Elizabeth Warren wades into debate on health care costs and bankruptcy

In a back-and-forth about Medicare for All and the cost of health care, Sen. Elizabeth Warren, D-Mass., directed the discussion back to medical debt and bankruptcy — citing her own work from Harvard Law School.

"Back when I was studying it, two out of three families that ended up in bankruptcy after a serious medical problem had health insurance," Warren said.

This is a new emphasis in the ongoing debate over health care costs, and the debate over what role health care plays in American finances. Instead of focusing on uninsurance, Warren stepped into whether the insurance people currently have is sufficient.

But much of the research around medical debt and bankruptcy is controversial — especially Warren’s own work. 

We decided to take a deeper look.

Warren’s campaign directed us to research published in 2009 in the American Journal of Medicine. Co-authored by Warren, it looks at a random sample of 2,314 bankruptcy filers from 2007. 

The paper examined what debtors reported as their cause of bankruptcy. Warren is referring here to people who either cited significant direct medical debt, remortgaging a home to pay medical debt, or lost income due to illness.

In that category, more than two-thirds of families had health insurance — in fact, three-quarters did. 

So from that simple standpoint, the number checks out.

But it isn’t necessarily that simple. This specific paper has long been the subject of controversy. In part, it’s because it focuses on people who have declared bankruptcy, rather than looking at the financial impact of medical debt at large.

Featured Fact-check

JD Vance

stated on September 15, 2024 in a "Meet the Press" interview

Former President Donald Trump could have destroyed the Affordable Care Act, but “he chose to build upon (it)."

Scholars are also quick to note that, in the majority of so-called "medical bankruptcies" identified in the paper, the issue wasn’t debts incurred to pay off health care bills. Rather, the bigger problem was foregone income because people couldn’t work.

That’s fueled a lengthy back-and-forth, in particular over whether this paper is actually useful in determining what role medical debt plays in fueling bankruptcies.

But its impact on this specific claim isn’t so clear. That’s because Warren narrowed her statement, and focused on something less disputable. 

For one thing, the paper is clear in finding that two-thirds of families — in fact, more than that — experienced bankruptcy after a medical problem despite having health insurance. 

That finding was "the headline of the study," said Paul Ginsburg, a health economist and professor at the University of Southern California. (Ginsburg also noted the importance of foregone income in driving bankruptcies, rather than medical costs.)

And Warren qualified it further during the debate, by limiting this statistic to what was found "back when [she] was studying it" — making it a less sweeping claim.

What’s more suspect is whether this finding — even if accurate — supports her next point: that the cost of health care is what’s driving people’s financial problems, and that a generous single-payer plan would ameliorate this issue. 

For instance, "You cannot go from that result to a conclusion that we need Medicare For All," Ginsburg said. 

Health insurance is more generous today than it was when Warren studied it, thanks to the Affordable Care Act. And insuring everyone — even as generously as Medicare For All suggests — wouldn’t necessarily address the issue of foregone income when people are sick, which the research suggests is a bigger financial concern.

Warren’s claim comes from a paper that is controversial, and whose methods and interpretation have been called into question. That said, this statistic is fairly specific, and her wording in the claim precise. In itself, it’s a fair reflection of what the paper says.

Where caution is more important: Warren says this finding suggests the cost of health care is what’s causing Americans financial harm. That isn’t necessarily borne out, and requires more scrutiny.

This statement is accurate but would benefit from more information. We rate it Mostly True.