payments, or both. Many drug companies offer expensive medications at a substantial discount for those who could not otherwise afford them.
If medical bills become overwhelming, though, bankruptcy is one way that often works to discharge the debts. Bankruptcy stops bill collectors from trying to collect medical debts. And, medical bills can be included in the bankruptcy discharge so that the patient will never have to pay them.
One precaution though. While hospitals generally have to provide emergency care, they do not have to agree to provide non-emergency care. Doctors, too, do not have to continue to provide medical services. So, if you leave a doctor unpaid, you may expect the doctor to refuse to provide you future medical services after a bankruptcy. For that reason, some bankruptcy debtors work out payment arrangements with their essential doctors and continue to pay them even after the bankruptcy case is filed. Potential bankruptcy filers considering these issues should consult with a qualified bankruptcy attorney.
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