“Borrowing to Stay Healthy”

That’s title of a report put out last week by New York public policy group Demos, and the Access Project, affiliated with Brandeis University. According to the report, 29 percent of low- and middle-income families with credit card debt reported using their credit cards to pay expenses related to major medical problems.

This is further proof that a viable health care plan, and the political capital to make it a reality, has got to be among the top requirements for the Democratic candidates now lining up for a presidential run in 2008.  As anyone who’s been through a major medical health crisis can attest, it ain’t cheap. Even those with “gold-plated insurance” plans end up paying a bundle out of pocket during an extended illness, hospitalization, or treatment. Since credit is often easier to get than cash flow, and medical expenses are on the rise, it’s no surprise to find that people with no other recourse are using plastic when the worst happens.

What’s frightening is that health care crises can be on-going and things often get worse before they get better, which is going to leave folks paying, or worse yet, not paying, interest on a rapidly mounting pile of debt.

Imagine for a moment the seriously ill patient who needs to be hospitalized. In the cold new world of health care, the primary message to such patients is often “Show me the money!”

In many instances, of course, the patient does not have the money. What the report found is that even people with health insurance are being drained by health care costs to the point where the credit card seems the only option.

“As deductibles and co-payments increase,” the report said, “hospitals are finding more patients unable to pay their medical bills. Some hospital management analysts are expecting an increase in self-pay patients and are bracing for higher levels of bad debt.

“In recognition of the evolving payment landscape and the risk of hospital bad debt, health care providers are more aggressively seeking upfront collection of co-pays and deductibles. A component of this strategy is to encourage patients to use third-party lenders such as credit cards to pay for medical expenses they cannot afford, which families frequently do to meet high medical bills.”

It’s one thing to reach for your Visa or MasterCard to pay for a Barbie doll or flat-screen TV. It’s way different to pull out the plastic because you’ve just learned you have cancer or heart disease, and you don’t have any other way to pay for treatment that would prevent a premature trip to the great beyond.

A society is seriously out of whack when legalized loan sharks are encouraged to close in on those who are broke and desperately ill.

This medical indebtedness is hardly surprising. Health care costs continue to rise much faster than family income and inflation, and Americans (who have stopped saving altogether) were already mired in staggering amounts of personal debt. Some families have been putting their groceries on credit cards. Many have taken the financially disastrous step of using home equity loans to bring down credit card balances.

A serious illness for people already in shaky economic circumstances can be the final push into bankruptcy.

Full story here