Summary: “As legislators and the executive branch renew their efforts to repeal and replace the Affordable Care Act this week, they might want to keep in mind a little-known financial consequence of the ACA: Since its adoption, far fewer Americans have taken the extreme step of filing for personal bankruptcy,” Allen St. John writes over at Consumer Reports. “Filings have dropped about 50 percent, from 1,536,799 in 2010 to 770,846 in 2016 (see chart, below). Those years also represent the time frame when the ACA took effect. Although courts never ask people to declare why they’re filing, many bankruptcy and legal experts agree that medical bills had been a leading cause of personal bankruptcy before public healthcare coverage expanded under the ACA. Unlike other causes of debt, medical bills are often unexpected, involuntary, and large. “If you’re uninsured or underinsured, you can run up a huge debt in a short period of time,” says Lois Lupica, a bankruptcy expert and Maine Law Foundation Professor of Law at the University of Maine School of Law. So did the rise of the ACA—which helped some 20 million more Americans get health insurance—cause the decline in bankruptcies? The many experts we interviewed also pointed to two other contributing factors: an improving economy and changes to bankruptcy laws in 2005 that made it more difficult and costly to file. However, they almost all agreed that expanded health coverage played a major role in the marked, recent decline. Allen St. John, “Affordable Care Act Drove Down Personal Bankruptcy,” Consumer Reports.
Jeanne Pinder is the founder and CEO of ClearHealthCosts. She worked at The New York Times for almost 25 years as a reporter, editor and human resources executive, then volunteered for a buyout and founded ClearHealthCosts.
She was previously a fellow at the Tow Center for Digital Journalism at the Columbia University School of Journalism. ClearHealthCosts has won grants from the Tow-Knight Center for Entrepreneurial Journalism at the Craig Newmark Graduate School of Journalism at the City University of New York; the International Women’s Media Foundation; the John S. and James L. Knight Foundation with KQED public radio in San Francisco and KPCC in Los Angeles; the Lenfest Foundation in Philadelphia for a partnership with The Philadelphia Inquirer; and the New York State Health Foundation for a partnership with WNYC public radio/Gothamist in New York; and other honors.
Her TED talk about fixing health costs has surpassed 2 million views.