Debt relief in the form of healthcare reform

No doubt, the passage of the Affordable Care Act (ACA) has garnered a great deal of approval and criticism from residents throughout Fort Lauderdale, Florida, and beyond. Families around the country are weighing their healthcare options and deciding on which plans best suit their specific medical needs and finances. And while politics tend to dominate conversations about ACA, the findings of a new study suggest that the ACA may help thousands of Americans avoid filing Chapter 7 bankruptcy.

Not only is excessive medical debt the primary cause of personal bankruptcy in the United States, but the U. S. is also the only developed nation in the entire world to make that claim. According to the Commonwealth Fund, a little over 40 percent of adult Americans questioned confirmed that they had difficulties covering their medical costs in 2007. That is why the findings of a study conducted by the Federal Reserve Bank of Chicago are so encouraging.

Healthcare reform passed by the state of Massachusetts served as the basis for the federal ACA, and was the focus of a recent survey investigating the effect of healthcare reform on bankruptcy rates. According to the study, the number of personal bankruptcies filed in Massachusetts since the passage of the state’s healthcare reform has declined by approximately 20 percent.

While several factors likely play a role, it’s believed that the cap placed on out-of-pocket costs by state and federal healthcare reform has a positive effect on personal finances. Researchers also found that overall personal debt and credit ratings improved with healthcare reform.

Source: Huffington Post, “New Fed Study Says Health Reform Can Reduce Financial Stress, Bankruptcies,” Wendell Potter, Feb. 24, 2014