Colorado Law Blog

Nearly two out of three bankruptcies stem from medical bills, and even people with health insurance face financial disaster if they experience a serious illness, a new study shows.

The study released last week and published online by The American Journal of Medicine, may even underplay the dire reality since the data were collected before the current economic crisis. In 2007, medical problems contributed to 62.1 percent of all bankruptcies. Between 2001 and 2007, the proportion of all bankruptcies attributable to medical problems rose by about 50 percent.

The data on medical bankruptcy, compiled by researchers at Harvard Law School, Harvard Medical School and Ohio University, is based on a survey of 2,314 randomly selected bankruptcy filers during early 2007.

Among families who were bankrupted by illness, those with private insurance reported average medical bills of $17,749 compared to those who were uninsured, who faced an average of $26,971 in medical costs. Those who had health insurance but lost it in the course of their illness reported average medical bills of $22,568. Hospital costs accounted for about half the expenses (48 percent), followed by prescription drugs (18.6 percent), doctor's bills (15.1 percent) and insurance premiums (4.1 percent). Medical equipment and nursing home care rounded out the list.

The health problems that left patients with the highest out-of-pocket expenses were ranked as follows:

• Neurologic (i.e., multiple sclerosis): $34,167


• Diabetes: $26,971


• Injuries: 25,096


• Stroke: $23,380


• Mental illnesses: $23,178


• Heart disease: $21,955

How bad are things in Colorado? We're now among the top 10 states in the nation with the highest rates of employed people without health insurance. There are 450,000 Colorado workers who don't have health care insurance.

Posted by Linda Chalat at 11:52 AM | Permalink | Comments (0) | TrackBacks (0)

Mattel Inc. and its Fisher-Price subsidiary will pay a $2.3 million civil penalty in an agreement with the U.S. Consumer Product Safety Commission for selling Chinese-made toys with hazardous levels of lead.

The fine, the commission's largest for a toymaker, involves 95 toy models, from Barbie accessories to "Sarge" cars, the commission announced last week. Mattel, based in El Segundo, California, imported as many as 900,000 toys from September 2006 to August 2007 that violated rules on lead levels, the commission said. Fisher-Price, based in East Aurora, New York, imported as many as 1.1 million such toys, including Go Diego Go Rescue Boats and the Bongo Band, according to the commission.

Mattel "promptly took a series of steps after discovering compliance issues with some of our toys at that time," the company said in a statement. As part of the settlement, Mattel and Fisher-Price denied they knowingly violated federal law, as CSPC alleges, the consumer safety commission said.

Mattel recalled more than 21 million toys made in China, including Elmo Stacking Rings and Bedtime Dora, after they were found in 2007 to have lead paint or dangerous designs. After the recalls by Mattel and other companies in 2007, Congress overhauled consumer regulations, effectively banning lead in toys, requiring the CPSC to hire more workers and boosting fines on sellers of dangerous products.

The lead-tainted toys contributed to debate in Congress over the safety of products imported from China, including milk products and the main ingredient in the medicine heparin. Chinese officials promised to improve oversight.

Posted by Linda Chalat at 3:42 PM | Permalink | Comments (0) | TrackBacks (0)

A ruling on Wednesday by the 10th U.S. Circuit Court of Appeals in Denver could pave the way for a Utah couple to reach a settlement in a medical malpractice lawsuit. Robert and Paea Olah allege their daughter suffered brain damage during delivery because of negligence by osteopathic physician Ronald Baird, who denies the allegation and who refuses to grant permission to his insurer to settle the claim out of court.

However, a bankruptcy filing by Baird and the ruling by the Court of Appeals could bring a resolution to the litigation. The court said the "right to settle" is an asset and the trustee in the bankruptcy case has the option of "selling" that right to the Olahs. If they obtain the right to settle, the Olahs can submit their claim for $1 million to the doctor's insurance company for a fair evaluation.

Baird has a liability policy with a $1 million limit issued by the Utah Medical Insurance Association (UMIA). Court records say that under the policy terms, the association could not evaluate a claim or make a settlement offer without Baird's permission. The doctor said Wednesday that the Olahs do not have a case and that the ruling takes away his right to defend himself.

Baird filed for bankruptcy in 2006, two years after the Olahs brought their suit in 4th District Court in Provo. The parents offered the trustee of the bankruptcy estate $20,000 for all powers that could be exercised under the insurance policy, including the right to have UMIA consider their claim and the authority to accept a settlement offer.

After the trustee concluded that he was not allowed to give rights held by Baird to the Olahs, the couple filed suit in bankruptcy court seeking a declaration that the policy was part of the doctor's assets. A bankruptcy judge ruled against them, and that decision was upheld by U.S. District Judge Bruce Jenkins in Salt Lake City. The case then went to the 10th Circuit.

If the trustee decides to sell the right to consent to a settlement, the Olahs likely would be the only ones interested in buying it.

Posted by Linda Chalat at 4:35 PM | Permalink | Comments (0) | TrackBacks (0)