A few weeks ago we wrote about a small study indicating that health costs had contributed to the mortgage meltdown which in turn has wrought havoc with the entire global economy; it found that 49 percent of foreclosures had a health-spending factor (and keep in mind that people miss work or lose their job—and their insurance—when they or a family member become seriously ill) Today's Wall Street Journal takes a look at people squeezed between paying for medical bills or the mortgage. The Journal didn't come up with a firm number of how many foreclosures are health related—except that it's a lot.

Just how many people are being forced to choose between home and health care is hard to tell. Freddie Mac, the big government-sponsored home-loan investor, says illness appears to be a growing reason homeowners with some of the company's 12 million mortgages are falling behind in payments. Illness was the chief cause for 15% of Freddie Mac's delinquencies in the first half of this year, behind such reasons as loss of income and too much debt. Although that percentage is down from previous years, the actual numbers are higher because more people are delinquent on their loans.

 

 

 

 

Hospitals tend to be more willing to work out payment plans than banks; medical providers usually have to get a court order to put a lien on a home.

Consumer advocates usually advise patients that they should not refinance a mortgage or use home-equity loans to pay medical bills, but of course some people do just that when faced with persistent bill collectors. With housing prices falling, however, it's harder (and riskier) to do that. As Susan Harris, 46, told the newspaper, she was self-employed and uninsured when she was diagnosed in 2003 with liposarcoma, a type of cancer. She cashed out her retirement funds and turned them over to the hospital, qualifying for Medicaid as she spent down her assets. But she still had $26,000 in hospital bills that Medicaid didn't cover, and that amount kept growing as more bills piled up. She refinanced her home last year and paid $28,000 on medical bills. She just had yet another operation to remove cancer from her lung. But this time her house, with its falling value, can't be her medical piggy bank.

"I will once again be cancer free, but over my head in debt," she told the paper. "There's no more money in my house to mortgage it again."