Getting Sick and Going Broke: Medical Debt Pushes 550,000 U.S. Families Into Bankruptcy Each Year.

In the U.S., an astounding 66.5% of bankruptcies are due to medical bills. That’s 550,000 medical bankruptcies each year. Why are Americans being financially destroyed for getting sick?

The above numbers represent an inflation adjusted five year average ending with 2025

The United States’ per capita health care costs are the highest of all countries, almost double the average of other countries with comparable health care systems, and triple that of Japan.

Now, I know a lot about the proud citizens of Japan, and I don’t think they’re limping around with lousy health care (the Japanese have long life expectancies, almost eight years longer than US citizens).

Now, many factors go into life expectancy data beyond per capita health care costs. Still, this is a telling metric. Modern countries like Japan are getting three times more for their citizen’s health care investment than US citizens. And to be clear, citizens of all modern countries are getting a better deal on health care costs than US citizens.

As taxpayers stuck with this system, why aren’t we mad as hell when we buy meds at ridiculous prices, require physician services weighed down by regulations, and pay monopolistic brick and mortar operating costs?

Now, with the US having by far the highest per capita health care costs among major countries, one would naturally expect the US to rank in the top tier, or even at the very top, in health care quality.

Well, according to CEO World Magazine, here are the top five countries in terms of health care quality:

Taiwan, South Korea, Australia, Canada, and Sweden (in that order).

But wait. The United States health care system (proclaimed ad nauseam by its members and countless politicians) is the “Best health care system in the world!”

Right? How many times have you heard that?

Remember the Affordable Health Care Act propaganda? This was supposed to improve health care quality and make it affordable for everyone.

Really? The United States, the undisputed leader in medically related bankruptcies (66.5%), ranks a sad 15th in quality ratings.

In fairness, there are many healthcare quality rating institutions, and there are many aspects to rate. Still, most rating systems yield results similar to those of CEO WORLD in terms of winners and losers.

As far back as I can remember, politicians on both sides have vowed to “fix” the American health care system. I’ll stop searching my memory at Bill Clinton’s first term.

Clinton was different and a smart politician; he appointed his wife, Hillary Clinton, to take on the health care Leviathan and develop a comprehensive plan to provide universal health care for all Americans.

This was 1993, and the per capita cost of US healthcare was an outrageous $3299.00. Now, 33 years later, we’re closing in on $16,000.00 (2026 estimate), and still no universal health care — whatever that means.

Note: $1 in 1993 = $2.30 today. So, inflation-adjusted per capita health care from 1993 would be $3299 x 2.3 = $7588 today, less than half of today's actual cost. So much for political promises and fiddling around with healthcare, including unleashing the Affordable Health Care Act on the American public.

Ok, so where am I going with US health care?

Simply this:

1. No industry can arbitrarily increase the cost of its goods and services without encountering a potentially serious breaking point.
2. No industry is irreplaceable.
3. In a closed system like the US health care system, balance is enforced by competition, which is discouraged by government regulations and licensing — a punishment-and-reward device operated by state health care bureaucrats — and finally, by printing money. All of these raise costs.

I am convinced that the US health care industry will soon collapse under its own weight and be replaced methodically, piece by piece.

Why? Because in simple terms, nobody can afford it.

The US government cannot continue to meet its healthcare (and other) expenses by printing money. This has never worked, and makes the situation even worse.

In comes the baby boom, and everything changes.

The single most important population shift in the US over the last 100 years was the baby boom that followed WWII, when American troops came home and started making babies.

The baby boom officially started on January 1, 1946, and concluded in 1964. Babies born in this 18-year time frame are called “boomers,” and they’re aged 62 to 80, fitting (almost) perfectly into the Medicare “slot.”

Medicare (the US answer to national government healthcare) isn't easy to discuss, and I don’t want to make this complicated, so let's say that all boomers start taking Medicare at age 65. This means that boomers started receiving Medicare coverage in 2011, and the last boomer will enter the system 18 years later, in 2029 (roughly three years from now).

As of this date, 2026, Medicare (like Social Security) is supported by taxes and is also partially funded by printed money.

Individuals entering this system will live an average of 18 to 21 years. (Note that, with growing interest in anti-aging medicine, it’s hard to believe that, in over 20 years, no progress will be made in this research effort.

Important: the average per-person cost of Medicare is not a perfect bell-shaped curve; rather, it is weighted towards the three-year end-of-life period. I don’t want to get into statistics about this, but let's just say that Medicare membership is still increasing, and costs are increasing as well due to end-of-life expenses becoming a bigger factor for those at the beginning of the boom.

Overall, however, the Medicare boomer population is shrinking due to death, but new boomers are still entering the Medicare system, slowing down the shrinkage.

Individual Medicare costs, especially end-of-life care, will soon reach a tipping point beyond which costs will decline. I do not think Medicare charges will decline as the boomer mass shrinks, but they will level off, leaving an expensive end-of-life “tail” as the boomer bubble moves through the system, and non-boomers become the majority.

This is a simplification, but I am not an actuary. If you want a more complex explanation of Medicare’s financial future, here is a link worth reading: Warning, this is complicated reading and paints a bleak canvas of Medicare’s future, especially through the front-to-back full-boomer period.

The End of the Boomers:

Now imagine the boomer mass as an oblong bubble slowly moving through a tube and slowly dissolving along its way. This imaginary configuration is a snapshot of where we are now with boomers and Medicare.

It takes 18 to 21 years for the bubble to completely dissolve, but it will.

It’s kind of ugly to describe it this way, but this moving mass or bubble tosses trillions of dollars out into the surroundings of its tube as it moves through it.

But what happens when the gravy train stops, and all the boomers are gone? Well, a huge industry supporting the boomers will be gone, too. Think of half of the health care industry disappearing rather quickly after several years of costly operation.

Downsizing saves money in the long run, but in the short run, it is very costly, mainly because the operational apparatus stays in place for a long time after the money supporting it drops below the break-even point, and debt piles up.

Won’t prices drop with the downsizing, or worse, will they increase?

Think of it this way: In a doctor’s practice, reducing costs is difficult because most fixed costs (office overhead and essential staffing) remain the same. Giving extra employees the boot helps a little, but the doctor can’t go below the minimum staffing level. So with fewer patients, even with cost reductions, the remaining patients must pay more, or the doctor shuts the doors.

My point with Medicare is that this worsening situation towards the end of the bubble (costs rising, revenue falling) will eventually require support with printed money, potentially raising individual health care costs even more via inflation.

This article examines individual health care costs and why they are so high in the US. I have just illustrated why they will keep rising: they were built to support a huge government industry whose costs fluctuate and require tax-financed and money-printing financing.

There is no way to raise income taxes high enough to support the entire weight of Medicare right now.

In the end, however, there will be a rapid, abrupt drop-off in the Medicare population, leaving an oversized medical industry behind. This will be costly to address and painful to digest, as costs are more likely to rise than they are to fall.

The huge cost of downsizing a behemoth like the US health care industry will be borne by the generations left behind.

Note: declining birth rates make the long-term crisis ditch even deeper. Babies born today will be 40 years old before the financial earthquake of the baby boom stops rumbling, and today’s babies will pay the price.

I do not know of any plan to say goodbye to Medicare’s boomer population in a painless way. Right now, boomers are the largest group of Medicare beneficiaries. When this group leaves, there will be a mountain of excess medical equipment and personnel.

As far as I know, there is no well-thought-out plan to systematically reduce costs over the last ten years of the baby boom bubble.

Here is one of the most reasonable articles I could find on the subject.

I am a boomer myself, and I see a serious path ahead for Medicare and its makeup. I do not see US per capita costs lessening; rather, they are increasing rapidly, and will get worse.

Really wish I had better news.