Steven J. Richardson
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Bankruptcy, Collections, Student Loan, DUI and Traffic Court attorney in Woodbury, NJ.

The Affordable Care Act (or ObamaCare) has been in the news quite a lot lately as the government rolls out a program aimed at protecting Americans from devastating debt from the cost of healthcare.  People should not have to go bankrupt or have their lives ruined because of an unexpected illness or injury.  But will that happen?

In 2005, at the time the bankruptcy code was revised to prevent bankruptcy abuse (supposedly by folks irresponsibly running up debt and then filing to get rid of it), most bankruptcies were being driven by medical debt.

Now, you would think that ObamaCare would help thereby making sure that everyone has health insurance coverage.  But the sad truth is that those filers with medical debt had health insurance! They just couldn’t handle all the copays and deductibles.

What we are starting to find out now is that the law seems to have concentrated quite a bit on the “affordable” part of the law, and not so much the coverage part.  The cheaper policies are coming with higher deductibles and copays in an effort to keep the premiums down.

This then begs the question of whether ObamaCare will truly lower the number of bankruptcy filings due to medical bills if the copays and deductibles still remain out of control.  It is possible.  As Kevin Gipson points out in his post on the Bankruptcy Law Network,

"Research conducted by Physicians for a National Health Program following the passage of Romneycare in Massachusetts in 2009, found that about 52 percent of consumers that had filed for bankruptcy listed medical bills as a factor that caused them to have to file for bankruptcy. In 2007, two years before, the number was closer to 59 percent.”

However, when you look at the study, the conclusion reached was that

"Massachusetts’ health reform has not decreased the number of medical bankruptcies, although the medical bankruptcy rate in the state was lower than the national rate both before and after the reform.”

Only time will tell whether ObamaCare will reduce bankruptcy filings, but if RomneyCare in Massachusetts is any indication, it probably won't.  But what do you think?  Do you think that the Affordable Care Act will significantly lessen financial stress for Americans and thus lower the bankruptcy filing rate further?  Let me know in the comments!


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