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(NaturalNews) Unemployment is high and retirement accounts have virtually disappeared for many folks in the wake of the current recession. Housing prices have plummeted, too. So it comes as no surprise that data just released by the Administrative Office of the U.S. Courts shows the total number of U.S. bankruptcies filed during the first three months of 2009 increased 34.5 percent over the same period in 2008. But what is surprising is a new Harvard study published in the August 2009 issue of The American Journal of Medicine which reveals financial woes starting hitting Americans even before the officially recognized economic downturn -- and the main culprit was illness and medical bills.

The results of the first-ever national random-sample survey of bankruptcy filers, conducted by researchers at Cambridge Hospital and Harvard Medical School, Harvard Law School and Ohio University, show that in 2007, 60% of all bankruptcies in the United States were driven by sickness and related medical bills. Moreover, the share of bankruptcies attributable to medical woes over the past few years has been on the upswing.

The investigators surveyed a random national sample of 2,314 bankruptcy filers in 2007, studied their court records and then interviewed 1,032 of these financially strapped people. Bankruptcies were designated as "medical" based on the stated reasons a person had for filing, income loss due to sickness and the amount of their medical bills they owed. By relying on identical definitions in both 2001 and 2007, the researchers concluded that the share of bankruptcies caused by medical problems had soared by almost 50 percent during those years. In fact, the chances a bankruptcy had a medical cause were 2.38 fold higher in 2007 than in 2001.

The results of the research revealed that a variety of circumstances pushed many middle-class Americans over the edge into bankruptcy, even when they had health insurance. For example, 92 percent of the medically bankrupt ended up in that financial state due to high medical bills. And countless families who had health insurance were under-insured, leaving them responsible for thousands of dollars in medical bills they couldn't pay. In fact, out-of-pocket medical charges averaged just under $18,000 for those who had private insurance and yet went bankrupt due to medical expenses. Uninsured patients were faced with $26,971 in out-of-pocket expenses.

The study's authors point out that almost all insurance is linked to employment, so a medical illness can trigger both loss of a job and loss of health insurance coverage. Nationally, about a fourth of all companies cancel insurance coverage immediately when an employee suffers a disabling illness, and another 25 percent cancel insurance within a year. Of course, losing a job due to the recession also usually means losing health insurance coverage.

"The US health care financing system is broken, and not only for the poor and uninsured. Middle class families frequently collapse under the strain of a health care system that treats physical wounds, but often inflicts fiscal ones," researcher David U.Himmelstein, M.D., wrote in The American Journal of Medicine article.

The solution is found in your own choices, not some government program

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