Medical debt a factor in two-thirds of bankruptcies in survey

Bankruptcy linked to medical debt remains common despite passage of the ACA, with two-thirds of debtor respondents citing it as contributing to their filing, a study published Feb. 6 in the American Journal of Public Health found.

The study, conducted by two physicians, two attorneys and a sociologist from the Consumer Bankruptcy Project, surveyed 910 people in the U.S. who filed for personal bankruptcy between 2013 and 2016. Researchers abstracted the filers' court record data and mailed a questionnaire to them.

More than half of respondents (58.5 percent) "very much" or "somewhat" agreed that medical expenses contributed to their bankruptcy, and 44.3 percent cited illness-related work loss as a contributor. Two-thirds of respondents (66.5 percent) cited at least one of those two medical reasons, which researchers said represents about 530,000 medical bankruptcies annually.

The study also found that medical bankruptcies remain common after the ACA. Before the health law's Jan. 1, 2014 implementation, 65.5 percent of debtors cited a medical contributor to their filing, compared to 67.5 percent after implementation. Researchers also noted they did not find different trends between states that expanded Medicaid under the ACA and states that did not.   

Researchers said medical debtors were more likely than other respondents to live with a spouse or partner but had similar likelihood of being uninsured. Additionally, they noted medical debtors also more frequently self-reported fair or poor health, foregoing necessary medical care in the two years before filing and foregoing needed medicine.

"Despite gains in coverage and access to care from the ACA, our findings suggest that it did not change the proportion of bankruptcies with medical causes," the study authors conclude. "That's not surprising because the chronically poor — the group most affected by the ACA's coverage expansion — have reduced access to credit, have few assets to protect and face particular difficulty in securing the legal help needed to navigate formal bankruptcy proceedings."


More articles on healthcare finance: 

Mississippi lawmakers dodge action on surprise billing remedy
Task force offers tool to assess potential value-based care partners
Senators ask insurers, providers for data on surprise billing

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