A Harvard led-study released today linked high medical costs to about two-thirds of those filing for bankruptcy. (Read the full study here)
MPR's Lorna Benson reports that this is a roughly 50 percent increase the past few years in the number of bankruptcy filers who said medical costs contributed to their plight.
But if the numbers donâ€™t convince you how medical costs can cripple your finances, listen to Tom Cole.
Cole, of Hopkins, a former Green Beret was diagnosed with lung cancer in 2004. He had no health insurance due to a divorce - it was his wife who had the job with benefits. He estimated paying more than $40,000 in out-of-pocket costs for treatment. The medical bills devoured his retirement and personal savings.
That put him right on the edge financially. "It was a snowball effect," said Cole, a source in MPR's Public Insight Network. It became hard to work as a personal care assistant. He still carried a mortgage. He desperately didn't want to lose his St. Louis Park house. He took odd jobs. He took in boarders - including two convicted sex offenders who had served their time.
"I had a heart for these guys," said Cole, who described them as low-level offenders. "And I could get a little something out of the deal to keep in the house." This side of Cole's tale was conveyed to our Public Insight Network two years ago and was featured on the national program - The Story.
But by 2007, it wasn't working. So he filed for bankruptcy protection.
"None of this would have happened if it weren't for the medical stuff," Cole said. The study found, as Benson put it, that most people bankrupted by illness were middle class. Many of them still had insurance. Cole falls into the subset of folks without an insurance plan.
Cole said it wasn't just the medical costs that became a problem. As his physical condition made it harder to work, he used credit cards to pay some other bills. Soon it became harder to pay them off. Cole said once one credit card company requested a much larger payback, others followed suit.
By late 2008, he lost a long time client for his personal care services and, because of his weakened state and his age (near 60), he wasn't being placed with a new client. He found himself without his main source of income. He tried to refinance his home. The bank said no, which didn't surprise him given the economic meltdown and his poor financial prospects.
Cole quickly recites the date he decided to give up on the house and go into foreclosure - February 17, 2009. Cole still makes some money taking in unwanted dogs from shelters who will give him a payment for the care. He's doing that from an apartment.
And Cole has applied for public assistance, a circumstance he tried hard to avoid.
"You got to look beyond your pride at some point," he said.
Minnesota Public Radio News has long looked at the after-effects of bankruptcy. If you have a story to share, please to do so, and help our understanding of this issue as it hits on the ground level.