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Medical debt still driving factor in personal bankruptcy

On Behalf of | Feb 13, 2019 | Chapter 13 Bankruptcy, Firm News

Getting sick is one of those facts of life that most people in Florida will have to deal with. Unfortunately, so are medical bills. Despite efforts by lawmakers, medical bills are still an enormous burden to the average person and are a significant contributor to personal bankruptcy filings.

Lawmakers passed the Affordable Care Act in 2010. Aimed at reducing the burden of a for-profit health care system, experts generally expected that fewer people would need to seek debt relief for medical bills. The Consumer Bankruptcy Project recently looked at bankruptcies that were filed from 2013 to 2016 and came to a disappointing conclusion — the ACA did not seem to impact the rate of bankruptcy filings caused by medical debts.

Medical debt is the main driving factor in approximately 66 percent of bankruptcies, which is similar to the rate before the passing of the ACA. The lead author of the CBP study pointed out that even those with seemingly good insurance plans are only a single medical emergency away from a difficult position. This is because most middle-class Americans covered by employer-based health insurance are on plans that have many loopholes, making it easy for insurance companies to deny payment. Patients also usually have to shell out significant amounts for co-pays and deductibles before insurance even kicks in.

No one should have to go into insurmountable amounts of debt just because they fall sick. Sadly, this is the current reality for many people in Florida, even those who have health insurance. When medical debt becomes too much to handle, personal bankruptcy is often an effective way to address the issue.

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