Research suggests Obamacare could decrease bankruptcy filings based on medical debt.
This summer, the Supreme Court rejected a challenge to the Affordable Care Act, aka Obamacare, in an move that has many convinced the universal healthcare program is now here to stay.
So what will the availability of Obamacare mean for personal finance, and for personal bankruptcy? According to one law professor, things should play out similarly to what happened in Massachusetts after the implementation of that state’s mandatory health insurance program.
In a study published last year, Northeastern University law professor Daniel Austin analyzed personal bankruptcy filings in the state of Massachusetts between 2005 (the year when the state’s healthcare program was passed) and 2013. He discovered that, on average, the typical bankruptcy filer in Massachusetts was burdened with far less medical debt than filers in the rest of the country.
Specifically, Austin found that in 2013 the average medical debt for a Massachusetts individual or couple filing for bankruptcy was $3,041. During that same year, the average medical debt for filers nationwide was $8,594.
Though President Obama may have overstated the number of Americans filing for bankruptcy specifically because of medical debt (as opposed to those where medical debt is just one of many types of debts needing relief), plenty of studies agree that medical debt is a problem for Americans. In his 2009 state of the union address, Obama stated that 62 percent of consumer bankruptcies were medical bankruptcies. Austin found the figure to be closer to 25 percent.
Except in Massachusetts. There, only 9 percent of bankruptcies were directly caused by medical debt.
The professor absolutely believes that by helping to reduce the costs of medical care for the average consumer, Obamacare can and will reduce the rate of personal bankruptcies based on medical debt across the country, just has Massachusetts’ program has reduced filings in that state.
What If You Have Medical Debt Right Now?
Of course, if you are already facing overwhelming medical debt, or if high insurance premiums have forced you to carry more credit card debt to cover your daily living expenses, you are not going to care much what some professor’s study has to say. You need help now! The good news is, you can get it at California Bankruptcy Relief. Contact us today to schedule a consultation with an experienced bankruptcy attorney and learn about your options for finding relief from your debt.
