Study: Heathcare Costs Account for 49% of Foreclosures.

[SirNitram]

Link

Abstract

In recent years, there has been national alarm about the rising rate of home foreclosures, which now strike one in every 92 households in America and which contribute to even broader macroeconomic effects. The “standard account” of home foreclosure attributes this spike to loose lending practices, irresponsible borrowers, a flat real estate market, and rising interest rates. Based on our study of homeowners going through foreclosures in four states, we find that the standard account fails to represent the facts and thus makes a poor guide for policy. In contrast, we find that half of all foreclosures have medical causes, and we estimate that medical crises put 1.5 million Americans in jeopardy of losing their homes last year.

Half of all respondents (49%) indicated that their foreclosure was caused in part by a medical problem, including illness or injuries (32%), unmanageable medical bills (23%), lost work due to a medical problem (27%), or caring for sick family members (14%). We also examined objective indicia of medical disruptions in the previous two years, including those respondents paying more than $2,000 of medical bills out of pocket (37%), those losing two or more weeks of work because of injury or illness (30%), those currently disabled and unable to work (8%), and those who used their home equity to pay medical bills (13%). Altogether, seven in ten respondents (69%) reported at least one of these factors.

If these findings can be replicated in more comprehensive studies, they will suggest critical policy reforms. We lay out one approach, focusing on an insurance-model, which would help homeowners bridge temporary gaps caused by medical crises. We also present a legal proposal for staying foreclosure proceedings during verifiable medical crises, as a way to protect homeowners and to minimize the negative externalities of foreclosure.

Full study: Link

[Stark]

That's a pretty terrifying statistic, but given the enormous medical costs thrown around by Americans here, it's not really surprising.

[Vendetta]

Hey, could be worse though, could have state provided socialised healtcare like some backwards communist countries.

[Ekiqa]

Hey, could be worse though, could have state provided socialised healtcare like some backwards communist countries.

Yeah, were the financial system is still regulated, and no one has had their homes foreclosed on, no tent cities propping up.

You're so LUCKY down in the US.

[Mayabird]

Illness is also the most common reason that people who get microloans default. Instead of being wishy-washy about solutions, though, they go straight ahead and say that the best way to get people to pay back the loans is to keep them healthy, because sick people can't work. Makes me wonder if anyone has studied the potential benefits of socialized healthcare to the U.S. economy based on people not being sick because of lack of medical treatment, especially checkups and basic prevention. Probably not.

I'll post the article too.

Good health helps poor borrowers repay loans

Meredith May, Chronicle Staff Writer
Thursday, October 23, 2008

Global microfinance leaders met Wednesday in San Francisco to discuss a cutting-edge strategy to get the world's poorest borrowers to repay their loans: Keep them healthy.
More Bay Area News

Philanthropists and anti-poverty experts who use microloans to help families buy a cow or a kiosk to lift themselves out of extreme poverty have noticed illness is the most common reason for default.

Freedom from Hunger, based in Davis, is funded by a $5.6 million grant from the Bill and Melinda Gates Foundation and is among a handful of nonprofits experimenting with health care microfinancing.

"Through lots of discussions with banks and microfinance institutions, they weren't seeing an impact over time because people were using the microloans to pay for a sick kid instead of growing a business," said Priya Jaisinghani, global development program officer for the Bill and Melinda Gates Foundation.

In 2007, Freedom from Hunger started its Microfinance and Health Protection Program at microfinance institutions in five nations, offering discount doctor visits, health care savings accounts, affordable medicines and emergency health care loans. In most cases, customers were required to attend health care classes in order to get the small business loan.

"We're venturing out into new territory," said Myka Reinsch Sinclair, Freedom from Hunger's director of microfinance and health protection. "We wanted to go beyond health care education."

The theory is that healthier borrowers will make better bank customers. They will repay their loans, come back for larger loans, and their startups will thrive, along with their families. The more they invest, the more the bank will have to lend to their neighbors.

Representatives from microfinance institutions in Bolivia, India, the Philippines, and the West African nations of Benin and Burkina Faso met at the Holiday Inn at Fisherman's Wharf to compare notes from the pilot program's first year.

Jaime Aristotle Alip, managing director of the Center for Agriculture and Rural Development, a Philippine bank network, said 15,000 rural families are now getting basic medical care.

"When we first talked to the doctors about offering discounted care, we got seven to sign up," he said.

"Now there are 51 doctors. They don't lose money because they get more patients this way."

José Auad, general manager of the Crédito con Educación Rural, a Bolivian microfinance institution, said women are attending health seminars and using health care loans to pay for eyeglasses and minor surgeries. The average loan is $300.

"In order for this to be profitable, it has to go to a larger scale," he said. "But we also realize there are social profits."

Freedom from Hunger will continue its experiment through 2009 and share research findings with microfinance institutions worldwide.

E-mail Meredith May at mmay@sfchronicle.com.

This article appeared on page B - 1 of the San Francisco Chronicle

[Darth Wong]

The sick thing about the US is that they do provide assistance with health-care costs, but only after you have become impoverished. So if you're a middle-class person and you get sick, the government basically says "We can't help you now. Come back to us when you're financially wiped out and you've lost your home". Now the logical person might say "this makes no sense; society has to pay now or later, and this way a productive citizen is wiped out". But the US has an ideology and they're sticking to it. Better dead than red!

[Flagg]

The sick thing about the US is that they do provide assistance with health-care costs, but only after you have become impoverished. So if you're a middle-class person and you get sick, the government basically says "We can't help you now. Come back to us when you're financially wiped out and you've lost your home". Now the logical person might say "this makes no sense; society has to pay now or later, and this way a productive citizen is wiped out". But the US has an ideology and they're sticking to it. Better dead than red!

And here's the kicker: If you have long term conditions that require alot of medications and office visits as well as monthly psych visits, it makes no logical sense to go back to work because you will lose those benefits. That's the horrid situation I'm in right now. I want to work, but I'm forced to remain unemployed in order to receive basic health care.

[SirNitram]

That's the part no one tells you. Once you're here, there is literally no incentive to return to work unless you can immediately slide into a job that has truly luxurious benefits. There is incentive to remain here. It's all in how things are calculated, in an apparent and dramatically failed attempt to make sure you don't 'leech off the system' unless it's needed.

I literally cannot just move into a job that would earn me about what I get now and work up. If I get a job, I must immediately be able to drop 100 on premiums a month. For someone who has serious health issues which make it so I would need lots of sick days, that's just not feasible.

[Flagg]

That's the part no one tells you. Once you're here, there is literally no incentive to return to work unless you can immediately slide into a job that has truly luxurious benefits. There is incentive to remain here. It's all in how things are calculated, in an apparent and dramatically failed attempt to make sure you don't 'leech off the system' unless it's needed.

I literally cannot just move into a job that would earn me about what I get now and work up. If I get a job, I must immediately be able to drop 100 on premiums a month. For someone who has serious health issues which make it so I would need lots of sick days, that's just not feasible.

The worst part for me is that my main physical issue (my stomach and guts in general) interplays with my psych issues concerning anxiety and stress. So I can get a job, but cannot seem to process stress without becoming physically ill. It's bad to the point where I can't carry on arguments on the internet without the minor stress causing me severe stomach pain, which is frankly pathetic.

[Big Phil]

These are clearly liberal lies; everyone knows the reason people default on loans (and the reason for the mortgage meltdown) is that they're not white. Mud people cannot handle money responsibly, and now they've dragged the entire economy down into the mud (no pun intended) with them.

Oh yeah... and it's also the Jews' fault... somehow