This is the real reason most Americans file for bankruptcy

• Two-thirds of people who file for bankruptcy cite medical issues as a key contributor to their financial downfall.
• While the high cost of health care has historically been a trigger for bankruptcy filings, the research shows that the implementation of the Affordable Care Act has not improved things.
• What most people do not realize, according to one researcher, is that their health insurance may not be enough to protect them.

Filing for bankruptcy is often considered a worst-case scenario.

And for many Americans who do pursue that last-ditch effort to rescue their finances, it is because of one reason: health-care costs.

A new study from academic researchers found that 66.5 percent of all bankruptcies were tied to medical issues —either because of high costs for care or time out of work. An estimated 530,000 families turn to bankruptcy each year because of medical issues and bills, the research found.

Other reasons include unaffordable mortgages or foreclosure, at 45 percent; followed by spending or living beyond one’s means, 44.4 percent; providing help to friends or relatives, 28.4 percent; student loans, 25.4 percent; or divorce or separation, 24.4 percent.

While the findings are consistent with past studies on bankruptcy, the data also highlight a key new factor: whether the Affordable Care Act has reduced the burden of medical debt for people.

“Despite gains in coverage and access to care from the ACA, our findings suggest that it did not change the proportion of bankruptcies with medical causes,” an article on the study published in the American Journal of Public Health states.

The number of debtors who cited medical issues as a contributing reason for their bankruptcy actually increased slightly after the law’s implementation — 67.5 percent in the three years following the law’s adoption versus 65.5 percent prior.

The culprit for the lack of improvement was inadequate health-care insurance, according to a co-author of the research, Dr. David U. Himmelstein, a distinguished professor at Hunter College and founder of advocacy group Physicians for a National Health Program.

“Unless you’re Jeff Bezos, people don’t have very good alternatives, because the insurance that is available and affordable to people, or that most people’s employers provide them, is not adequate protection if you’re sick,” Himmelstein said.

Most families do not have enough saved for a simple emergency, let alone thousands of dollars in unexpected medical costs. A recent study from personal finance website Bankrate found that only 40 percent of Americans have enough saved to cover a $1,000 emergency expense.