En route to work today, I passed one of the well-known images of Los Angeles’ homeless population: a shopping cart laden with plastic bags, all of them taut with collected items and tied to every available inch of space.  It was yet another reminder of our failing economy and our ever-growing dilemma of homelessness.

Last year, I worked with 14 local nonprofits to put on Project Homeless Connect, an event that started in 2004 under Gavin Newsom’s administration in San Francisco. In preparation for the event, I studied up on homelessness and learned alarming statistics about the “face” of homelessness.  As I passed the shopping cart today, naturally, I thought: does that cart belong to a veteran (who make up 1 in 4 of our homeless populations, though only 11% of our general population)? Does the owner of that cart suffer mental illness?

Today I learned of yet another unsettling detail of people in financial despair, a fact that screams for health care reform in the U.S.:  nearly two-thirds of people who filed for bankruptcy protection in 2007 cited illness and medical bills to be, at least in part, what led to their financial collapse. Even more surprising, 77.9 percent of those who bankrupted due to illness and its accompanying expenses had private insurance when their illness first began. I thought private insurance was designed to prevent medical bills from breaking the bank…?

Researchers from Harvard University’s Law and Medical Schools called those who had reported illness as a contributing factor to get more information. Illness had cost four out of every ten families at least two weeks of wages. Thirty-five percent of those surveyed had spent more than five grand or 10 percent of their income on medical bills that weren’t covered by insurance.

Many private insurance plans are loaded with deductibles and co-payments, leading Cambridge, Massachusetts physician Steffie Woolhandler to dub them “umbrella[s] that melt in the rain.” Many people underestimate what costs they will eventually pay out of pocket because they are led to believe that private insurance will cover their needs.

Today’s economy has launched levels of “medical bankruptcy” to figures totaling about 1.5 million cases annually (and that information was collected before the economy really bottomed out). And, as is often the case with people who find themselves homeless, one problem leads to another.  About two-thirds who filed medical bankruptcy were homeowners, and three-fifths had gone to college.  But the first blow of medical bills led to a domino effect: they got sick, they missed work, and then they lost their jobs. The ultimate paradox is that losing a job also means losing insurance, leaving people broke and in debt, and sometimes even homeless.

It’s a scary, unsettling, and necessary reminder that any one of us could find ourselves there. Beth’s Story, which we released in conjunction with the release of The Soloist, is a case in point.