State-Mandated Disability Insurance as Salve to the Consumer Bankruptcy Imbroglio

By Allen, Alena | Brigham Young University Law Review, September 1, 2011 | Go to article overview

State-Mandated Disability Insurance as Salve to the Consumer Bankruptcy Imbroglio


Allen, Alena, Brigham Young University Law Review


From Main Street to Wall Street, Americans are hurting. In 2009, over 1.4 million families filed for bankruptcy. Researchers examining the causes of bankruptcy discovered that as many as sixty-two percent of all bankruptcies were precipitated by a medical crisis. Because many Americans are living paycheck to paycheck and lack disability insurance, when a medical crisis strikes, bank accounts are quickly depleted by the amalgam of high medical bills and lost wages. Disability insurance provides needed wage replacement when a worker is unable to work due to an illness or injury. This Article presents the case for state-mandated disability insurance as a solution for combating the rising number of consumer bankruptcies. It describes the prevalence of medical bankruptcies and the impact of disabilities on American families as well as the most commonly available substitutes for comprehensive disability insurance and explains why these substitutes do not provide workers with adequate wage protection. Then, this Article presents state-mandated disability insurance as a solution to the medical bankruptcy imbroglio and provides statistical evidence demonstrating that states mandating disability insurance for most workers have on average a lower per capita bankruptcy rate than the national average. Finally, this Article argues that the best alternative for increasing access to disability insurance is for more states to mandate disability insurance, and provides a blueprint for designing state disability insurance programs.

TABLE OF CONTENTS

I. INTRODUCTION .................................................................... 1329

IL THE MEDICAL BANKRUPTCY IMBROGLIO ............................ 1333

III. THE DISABILITY IMBROGLIO .............................................. 1338

IV. SUBSTITUTES FOR DISABILITY INSURANCE ......................... 1347

A. Comprehensive Health Care: An Inadequate Solution 1347

B. Social Security Benefits: An Inadequate Solution ........ 1354

C. Workers' Compensation: An Inadequate Solution ...... 1355

D. Retirement Plans: An Inadequate Solution ................. 1356

V. A SOLUTION TO THE MEDICAL BANKRUPTCY AND DISABILITY IMBROGLIOS ................................................ 1358

VI. POLICY RECOMMENDATIONS TO REDUCE THE MEDICAL BANKRUPTCY IMBROGLIO .............................................. 1361

A. Existing State-Mandated Disability Insurance Programs: A Better Solution ..................................... 1361

1. Funding ............................................................... 1361

2. Benefits ................................................................ 1362

B. Blueprint for New State-Mandated Disability Plans: An Ideal Solution .......................................................... 1366

1. Coverage .............................................................. 1366

2. Funding ............................................................... 1367

3. Plan Administration ............................................. 1368

VII. CONCLUSION .................................................................... 1370

I. Introduction

A record 2.8 million American families received a foreclosure notice in 2009, 1 and over 1.4 million families filed for bankruptcy.2 Over 7.2 million jobs have been lost since the beginning of the Great Recession in 2007,3 and roughly 15.4 million Americans are unemployed.4 As startling as those statistics are, it is even more surprising that many American families report that it is not getting laid off from a job or having to downsize in the wake of a divorce that pushes them to brink of financial ruin; rather, it is a medical crisis.5

Clearly, this phenomenon has not happened overnight. The American family has been struggling for years. Over the past two decades, an increasing portion of Americans have filed for bankruptcy. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

State-Mandated Disability Insurance as Salve to the Consumer Bankruptcy Imbroglio
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.