Barack Obama's Affordable Care Act could bring about a dramatic change in the area of personal bankruptcy in the country, according to a study published by Northeastern University law professor Daniel Austin. According to Austin, residents of Massachusetts, a state that has had mandatory health insurance for its citizens since 2005 have, on an average, close to $5000 less medical debt than people elsewhere in the country. Austin's study found that people of Massachusetts had an average of $3041 in medical debt. In comparison, the figure lay close to $8594 across the country.
Typically, medical debt is not an issue only faced by poor Americans. According to Michael Doan, a senior Californian attorney and owner of Doan Law Firm, medical debts fall in a grey area between consumer and non-consumer debt. So depending on circumstances, if the debtor is able to justify that at least half of what they owe is non-consumer debt, they would be eligible for chapter 7 relief.
The latest health care reforms are likely to assist a lot of individuals from filing for bankruptcy. In his 2009 State of the Union Address, President Obama stated that high medical costs are causing a bankruptcy in America every thirty seconds. In other words, nearly 62.1% of consumer bankruptcies filed across the country are due to medical debts.
Professor Austin's study however puts a less-alarming figure on medical debt. His study of nearly 5400 bankruptcy cases filed between 2005 and 2013 concludes that between 18% to 26% of consumer bankruptcies filed in the United States are following medical debts. This however does not refute the benefits of the health reforms as espoused by the American President. Professor Austin claims that in the state of Massachusetts, the percentage of medical bankruptcies is just between 3% to 9%, a far improved rate compared to the figure from the rest of the country.
The Northeastern University study underlines the positive ramifications of the health reform law that had been a topic of intense debate in recent times. Earlier this year, the United States Supreme Court gave its nod of approval to the controversial reform. With all states in the country adopting the new health reform laws, Professor Austin believes that the percentage of medical bankruptcies shall be far lower in the coming years.
Early studies already point towards a dramatic improvement in the affordability of healthcare in the United States. A study conducted by Dr. Benjamin Sommers, a health economist with the Harvard's TH Chan School of Public Health shows that close to 16 million adults have benefitted from health coverage since the law came into being. He says that the country has seen the largest drop in uninsured rate in almost four decades since the passing of the law five years ago. Some of the findings from this study are:
• 7 million more adults (3.5%) now have access to a personal physician
• 5 million more adults (2%) now have easy access to medicines
• 11 million more adults (5.5%) now find health care for family affordable
• 7 million more adults (3.5%) now describe themselves in excellent, very good or good health
• 12% Hispanics, 11% blacks and 6% whites report that they are no longer uninsured
• Patients with chronic ailments like diabetes, cancer and heart diseases have reported greater improvement in self-reported health and reduction in limitations in daily activities arising out of their health issues.