The Right Coast

March 12, 2005
Bankrupt Political Discourse
By Gail Heriot

I still don't really have an opinion on the bankruptcy bill. I haven't read it (or a decent summary) yet. But I nevertheless breathed a sigh of relief when it passed in the Senate this past week. I couldn't stand the idea that the bill might be scuttled on the basis of a misleading piece of propaganda.

I am referring to "Illness and Injury as Contributors to Bankrupcy"--a supposedly academic study that was the subject of an extraordinary media blitz back in early February. Headlines like "Medical Bills Cause About Half of Bankruptcies" were on the front page of newspapers all over the country that week. Not only were these headlines false, the whole study was deeply flawed and constructed to greatly exaggerate the importance of medical problems as a cause of bankruptcy.

Loyal Right Coast readers may recall that I did a critique of the study back when it came out, which I expanded on in a National Review Online essay. But if I had had illusions that anyone actually reads and reacts what I write, they would have been dashed by the experience. A month later, newspapers, this time editorializing against the bankruptcy bill, continued to cite the study as proof that either half of all bankruptcies are caused by medical bills (a false claim) or that half of all bankruptcies were caused by illness or injury (also a false claim). The study remained a centerpiece of the rhetorical case against the bankruptcy bill.

At least the Washington Post carried my letter to editor today. It read in part:

"In "A Bill Bankrupt of Pity," E.J. Dionne [op-ed, March 1] claims that a
recent study on bankruptcy found that half of bankruptcy debtors "said illness or medical bills drove them to bankruptcy." In fact, the study, "Illness and Injury as Contributors to Bankruptcy," found no such thing. The number of actual debtors who said that illness or injury was even a significant cause of their bankruptcy was much smaller (28.3 percent). And many of those had quite modest medical bills and missed very little work.

"To be able to claim that half of all bankruptcies had a medical cause, the authors had to include a number of dubious case categories, including bankruptcies caused by chronic gambling, alcohol and drug addiction, and birth or adoption, as well as all cases in which the debtor had paid more than $1,000 in medical bills over the two years leading up to the bankruptcy. This last category is especially misleading. The debtors included in it did not have to claim that medical bills were a special problem, much less that such bills "drove them to bankruptcy." It was sufficient that they spent $1,000 -- hardly an unusual sum for a family over two years."

Alas, I had hoped that having a blog would avoid the need to write letters to the editor ....