Drained By Medical Bills

More people are filing for bankruptcy over the high cost of being ill

By Deb Gruver of The Wichita Eagle

Dan Delaney thinks every day about the doctors who cared for him when cancer tried to kill him last year. He feels he owes his life to those doctors. He also owes them--and the places where they tended him -- about $350,000, a debt he can't repay.

Delaney, a 35-year-old electrician, is one of a growing number of Americans filing bankruptcy because of medical bills.

On March 7, he and his wife, Crista, signed a 44-page petition for Chapter 7 bankruptcy, something they never thought they would have to do as a couple.

Wichita bankruptcy lawyers say they are seeing more clients such as the Delaneys, people with good jobs and reasonable debt -- and, in many cases, insurance -- who simply can't afford the cost of being sick.

A Harvard Medical School study last year found that half of bankruptcies are due in part to medical bills. And the number increased 23-fold from 1981 to 2001.

"The worst time for people to have financial stress is exactly when it comes," said David Himmelstein, an author of the study.

The Delaneys say that filing bankruptcy was embarrassing, no doubt.

Crista is an agent at Prudential Dinning-Beard Realtors. Image is important in her business. She's shown million-dollar houses and her current listings include a house that costs more than her husband's cancer bills.

But when she thought her husband was going to die, money was the last thing on her mind--at least at the beginning.

Started with a cough

For months, Dan thought it was bronchitis sucking 30 pounds from his small frame and making him so weak that taking out the trash felt like running a marathon.

He suffered night sweats and coughed all the time. He slept sitting up because lying down hurt so much.

When he discovered his illness was far more serious -- he saw Crista's doctor on a Wednesday and found out two days later that he had stage-three non-Hodgkin's lymphoma -- he and Crista believed not only that he would survive but that their insurance would cover the cost of keeping him alive.

Earlier in the year, Dan had changed jobs and lost his insurance. After a long waiting period, Crista was able to put him on a policy that covered her and her son, she said. The company collected premiums for six months, the couple said.

Dan went through chemotherapy, dialysis and other treatment before his insurance company determined he had a pre-existing condition that would not be covered, the couple said.

The Delaneys filed a complaint with the Kansas Insurance Department but didn't get anywhere with it, they said.

Crista already was working extra to make up for her husband's income while he was sick. They always had been a two-income family.

"She took care of the money, and I tried to heal," Dan said at their home outside Valley Center. "I wasn't good for anything. I made myself sick trying."

While he was in the hospital for weeks, Crista slept on the floor of their living room. If he couldn't be comfortable, she thought, neither would she.

Dan went back to work at the beginning of this year.

Ha Ta is one of Dan's doctors and said she doesn't think about the money when she cares for patients.

"I can't think of it," she said. "If that's what drives me, I shouldn't be in practice."

When patients in her practice with physician Donna Sweet can't pay, Ta tries to put them in touch with groups such as Project Access, a nonprofit organization that helps patients who cannot afford to pay.

No other choice

The list of creditors holding unsecured claims against the Delaneys outlines the cost of having cancer, line by line.

A sampling:

• Cancer Center of Kansas, $84,316
• Northeast Wichita Dialysis Center, $66,330.35
• South Central Path Lab, $17,519
• Via Christi Regional Medical Center, $142,923.19

In all, two dozen creditors are marked as medical on their filing.

Last year, Harvard researchers conducted what is considered the first extensive study on the medical causes of bankruptcy.

They surveyed 1,771 filers from 2001 in five federal courts and completed personal interviews with 931. About half cited medical bills as a cause for their bankruptcy.

Most filers' medical bills were relatively modest.

"What was going on for a lot of people was that they got sick and they couldn't work and were losing income from their job at the same time medical bills were coming in," said Himmelstein, an associate professor of medicine at Harvard Medical School and a primary care physician at Cambridge Hospital.

The majority -- 75 percent -- of filers surveyed had insurance at the onset of illness. The study found that medical filers were 42 percent more likely than other filers to experience lapses in health insurance coverage. Such a lapse is a strong predictor of a medical bankruptcy, the study found.

For most people the researchers interviewed, the idea "that an illness would drive them into bankruptcy was not on their radar screen," Himmelstein said.

That was certainly true for the Delaneys.

"Here I am, a top real estate agent at the company, and I had to file bankruptcy because my husband had cancer. He came this close to dying," Crista said, her thumb and forefinger spread about an inch apart.

Credit counseling now is required of anyone considering bankruptcy. The Delaneys went to the classes even though they weren't strapped by credit-card debt and felt they had done a good job of living within their means.

To pay off the medical bills, they would have had to have brought in an extra $10,000 a month.

That wasn't realistic.

Some of their medical creditors offered to reduce their bills when insurance wouldn't pay -- Via Christi offered a 60 percent discount, for example -- but the overall debt still was not within their means.

"About the only thing we could do was file," Crista said. "We have a mortgage and a 10-year-old. Even if we sold the house and everything we had, we still would not be able to pay" the bills.

Turning things around

Himmelstein says two things must happen to turn around the trend.

"First we need universal, high-quality health insurance, national health insurance that is disconnected from your job," he said. "You need to have it whether you can pay for it or not. Health insurance can go away if you're sick and out of work. We need a seamless health insurance system, which I think is known as national health insurance."

Second, Americans need better disability coverage, he said.

"Most other countries or many other countries have far better public disability coverage than we have," he said.

He thinks both issues will be in the forefront politically in the next few years.

"I think we're going to be having a major debate in the next five years because things are falling apart so fast," he said.

Increased consumer demand is a big reason why health care costs are rising, said Larrie Ann Lower, a lobbyist and executive director of the Kansas Association of Health Plans, a not-for-profit group made up of health insurance companies that serve the state.

"We want the best, and we want it now," she said.

But at the same time, people smoke and overeat, she said.

"Personal responsibility is a big part of health care costs," she said.

Doctors also practice defensive medicine, she said, ordering tests that may be unnecessary because they are afraid of being sued.

All of those factors are driving up health care costs, which leads to medical bankruptcy, she said.

Lower said the health insurance industry hopes that health savings accounts will help Americans better prepare for the cost of health care.

A health savings account lets consumers set aside pre-tax dollars for future medical, retirement or long-term care expenses.

Considering options

A Vietnam veteran who worked at Boeing for 24 years met recently with Wichita bankruptcy lawyer Bill Zimmerman to consider his options.

He lost his insurance when he was laid off from Boeing three years ago as a tool and die maker.

He suffers from back problems and had his first surgery in June 2005 to repair a shattered disc with a titanium plate and steel post. He later developed a staph infection and had another surgery in mid-June. He was in the hospital for four months.

The 60-year-old man, who did not want to be named because he has not yet decided whether to file bankruptcy, said he didn't worry about getting other insurance when he was laid off because he thought his military service would cover all expenses.

He now faces about $115,000 in medical bills.

He is paying the U.S. Veterans Administration hospital $50 a month.

"I'm trying to do the right thing by them," he said.

He said he doesn't have credit-card debt as a longtime believer in the motto, "If I can't pay cash for it, unless it's a car or house, I don't buy it."

He doesn't have a cell phone or other perks, he said.

He misses hunting, boating and fishing and, especially, his job. His voice cracks when he talks about his trade of 30 years.

"If I could go back to work tomorrow, I would," he said.

Zimmerman says this potential client is not his only one struggling with medical bills.

On Wednesday, he met with a high-income family. The husband had been laid off and later replaced his job but had health problems. A child in the family also had medical issues. The family was able to pay their medical bills but got behind on their credit cards in the meantime.

"I would say medical bills are a factor directly or indirectly in probably 50 percent of the cases," Zimmerman said. "It's not 80 percent, and it's not 20 percent."

Sometimes it's difficult to know if medical bills are the cause, Zimmerman said, because "we don't know what credit card use is for."

Most of his clients who are in trouble for medical bills have health-related debts between $5,000 and $20,000, he said.

"The Delaneys are a good example of how bad it can be," he said.

Making it through

Dan Delaney now pays $525 a month for insurance coverage in a state program for people who can't get insurance elsewhere.

The Delaneys believe their credit score probably still is higher than average.

"That was the only thing that probably saved us--that we had good credit to start with," Crista said.

Their bankruptcy has not yet been discharged. Bills continue to come in. Crista recently turned over a new $9,000 medical bill for Zimmerman to add to their filing.

She said Dan's cancer changed the way they deal with life. They no longer sweat the small things.

A year ago at this time, Dan was bald and could barely walk. Crista had to help carry him upstairs to bed.

Now he's working again.

"It's a miracle I'm here," Dan says.