Imagine having to borrow money and risk serious debt just to stay healthy. The article "Borrowing to Stay Healthy" provided some scary statistics on what low to middle income people are resulting in doing to pay off their medical bills. It also provides real stories from people who have had to charge their medical debt to credit cards to illustrate the impact. This paper outlines the business research performed, the purpose for sharing it to the public, and the problem under investigation. It also identifies the parties involved in conducting the research and describe the methods used to conduct the research project.
Business Research and its PurposeThe business research was performed on the credit card debt crisis of people that have medical expenses compared to those with debt that are not medically indebted, and examining trends of borrowing to stay healthy. The purpose of the article was to provide awareness of the impact of consumers charging medical expenses, and how it can negatively affect their finances, and alternatives to charging the expenses.
Problem Under InvestigationThe problem that is provided is that consumers are lowering their financial stability. It illustrates how charging health care costs, as interest rates on credit cards can rise significantly, and out of control credit card fees and penalties can affect households. The outlined issue is not only specific to the uninsured population - the problem is just as real for underinsured and those that are charged for care out of their heath care network, and other unmanageable out-of-pocket expenses. There is also an underlying message that there is more of a risk for those in that category to file for bankruptcy.
Parties Involved in Conducting the ResearchDemos is the organization that founded the Access Project to perform the research on health care credit card debt. Demos is New York based non-partisan public policy research and advocacy organization (www.demos.org). Demos coordinated a national survey of low and middle-income households with credit card debt. Their research involved provided statistics to prove that people with medical debt typically have much more debt than those that do not charge for medical expenses. It also illustrated that young adults had the highest level of average credit card debt than of any age group, and that those with medical debt were more likely to be called by bill collectors.
Methods Used to Conduct the Research ProjectIn 2005, the Access Project for Demos commissioned a national household survey of households with credit card debt. This consisted of 1,150 phone interviews with low- and middle-income households whose incomes fell between 50 percent and 120 percent of local median income - about half of all households in the country. In order to participate, a household had to have credit card debt for three months or longer at the time of the survey. The survey findings reflect 29 percent of low- and middle-income households--representing 41 million people in 15 million households.
ConclusionThe article had some sound research that provided proof that medical costs were a key factor in higher credit cared balances, and showed that there are negative consequences for America's households. Mark Rakuvina, director of the Access Project, surmised it well with "Too many working people are piling up credit card debt, and risking their financial security, simply because they have the misfortune of getting sick." (Borrowing to Stay Healthy, 2007)ReferencesDemos, a Network for Ideas & Action. Retrieved June 3, 2007, from Demos Web site:http://www.demos.org/page2.cfm2007).Borrowing to Stay Healthy. Credit Union Executive Newsletter. 33, 4.