The Wonk Room

Health Care & The Financial Crisis: ‘Medical Crises Contribute To Half Of All Home Foreclosure Filings’

Some health care analysts have argued that the current financial crisis undermines the possibility of major health care reform. Indeed, since the crisis erupted, policy makers, save Sarah Palin, have largely divorced the health care crisis from the economic crisis and ignored the contribution of rising health care costs to the growing number of home foreclosures.

In truth, while “lax lending standards, rising interest rates, and irresponsible borrowers” helped cause the current downturn, rising medical costs and loss of work due to injury or illness led to many foreclosures.

According to one recent study, “medical crises contribute to half of all home foreclosure filings.” “If these patterns hold nationwide, medical causes may put as many as 1.5 million Americans in jeopardy of losing their homes each year,” the study concluded:

As middle class incomes remain stagnant, health care costs continue to increase. The employee contribution to health care insurance has more than doubled since 1999 and the total cost for family coverage now averages $12,680 a year, up 5 percent from 2007. “Annual deductibles — the amount employees pay out of their own pockets for medical care before their insurance coverage starts — jumped an average of 29%, to $1,344, for those with family coverage,” a recent Kaiser survey found.

Unless the system is reformed, growing costs will continue to swallow paychecks. As Ezekiel Emanuel observes, “economic, tax and health care policy are inextricably linked“:

Health care may no longer be the acute pain at the forefront of the public’s attention — hence the short shrift so far. But it is a severe disease that will have to be cured to get the economy really going and to ensure we have money for all the other things we need to invest in, like education, alternative energy, infrastructure, defense, national parks and the rest. Let’s hope policy makers can rise above the immediate political agenda to solve the long-term problems.

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