The Affordable Care Act was among the likely factors that assisted with a big decrease — nearly 50 percent — in personal bankruptcy filings over the last six years, according to a Consumer Reports analysis, MarketWatch reported yesterday. Other factors, including new bankruptcy laws, a rebounding economy and tighter credit requirements, also likely helped with the reduction, with filings dropping from 1.54 million in 2010 to 770,846 last year. There’s no way to know what made the biggest difference in that drop, since those filing for personal bankruptcy do not state a specific reason for it. Still, the health care law in all likelihood played a major role. Richard Gaudreau, a consumer bankruptcy lawyer in New Hampshire, says he sees far fewer clients who do not have health insurance now. “I think before the ACA there were a lot of medically-driven costs” in personal bankruptcies, he said. Medical bills, which are famously costly and unpredictable, in the past have been estimated as the leading cause of bankruptcy filings. Other reasons include a lost job, reduced income and divorce, Gaudreau said. Yet even if the health care law has contributed to a decline in personal bankruptcies, there is still evidence of its financial difficulties. Health care premiums have gone up substantially in certain areas, and the high-deductible plans expose those on them to large out-of-pocket expenses. Moreover, it’s possible premiums could increase even more next year.
Click here to read the Consumer Reports study.
