Last updated on: 6/5/2015 | Author:

Has Obamacare Significantly Reduced the Risk of Medical Bankruptcy? – DEBATED

PRO (yes)


The National Patient Advocate Foundation, in its Sep. 2012 white paper, “Issue Brief: Medical Debt, Medical Bankruptcy and the Impact on Patients,” available at, stated:

“When the Patient Protection and Affordable Care Act (PPACA) was signed into law in March 2010 and the Supreme Court of the United States subsequently upheld the constitutionality of the individual mandate, millions of previously uninsured Americans were given a new pathway to access quality, affordable health insurance coverage. The PPACA also included important coverage provisions designed to safeguard all Americans from medical debt crisis and medical expense-related bankruptcy, including the elimination of annual and lifetime limits on coverage and caps on out-of-pocket spending. These key provisions, many of which will be implemented in 2014, will assist patients who are at risk of experiencing a medical debt crisis that could threaten their ability to access care and could result in medical expense-related bankruptcy.”


Cathy Sparkman, JD, Director of Government Affairs for the Association of Surgical Technologists, wrote in the May 2010 issue of Surgical Technologist:

“[PPACA] makes premium tax credits available through the Exchange to ensure people can obtain affordable coverage. Credits will be available for people with incomes above Medicaid eligibility and below 400 percent of poverty who are not eligible for or offered other acceptable coverage. Tax credits will apply to premiums and cost-sharing to ensure protection against bankruptcy due to medical expenses. Effective 2014.”


Harry Reid, JD, US Senate Majority Leader (D-NV), stated in his May 15, 2013 press release “Remarks on House Republican’s 37th Vote to Repeal Obamacare,” available at his website:

“Thanks to the Affordable Care Act, insurance companies can no longer set arbitrary lifetime caps on benefits, putting millions of Americans one car accident or heart attack away from bankruptcy.”


The American Association of People with Disabilities (AAPD) stated, in an Aug. 17, 2012 article written by then-AAPD President and CEO Mark Perriello, titled “The Affordable Care Act Means That a Medical Diagnosis Like MS Is Not a Precursor to Bankruptcy,” available at

“Believe it or not, even some with health insurance have fallen into bankruptcy over medical bills. That’s because before the Affordable Care Act (ACA) passed, insurance companies could drop people with disabilities and chronic illnesses from coverage. They could also impose ‘lifetime caps’ on people with MS, cancer, or other illnesses—that means that they could stop paying medical expenses for an insured person who continues to pay premiums and is still ill…

The added risk of bankruptcy is something that [no] family should have to endure. That’s one of the many reasons AAPD supports the Affordable Care Act, and why we will continue to do all we can to preserve this law.”

CON (no)


Christina LaMontagne, MBA, Vice President of Health at NerdWallet, a financial services comparison website, stated in her Mar. 26, 2014 article titled “NerdWallet Health Finds Medical Bankruptcy Accounts for Majority of Personal Bankruptcies,” available at the NerdWallet website:

“In 2013 over 20% of American adults are struggling to pay their medical bills, and three in five bankruptcies will be due to medical bills. While we are quick to blame debt on poor savings and bad spending habits, our study emphasizes the burden of health costs causing widespread indebtedness. Medical bills can completely overwhelm a family when illness strikes…

Insurance [through Obamacare] is no silver bullet. Even with insurance coverage, we expect 10 million Americans will face bills they are unable to pay.”


Megan McArdle, MBA, economics and government policy journalist, in her Sep. 27, 2013 Bloomberg article, “11 Pieces of Obamacare Conventional Wisdom That Shouldn’t Be so Conventional,” available at the Bloomberg website, wrote:

“I think medical bankruptcy is real. But it’s complicated, because people who have really severe medical problems often also have really severe income loss, which gives them a really severe mismatch between their debt payments and their ready funds. Getting rid of the medical bills helps — I don’t trust that latest study any more than the earlier ones — but while I expect that Obamacare will somewhat reduce the number of people who end up in bankruptcy after a major illness, you’ll still have a lot of sick people who end up bankrupt as well as ill. Canada still has Medical bankruptcies, despite a very comprehensive single-payer system.”


Don McCanne, MD, Senior Health Policy Fellow for Physicians for a National Health Program, in a Mar. 8, 2011 comment on a Mar. 2011 American Journal of Medicine article, “Reform in Massachusetts Fails to Reduce Medical Bankruptcies,” available at, stated:

“Even with subsidies, insurance premiums are ever less affordable, and for those who need health care, out-of-pocket spending creates significant financial hardships. Since reform under the Affordable Care Act closely mirrors that of Massachusetts, their current experience with medical bankruptcy portends the future of medical bankruptcy throughout the United States.

The Massachusetts experience shows that merely providing insurance coverage to the majority of the population is not enough. The quality of the insurance coverage is crucial. In 2009, 89% of Massachusetts debtors and all their dependents had health insurance at the time of filing, yet the insurance was not effective in reducing the rate of medical bankruptcy below levels that already existed before the full implementation of the Massachusetts health reform program.”


Ryan Sugden, JD, stated in his July 14, 2012 article “Sick and (Still) Broke: Why the Affordable Care Act Won’t End Medical Bankruptcy,” available at the Washington University School of Law website:

“In effect, by eschewing comprehensive, single-payer universal health insurance and leaving virtually untouched the fundamental structure of our country’s private health insurance industry, the Affordable Care Act has guaranteed that even medically insured individuals will continue to be on the hook for thousands of dollars of medical expenses…

Because the Affordable Care Act retains the ‘competitive’ private structure of the health care industry, an industry that increasingly relies on consumer sensitivity to out-of-pocket expenses, the Affordable Care Act cannot and will not completely eliminate medical bankruptcy.”