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The impact of Obamacare on medical debt

A great deal of media attention is in place on the Trump administration's effort to repeal and replace the Affordable Care Act. Politicians and citizens alike tend to have very strong opinions on the matter, and health care is a topic that is heavily debated both in Washington homes and on Capitol Hill. One aspect of the ACA that is often overlooked, however, is the impact that Obamacare has had on medical debt. Recent research suggests that personal bankruptcy filings are down as a result of the ACA.

According to a study recently published by Consumer Reports, personal bankruptcy filings are down by nearly half in the years between 2005 and 2016. It must be noted that part of the reason for that decline lies in overall economic improvement and changes to bankruptcy law that made personal bankruptcy harder to file and more expensive. However, the fact that millions of Americans have access to health coverage has also played a role.

When an individual becomes injured or ill, medical debt quickly begins to pile up. Without proper insurance coverage, those financial obligations can soon become insurmountable. For individuals who were able to secure insurance with the Affordable Care Act, managing the cost of care has often been an easier hurdle to cross.

As debate continues to rage over how to find a health care solution to replace the ACA, many Washington residents will continue to struggle with existing medical debt. For some, personal bankruptcy is the fastest and most certain path toward debt relief. While legislative change could produce a health care option that is a good fit for many families, those changes could take years to come to fruition.

Source: latimes.com, "Another little-mentioned benefit of Obamacare: It has reduced medical bankruptcies", Michael Hiltzik, May 9, 2017

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