Health care costs and bankruptcy

Many Americans believe that the high costs of health care are bringing about more instances of bankruptcy across the country, especially as the number of uninsured Americans rises in the recession.

According to Brett Skinner of the Fraser Institute, however, there is no evidence that this is the case — or at least, there is no evidence that reducing the number of uninsured Americans and further socializing the health care system would limit bankruptcies.

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“If socialized medicine played a role in reducing personal bankruptcies, we would expect to see a lower rate of personal bankruptcy in Canada compared to the United States. Yet the reverse is true. The personal bankruptcy rate is actually higher in Canada than it is in the U.S.,” he said.

“There is no evidence to support the idea that a government-run health care system in the U.S. will reduce personal bankruptcies,” Skinner said.

“Bankruptcy and lack of health insurance coverage are both caused by the same thing: insufficient income, which is most often the result of unemployment. The majority of debt among bankrupt consumers in both America and Canada is composed of non-medical expenditures and therefore, has little to do with health insurance coverage.”

Skinner is an author of a report on the subject, "Health Insurance and Bankruptcy Rates in Canada and the United States."