Obamacare credited with reducing bankruptcy rates

Personal bankruptcy has dropped 50 percent in 6 years

SAN ANTONIO – Illnesses and medical bills can lead to a financial nightmare. The accumulated debt has driven some to the extreme step of filing for bankruptcy.

As the Senate works to repeal and replace the Affordable Care Act, commonly referred as Obamacare, Katie Weber is paying close attention. Weber is battling cancer and said her expensive treatments would have bankrupted her, if not for the  financial protections of the law.

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In the past six years, there has been a major decline – almost 50 percent – in personal bankruptcy filings.

A recent Consumer Report analysis found the ACA is a major reason for the decline.

"I don’t know how many MRIs I’ve had, but in the dozens, for sure," Weber said.

Courts don't ask people why they are filing, but many bankruptcy experts said medical bills have been a leading cause of personal bankruptcy.

“Medical bills are often unexpected and unavoidable,” Allen St. John, with Consumer Reports, said. “People who don’t have insurance can run up massive debt in a relatively short amount of time."


While there has been a drastic drop in personal bankruptcy filings, experts point to other factors including an improved economy as well as laws that make it more difficult to declare bankruptcy. But, they said expanded health insurance has been a major driver of the decline.

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"Our reporting found that coverage for pre-existing conditions and also a ban on lifetime limits were really important because it prevented people with serious medical issues from having to file bankruptcy," St. John said.

Weber said she hopes those safeguards remain part of any new health care reform.

"Even if I get better, when I get better, the follow-up will be continuous," she said.


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