It’s been over a dozen years since Susanne LeClair of West Palm Beach, Florida was first diagnosed with cancer and she’s been fighting ever since. Now she, like many other Americans facing life-threatening illness, is bankrupt despite having health insurance.

Before her first cancer-related surgery, LeClair was told by the hospital they accepted her employer-based health insurance.

Susanne LeClaire. Photograph: Courtesy the family

“I paid my $300 copay. After the surgery, I started receiving all these invoices and came to find out the only thing covered was my bed because the hospital was out of network,” said LeClair. “My bills were hundreds of thousands of dollars, so I had no choice but to file bankruptcy.”

LeClair is on the verge of having to file for bankruptcy a second time due to the mounting medical debt she has accrued for additional cancer-related surgeries, regular appointments, medications and supplies related to her recovery, despite having health insurance and paying as much as she can out of pocket for copays, deductibles and premiums to maintain insurance.

“My medical bills are at $52,000. I’ve done everything from credit cards to consolidation loans, I just keep simply paying one credit card with another interest-free one until I can pay the next one,” LeClair added. “It’s the side of cancer most people don’t understand or know about and it’s never-ending. It just keeps adding up and adding up and before you know it you’re back in debt that you can’t believe again.”

Bankruptcy can also make it difficult to find employment given that many employers will disqualify a candidate with a bankruptcy filing found from a background check.

According to a study published in February 2019, about 530,000 bankruptcies filed annually are because of debt accrued due to a medical illness. The study found that even the Obama administration’s landmark Affordable Care Act (known as Obamacare) has failed to change the proportion of bankruptcies caused by medical debts, with poor health insurance cited as one of the main culprits.

Republicans and Democrats are currently at loggerheads over Trump administration plans to further weaken Obamacare by making it easier for states to opt out of certain requirements and offer cheaper plans that could further exacerbate the situation. And health insurance has emerged as one of the signature issues of the 2020 election, and the fight for the Democratic presidential nomination with senators Bernie Sanders and Elizabeth Warren promising a total overhaul and Joe Biden and others pledging milder reforms. What all sides admit is that the current system is broken.

Senator Bernie Sanders holds up a vial of insulin as he talks about the high cost of healthcare in the US at a rally outside a pharmacy in Windsor, Ontario. Photograph: Rebecca Cook/Reuters

“Health insurance that we have today is a defective product,” said Dr David Himmelstein, distinguished professor of public health at City University of New York’s Hunter College and a lecturer in medicine at Harvard Medical School.

“A lot of people, a little over 60%, are filing bankruptcy at least in part because of medical bills. Most of them are insured. It’s clear that despite health insurance, there are many, many people incurring costs not being covered by their insurance,” said Himmelstein. “Medical debt is incredibly common, it’s the main cause of calls from collection agencies, and the vast majority of people with it have insurance,” said Himmelstein, lead author of the study Medical Bankruptcy: Still Common Despite the Affordable Care Act.

One out of every six Americans has an unpaid medical bill on their credit report, amounting to $81bn in debt nationwide, while about one in 12 Americans went without any medical insurance throughout 2018. Even as many Americans struggle to afford health insurance coverage in the first place, those that have it are not insulated from facing massive debt due to medical bills.

“I have insurance through my job but it has a high premium and high deductible. I have to pay $450 a month. When you think about living paycheck to paycheck, $450 is a lot of money. I’m barely making it. Some bills don’t get paid every month,” said Mary Cross of Detroit, Michigan, who has filed for bankruptcy twice since early 2013 when she was admitted to the hospital for pneumonia, required lung surgery and was diagnosed with sarcoidosis, an inflammatory disease.

“I’m currently struggling to stay afloat now due to having surgery this past January,” added Cross, 51. “I’ve been getting constant calls from the billing department at the hospital where I had surgery.”

In Savannah, Georgia, a 35-year-old man who requested to remain anonymous to avoid being associated with a bankruptcy, recently found himself homeless and jobless due to prolonged hospital stays and hundreds of thousands of dollars in medical debt.

A type 1 diabetic for years, he had to reduce his work hours for a cellular retail store when trouble regulating his blood sugar resulted in a toe amputation in April 2019.

“I had to cut my work hours so bills were harder to pay. But in July 2019 I was admitted to the hospital again and I was fired from my job because I was in the hospital. I lost my insurance. They amputated my leg, which means I still can’t work,” he said.

When he lost his job due to the prolonged hospital stay and leg amputation, his employer offered Cobra, a health insurance program for employees who lose their job or have a reduction in work hours, but he couldn’t afford it. He is currently working on trying to file bankruptcy to release the medical debt he’s accrued from amputations this year and he lost his house in October 2019 as a result.

“I have amassed over $400,000 in medical bills I need to pay, and still have at least six months before I get a disability hearing. So I owe over $400,000 in medical bills, have lost my house and I live on the street now, with no end in sight,” he said.

Jessica Hillman. Photograph: Courtesy the family

Just outside of Chicago, Illinois, Jessica Hillman filed for bankruptcy in 2016 due to medical debt accrued from battling a seizure disorder, despite having health insurance coverage for the majority of her treatment.

“I had thousands of dollars in various medical debt which made the majority of my claim. The last bill I got that really pushed me toward the bankruptcy was for a routine lab test that my insurance refused to approve because of a billing mistake. That bill was about a thousand dollars,” Hillman said. “I couldn’t work and had no way to pay these.”

At the time, Hillman was receiving several collection notices in the mail for past hospital stays and tests amounting to several thousand dollars, often having no knowledge of the bills that health insurance didn’t cover until receiving the collection notices.

“One of the biggest hurdles you face as a patient is just the sheer confusion of the process. You think you just show up and present your card, sometimes pay a copay, and that’s it. You don’t expect all these plan limitations and authorizations,” Hillman added. “What are you going to do if your authorization gets denied? You don’t really have a choice to not go get care. All these processes that are in the finest of fine print. And sometimes it feels like you are literally paying for nothing.”