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Medical Debt Is Leaving Americans Bankrupt, Even with Health Insurance

The nation’s health care system has been a key topic in the 2020 election, with all sides agreeing that the system is broken. But a recent study reveals that simply having access to adequate healthcare isn’t the only issue. People are also facing bankruptcy due to mounting medical bills. 

“A lot of people, a little over 60%, are filing bankruptcy at least in part because of medical bills. Most of them are insured. It’s clear that despite health insurance, there are many, many people incurring costs not being covered by their insurance,” Hunter College Professor David Himmelstein told The Guardian.

Himmelstein and fellow Hunter College Professor Steffie Woolhandler worked with colleagues from the University of Illinois College of Law, the University of Idaho, and the Indiana University Maurer School of Law on the study, titled “Medical Bankruptcy: Still Common Despite the Affordable Care Act,” published in the American Journal of Public Health.

They found that many Americans have been forced to file for medical bankruptcy in recent years despite gains in coverage from the Affordable Care Act.

“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 (such as a home) to protect, and face particular difficulty in securing the legal help needed to navigate formal bankruptcy proceedings,” according to the study.

The authors sampled hundreds of court records of people who filed for U.S. bankruptcy from 2013 to 2016, and found that many suffer income loss as a result of illness, along with sky-high medical bills due to insurance policies.

“Medical costs continue to outpace incomes, 29 million remain uninsured, and many of those with health insurance face unpredictable and unaffordable out-of-pocket costs as copayments and deductibles ratchet up,” Himmelstein told The Guardian.

However, the researchers note that the Trump administration’s reform plan could only make things worse, leaving people unprotected and stripping away some of the ACA’s most beneficial components.

“Policymakers should move forward from the ACA and implement programs that guarantee coverage that is not just universal but also comprehensive, as well as sick leave and disability coverage that replaces income during illness,” the authors wrote. “Although death is inevitable, good public policy can ensure that financial suffering from illness is not.”

Beyond SUM

Explore This Work

Medical Bankruptcy: Still Common Despite the Affordable Care Act
American Journal of Public Health, 2019

Work By

David Himmelstein (Distinguished Professor at School of Urban Public Health at Hunter College, Urban Public Health) | Profile 1 | Profile 2
Steffie Woolhandler (Distinguished Professor at School of Urban Public Health at Hunter College, Urban Public Health) | Profile 1 | Profile 2

Colleges and Schools

Hunter College