Healthcare reform may not reduce number of medical bankruptcies

If Massachusetts’ experience with healthcare reform is any guide, national reform won’t greatly reduce the number of your patients forced into bankruptcy because of their medical bills.

In 2006, Massachusetts became the first state to pass healthcare reform, and its law served as a model for the federal bill passed last year. Supporters said the national Affordable Care Act would result in fewer medical bankruptcies, but that hasn’t been the case in the Bay State, according to a study in this week’s American Journal of Medicine.

The number of medical bankruptcy filings in Massachusetts actually rose from 7,504 in 2007 to 10,093 in 2009, although the share of personal bankruptcies in that state with a medical cause declined from 59.3% to 52.9%, the study found.

Skimpy coverage could be to blame, the study’s authors conclude. “Massachusetts' health reform, like the national law modeled after it, takes many of the uninsured and makes them underinsured, typically giving them a skimpy, defective private policy that's like an umbrella that melts in the rain: the protection’s not there when you need it,” writes lead author David Himmelstein, MD, formerly of Harvard Medical School and now a professor of public health at City University of New York.

In 2007, the last year for which national figures are available, medical issues contributed to 62.1% of personal bankruptcies nationally, according to a 2009 study by the same group of researchers. That report found that 77.9% of those bankrupted were insured at the start of their illness.