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Michael D. Hart, P.C.
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Medical debt still driving bankruptcy despite ACA

Spiraling health care costs and the overwhelming debt to which it can condemn families been a problem in the United States for many years, and Congress took action to address the issue by passing the Affordable Care Act in 2010. However, a recent study published in the American Journal of Public Health suggests that the landmark legislation has not had the desired effect. In the first major study of its kind since the ACA became the law of the land, researchers discovered that medical debt still plays a role in about two-thirds of the personal bankruptcies filed in Virginia and around the country.

The research team, which included academics, doctors and attorneys, studied personal bankruptcy cases filed between 2013 and 2016. After selecting 910 petitions using a random selection process, they looked to see if medical debt or lost income caused by some sort of health care emergency had been the catalyst for financial misfortune.

The researchers found no evidence of a reduction in bankruptcy filings caused by medical debt since the passage of the ACA. In fact, they discovered that the problem seems to be getting worse. When the ACA was passed in 2010, 65.5 percent of bankruptcies involved medical debt. The recently published study suggests that this figure has now climbed to 67.5 percent.

Struggling with unmanageable debt is often made almost unbearable by daily harassment from creditors and bill collectors, but many people in such situations are reluctant to take action. Attorneys with experience in this area could dispel the many myths there are about bankruptcy and explain how filing a Chapter 7 bankruptcy petition offers an escape from overwhelming debt as well as the possibility of a fresh start. They could also point out that the automatic stay issued when a bankruptcy is filed puts an end to debt-related litigation and bill collector harassment.

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