The map above shows the share of bankruptcies in each country that can be traced back to either direct medical costs and/or the costs related to lost income from health related problems.
Here’s more about the sources of the stats for each country:
- United States: 66.5%
- Canada: 19%
- United Kingdom: 8.2%
- Australia: 7.25%
- France: 0%
United States
The data for the US comes an Medical Bankruptcy: Still Common Despite the Affordable Care Act, it reports on a survey of Debtors Citing Specific Contributors to Their Bankruptcy: United States, 2013–2016.
It found the folloiwng:
| Reasons Cited as Contributors to Bankruptcy | (A) Very Much Agree, % | (B) Somewhat Agree, % | (A)+(B) Very Much or Somewhat Agree, % |
|---|---|---|---|
| Medical expenses | 37.0 | 21.5 | 58.5 |
| Medical problems causing work loss | 27.9 | 16.5 | 44.3 |
| Either of above | 44.2 | 22.3 | 66.5 |
Moreover:
The share of debtors reporting a medical contributor before the ACA’s January 1, 2014 implementation (65.5%) and after implementation (67.5%) was similar (P = .37). Both of these figures are close to the 62.1% estimate from the 2007 survey, and in a difference-in-differences analysis we found no evidence that trends differed between states that did versus did not accept the ACA’s Medicaid expansion (P = .76). The responses regarding individual items in the current survey are also similar to those in 2007, when 57.1% of debtors cited medical bills as contributors to their bankruptcy and 40.3% cited income loss due to illness.
Canada
The data for Canada comes from an article titled: What Are The Causes of Bankruptcy in Canada? It found the following:
Despite universal health care in Canada, people are filing bankruptcy for medical reasons; 19% of our clients cited illness, injury and health-related problems as a cause of their financial difficulties.
…
For some, financial trouble starts with time off work recovering from their health problems. During their convalescence, they may use credit to survive and pay their day-to-day bills. Once they return to work, they are left with more debt than they can handle. Others may not be able to return to full-time work and find that their disability income is not sufficient to pay their debts as they come due.
United Kingdom
The data for the UK comes a report from the former Insolvency Service, which cites Illness/accident as a cause for 8.2% of the UK’s bankruptcies in 2004. Unfortunately, I wasn’t able to find any more up-to-date info.
The National Center outlines how this can happen in the UK:
The idea that single-payer systems don’t have medical bankruptcies is based on the fact that health care is “free” at the point of service in such systems. After all, if people don’t have to pay for health care (at least not directly), how could they have a bankruptcy due to medical bills?
For starters, medical bills are not the only way a medical bankruptcy can occur. For example, if you have an illness that requires a major operation in Britain, you are likely to end up on a long waiting list. And if the illness renders you unable to work, then the longer you are on the waiting list the more your finances will be strained.
Australia
The data for Australia comes from 2016/17 stats from the Australian Government, which claimed that 1,830 of the 25,225 personal insolvencies were caused by ill health, which works out to 7.25%.
Again since Australia has universal healthcare like Canada and the UK, medical related bankruptcies the result of loss of income around an illness/waiting for care than from the cost of the care itself like in the United States.
France
Data for France comes from Medical Bankruptcies Statistics from Balancing Everything, they state that:
An article by Stanford Medicine compares the US medical bankruptcy statistics with those of France. Their research highlights that in 2007, 62% of all US insolvencies resulted from medical costs. By contrast, in France, there were no medical-related bankruptcies in 2008. The main reason is the single-payer system that ensures everyone gets free healthcare. Stanford Medicine, however, highlights that taxation in France is much heavier than in the USA.
Struggling With Medical Bills
The LA times, also has some interesting stats around people struggling to pay medical bills in general. Here are the main stats from the article:
| Country | % Facing Catastrophic Healthcare Spending | Deaths from Treatable Conditions (per 100,000) | Waited ≥4 Months for Non-Emergency Surgery (% of patients) | Per-Capita Health Spending (2018, US$) |
|---|---|---|---|---|
| United States | 7.4% | 112 | 4% | $10,586 |
| Australia | 3.2% | 62 | 8% | $5,005 |
| Japan | 2.6% | N/A | N/A | $4,766 |
| Germany | 2.4% | 83 | 0% | $5,986 |
| France | 1.9% | 61 | 2% | $4,965 |
| United Kingdom | 1.4% | 85 | 12% | $4,070 |
| Netherlands | 1.1% | 72 | 4% | $5,288 |
| Canada | Not Stated | 78 | 18% | $4,974 |
This means 5x more Americans have issues with catastrophic health spending than the British. Despite the fact the UK spends less than half the amount per capita on health spending compared to the US. The main downside is that waiting times in the UK are far longer than the US.
Why does the US have so many more medical related bankruptcies?
Here are some key points comparing the situation in the US to other countries:
- High Out‐of‐Pocket Costs in the US:
In the United States, many people face high deductibles, co-pays, and uncovered services. Research (such as the often-cited study by Himmelstein and colleagues) has suggested that a significant percentage of bankruptcies involve medical bills or the loss of income due to illness. Although the exact percentage is debated, the broader consensus is that medical expenses play a critical role in pushing many into bankruptcy. - Lack of Universal Coverage:
The US does not have a universal health care system. This means that millions of Americans either lack insurance entirely or have coverage that doesn’t fully protect them from the high costs of major illnesses or unexpected emergencies. In contrast, countries with universal or national health care systems (like Canada, the United Kingdom, or many European nations) provide more comprehensive coverage, which significantly reduces the financial shock of medical events. - Protective Measures in Other Countries:
In nations with universal health care, policies such as cost caps, comprehensive benefits, and government subsidies help ensure that individuals aren’t burdened with catastrophic expenses. As a result, medical bankruptcies are far less common because the financial risk is shared across the society rather than falling solely on the individual. - Complex Causes:
It’s important to note that while medical expenses are a significant factor, bankruptcies in the US are usually the result of a combination of issues—including lost income, pre-existing financial vulnerabilities, and sometimes other debts. The term “medical bankruptcy” can be somewhat misleading since it rarely reflects a single cause.
How do you think medical related bankruptcies should be handled?
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