Mass. Health Reform Hasn't Halted Medical Bankruptcies

TUESDAY March 8, 2011 -- The percentage of personal bankruptcies caused by medical bills or personal illness has changed only slightly since Massachusetts began requiring people to buy health insurance in 2006, a new study finds.

The finding challenges the Obama administration's claim that medical bankruptcies will decline under the new U.S. health care law, which is largely patterned after the Massachusetts law, according to the Harvard University researchers.

They found that the proportion of bankruptcies in Massachusetts that were medical-related dropped from 59.3 percent to 52.9 percent between early 2007 and mid-2009. This 6.4 percent decrease is non-significant, according to the study authors.

They also found that the actual number of medical bankruptcy filings in the state rose from 7,504 in 2007 to 10,093 in 2009.

"Health costs in the state have risen sharply since reform was enacted. Even before the changes in health care laws, most medical bankruptcies in Massachusetts -- as in other states -- afflicted middle-class families with health insurance. High premium costs and gaps in coverage -- co-payments, deductibles and uncovered services -- often left insured families liable for substantial out-of-pocket costs. None of that changed. For example, under Massachusetts' reform, the least expensive individual coverage available to a 56-year-old Bostonian carries a premium of $5,616, a deductible of $2,000, and covers only 80 percent of the next $15,000 in costs for covered services," the researchers wrote.

"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," lead author Dr. David Himmelstein said in a Physicians for National Health Reform news release.

He was an associate professor of medicine at Harvard Medical School when he conducted the research and is now professor of public health at City University of New York.

The study is published March 8 in the American Journal of Medicine.

More information

The U.S. Agency for Healthcare Research and Quality has more about health insurance.

Posted: March 2011


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