Illness brings financial ruin and severe and avoidable hardship to millions of families here in the wealthiest nation on earth. Of all bankruptcies in 2007, 62% were precipitated by illness.

Of those bankrupted by medical costs, 4 out of 5 started out with health insurance, according to a study just released by the American Journal of Medicine. Astonishingly, 3 out of 5 managed to still have health insurance at the time of bankruptcy.

More, medical bankruptcy worsened dramatically in the years before the economic downturn of the last year. Bankruptcy due to medical debts rose by 50% between 2001 and 2007. Since then millions of people have had to forfeit their health insurance as they lose their jobs.

I was talking about it with an old friend who came to visit from out of town. She casually remarked: “But now everyone has one of these horrible stories. I have one. My mother has one. Everyone I know has one.”

Her story:

Several years ago I started having recurrent strep tonsilitis infections. My tonsils would get big, like golf balls. One of the times it started happening was on a weekend and there was no way to even make a doctor appointment — if I even had a regular doctor then — so I went to the ER.

But the young resident I saw in the ER wouldn’t do any tests. He gave me a lecture! He said: “People like you are gobbing up the system.” He went on about about how, by coming to the ER, I was driving up health costs for everyone because all I needed was a prescription for antibiotics.

What choice did I have? I remember we got into an argument over a rapid strep test — I knew it would be positive and give him the result he needed to write the prescription. Instead he discharged me with no tests and a big bill.

Then the next day I had a high fever and, you know, I could barely swallow anything, my tonsils were huge. So I went back to the same ER where I was accused of “gobbing up the system” and they admitted me for IV antibiotics and fluids! Well the whole thing cost thousands. I ended up putting it on my credit card.

But pretty soon I couldn’t even make the minimum payments and then collection agents were, like, hounding me. It was awful! So finally I borrowed from my brother and went in person to the collection agency with a check. To this day my brother won’t let me live it down. Whenever I see him he reminds me that somehow it was all my fault. Oh its horrible.

The study, “Medical Bankruptcy in the United States, 2007” supports the observation that we all know someone with a story like this. The researchers, David Himmelstein, Steffie Woolhandler, Elizabeth Warren and Deborah Thorne, found that those bankrupted were middle class families: 2/3rds had owned a home. 3/5ths had attended college. (What about the people who lacked the means or wherewithal to seek bankruptcy protection, or who, like my friend, simply paid the bill?)

The impact upon the families who were bankrupted was profound. 2/5ths lost income or lost a job due to illness or due to lost work to care for a sick family member. Those who were ill and lost private insurance coverage due to the bankrupting illness, lost their coverage usually because the patient or family caregiver lost their job.

What good is health insurance when in spite of having it, personal medical costs break the household finances?

What good is having health insurance tied to employers, when a family health crisis costs you your job?

My friend did not declare bankruptcy. She has since rebuilt her credit. We know there are millions like her — how many?

President Obama told the American Medical Association meeting this week:

If we do not fix our health care system, America may go the way of GM; paying more, getting less, and going broke.

This week we have had an earful of proposals based upon the failed system of private health insurance, proposals that Don McCanne aptly names “unaffordable undersinsurance.” Meanwhile single payer is getting a hearing throughout the nation and in the halls of Congress. The word is out.

Mr. President: single payer national health insurance is the only proposal that will put an end to medical bankruptcy and keep us from going broke.