The question this hearing’s title presents—“Is Our Health Care System Bankrupting Americans”—is relatively easy to answer.  That answer is no.  The empirical evidence, aside from one Harvard University study, demonstrates that there has been no increase in the number of bankruptcies caused by medical debt.

        Medical bills and medical problems are a source of concern for many American families and, unfortunately, in some cases, these problems lead families into bankruptcy.  But this is why the Bankruptcy Code allows low-income debtors to discharge their medical debts completely and higher-income debtors to pay back only what they can afford.

        In short, I believe the Bankruptcy Code already strikes the appropriate balance between debtors and creditors, including health care providers.  There is no need to consider further reforms to the Bankruptcy Code at this time.

        However, with government-run health care at the top of the majority’s agenda, I doubt that the main reason we are here today is talk about reforms to the Bankruptcy Code.  Rather, I suspect we are here to discuss why a new Harvard study on medical debt and bankruptcy should lead us to conclude that this country needs government-run health care.

        There are at least two problems with the argument that since medical debt plays a significant role in bankruptcy filings, we therefore need government run health care.

        First, the Harvard study that is the foundation for this argument is fundamentally unsupportable.  The study’s findings rest primarily on the way the researchers define and count what constitutes a medical bankruptcy instead of on an actual increase in medical debt related bankruptcies.  Indeed, even assuming the researchers’ methodology is correct, in absolute numbers medical debt bankruptcies actually decreased between their 2001 and 2007 studies.  Yet, by using percentages instead of actual numbers, the researchers claim that medical debt bankruptcies increased during the time period.

        Moreover, no other study of medical debt and bankruptcy has reported a correlation anywhere near as high as the over 62 percent correlation the Harvard study finds.

        Second, in terms of decreasing the number of bankruptcies in America, there is little reason to believe that government-run health care will have much of an impact.  One only needs to look to Canada to see why this is true.  According to a study by the Fraser Institute, the consumer bankruptcy rate in Canada was higher than the bankruptcy rate in the United States in 2006 and 2007 despite the fact that Canada has a universal, single-payer, government-run health care system.

        It is projected that the health care legislation the majority is trying to move through Congress will eliminate up to 5 million jobs.  Certainly the loss of 5 million jobs will have a greater impact on the number of Americans filing for bankruptcy than medical debt, even using the Harvard study’s inflated numbers.

        Every American, regardless of health or financial status, should have access to affordable health care coverage of their choice.  But we should not be making decisions on how to improve America’s health care system based in any part on a flawed medical debt bankruptcy study.  Nor should we use that study as a basis for modifying the Bankruptcy Code.

        I look forward to the witnesses’ testimony and yield back the balance of my time.