Four Times More Likely to File for Bankruptcy after Cancer Diagnosis

Four Times More Likely to File for Bankruptcy after Cancer Diagnosis

Medical bills have long been considered a leading cause of bankrupt case filings.  Elizabeth Warren and her co-authors found medical bills accounted for 65% of bankruptcies in 2007.

Now, a new study shows how devastating medical bills involving cancer treatment can be.  The Fred Hutchinson Cancer Research Center, along with researchers at the University of Washington, conducted an analysis linking federal bankruptcy court records to cancer registry data from nearly 232,000 adult cancer cases in western Washington during a 14-year period.  The study found a dramatic financial cost to survival: bankruptcy rates increase along with the length of survival.

The study found that compared to the general population, bankruptcy rates were nearly twice as high among cancer patients one year after diagnosis, and FOUR TIMES as high within five years after diagnosis.  The median time to bankruptcy was two and a half years after diagnosis.  "Patients diagnosed with cancer may face significant financial stress due to income loss and out-of-pocket costs associated with their treatment," said Scott Ramsey, MD. Ph.D., who led the study.

This study, unlike most done in the past, linked two sets of  irrefutable government records of cancer and bankruptcy and determined the risks of financial problems  by cancer type, treatment and other factors.  The study linked Washington state cancer registry data with federal bankruptcy court records in 13 western Washington counties. They measured the rate of bankruptcy after a first cancer diagnosis and identified factors that increased bankruptcy risk among people with common cancers.

The highest risk for financial problems is for lung, thyroid and leukemia/lymphoma cancer patients.   In contrast, patients over 65, who are typically on Medicare, have a much lower risk of bankruptcy than younger patients. The researchers also found that bankruptcy rates among cancer patients have increased significantly since the U.S. financial crisis.

What Can We Learn from This Study? 

A cancer diagnosis is devastating, no matter what the potential financial impact.  Having money problems after the diagnosis could almost be crippling.  The fact that bankruptcy filings are 4 times more likely for cancer patients demonstrates the huge financial burden on them as well as on countless others who do not actually file for bankruptcy.   Remember this when a family member or friend learns about a diagnosis. Your friends and family members may not ask for help, but you can be sure that they will need some.  Support them emotionally and financially as best you can.   If you sense their bills are overwhelming them, support them and advise them on their options to deal with the financial pinch, including government programs.  And don't forget that bankruptcy can provide some solid relief on medical bills.

Read more articles about consumer debt by Ted Connolly, co-author of The Road Out of Debt

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