Obamacare May Reduce Some Large Medical Bills, But Not Everybody Can Be Protected

A Harvard study published in 2005 found that nearly two-thirds of bankruptcies were linked to illnesses and medical bills. "The cost of health care now causes a bankruptcy in America every 30 seconds," President Obama told a March 2009 summit that marked the starting point for the Patient Care and Affordable Care Act (ACA), commonly referred to as Obamacare. "By the end of the year, it could cause 1.5 million Americans to lose their homes."

The US Supreme Court's decision to uphold the constitutionality of the health reform bill has given many families hope that they will not find themselves going bankrupt because of medical bills. However, a Salt Lake Tribune story published on October 22, 2012, noted that "the pioneering reform law in Massachusetts upon which federal reform was built may have kept debt in check, but it hasn't solved it." The Tribune reported that two surveys have shown no significant change in the percentage of residents struggling with medical debt.

Mark Rukavina, a former consumer advocate and founder of a hospital advisory group, Community Health Advisors in Massachusetts, told the Tribune that medical debt is a problem that affects everyone but the extremely wealthy, and it is a matter of bad luck for the people who incur it. "Health reform will probably succeed at reducing many of the large bills," Rukavina told the Tribune. "But there will still be out-of-pocket costs that eat into people's budgets."

Mark Rieger, a vice president at Gateway EDI, a St. Louis-based company that sells software to help doctors better manage their bills, told the Tribune that it used to be that no more than 9 to 10 percent of a physician's income came directly from patients. In some parts of the country, that figure is now close to 20 to 30 percent. However, Rieger told the tribune that health care providers "are only about 50 to 60 percent successful on collecting on patient responsibility." This has led to more clinics and hospitals becoming "less tolerant of past-due balances."

Many ACA provisions will not go into effect until 2014, but you should take action now if your family is struggling because of medical expenses. If you file Chapter 7 bankruptcy, it is possible to wipe out your medical bills in a matter of months. If you enter a Chapter 13 repayment plan, you may be able to have your medical debt discharged without having to pay the full amount. If you want to know which option would work best for you, contact our firm at (866) 930-7482 or complete the form on this page to see how our Chicago bankruptcy lawyers can help.

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