I just watched a television ad aired by DividedWeFail.org¹ that said:

1.85 million Americans go bankrupt due to medical bills in one year.

I can only deduce one fact from that statement: either AARP or U.S Courts² need to fire their editors and proof-readers. Surely there’s no way either of those organizations could have deliberately lied with an important election pending in November.

Here’s my problem: The bankruptcy statistics published by U. S. Courts just don’t match that number that’s being touted by DividedWeFail.org.

Here’s the facts: As of 2005, there are three types of bankruptcies:

• Chapter 11 is primarily limited to a business restructuring, but also open to individuals with unsecured debt (like credit cards) exceeding $336,900 or secured debt (like mortgages) exceeding $1,010,650. While it’s possible that some Chapter 11 filings are due to medical expenses, these filings make up a tiny percentage of annual bankruptcy filings (well below 1% in 2006).
• Chapter 13 is primarily for individuals who are behind on their loan payments. When you file for this type of bankruptcy, you get an opportunity to pay down your debt and keep your assets.
• Chapter 7 is for business or individuals and results in liquidation of assets. This type of bankruptcy is where large medical expenses fall.

With the exception of 2005 when Chapter 7 filings spiked to a whopping 1,631,011, the number of filings has never exceeded 1.2 million for any year since 1990, with the number of filings for 2007 being about 1/3 of what’s being reported by DividedWeFail.org.

According to a study done by Harvard³, approximately one-half of the 1.4 million filings in 2001 were due to illness and medical bills. But the more interesting statement with respect to the Harvard study was this:

The study estimates that medical bankruptcies affect about 2 million Americans annually — counting debtors and their dependents, including about 700,000 children.

Now wait a cotton-pickin’ minute… it’s all beginning to make sense. If a married man with eight children filed for bankruptcy because of medical expenses, would you think I was painting an accurate picture if I said “10 people went bankrupt due to medical bills”? Sure there were 8 kids affected — and that’s sad… but to say those 8 kids went bankrupt is simply inaccurate because their future credit rating is neither related to nor affected by their parents’ bankruptcy.

If you’re thinking straight, you’d tell me I was a blooming idiot. But the sad fact is that millions of misinformed voters will be quoting DividedWeFail.org between now and election day without ever knowing they’ve been duped. Thank you AARP — once again you’ve mangled the truth beyond recognition.

References:
1 http://www.dividedwefail.org
2 http://www.uscourts.gov
3 http://www.consumeraffairs.com/news04/2005/bankruptcy_study.html

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As well as you did in last night’s debate, there was one particular area where you could have really excelled. You have a gift for being able to explain each candidate’s policies in terms that Main Street America will understand, but you allowed a golden opportunity to just slip right through your fingers. Case and point:

• Joe works for An Itsy-Bitsy Company and pays $2000 a year in federal taxes.
• An Itsy-Bitsy Company does not provide health insurance for Joe.
• Mary works for A Big Conglomerate and pays $1000 a year in federal taxes.
• A Big Conglomerate provides health insurance for Mary who has a modest amount deducted from her paycheck to help defray the cost of that insurance.
• The American Medical Association¹ estimates that the government is giving more than $125 billion — between $1500 and $2500 per employee — in tax breaks to employers who offer health insurance.

Huh? My calculator says that at least 25% of Joe’s tax dollars are being used to subsidize Mary’s health insurance — a benefit to which Joe is neither entitled nor able to pay for out of his own pocket.

So which candidate’s plan is going to give Joe the most control over his health coverage and ease the financial burden of providing for his family?

Say what? Don’t tell me… tell Joe. And keep telling him over and over until he gets it, because November 4 is going to change his life. It’s up to him as to whether that change is going to be good or bad.

References:
1 http://voicefortheuninsured.org/amaproposal2.html