A new study shows how the Affordable Care Act (ACA) has failed to solve one of the major crises in the American for-profit health insurance system that it was supposed to help eradicate: bankruptcies related to high medical bills and other healthcare-related costs.
The Consumer Bankruptcy Project (CBP) examined 910 bankruptcies that were filed between 2013 and 2016 and found that, similarly to before the ACA was passed in 2010, 66.5 percent of the bankruptcies were brought about by medical bills families were unable to afford or income loss due to illnesses.
About 530,000 American households continue to see their finances wiped out each year due to medical costs, according to the report, which was published in the American Journal of Public Health.
“Unless you’re Bill Gates, you’re just one serious illness away from bankruptcy,” said Dr. David Himmelstein, the study’s lead author. “For middle-class Americans, health insurance offers little protection. Most of us have policies with so many loopholes, copayments, and deductibles that illness can put you in the poorhouse. And even the best job-based health insurance often vanishes when prolonged illness causes job loss — just when families need it most.”
The only solution to medical bankruptcies is a Medicare for All system, said Physicians for a National Health Plan (PNHP), one of several national organizations that have led the fight for universal, government-funded healthcare for decades.
“The ACA was a step forward, but 29 million remain uncovered, and the epidemic of under-insurance is out of control,” said Dr. Steffie Woolhandler, a member of PNHP’s Board of Directors, in a statement. “We need to move ahead from the ACA to a single-payer, Medicare for All system that assures first-dollar coverage for everyone.”
The study came out a day after the Commonwealth Fund released its own findings on the post-ACA healthcare system — namely, that more Americans with employer-based healthcare plans are under-insured, without continuous coverage all year, than were before the law was passed.
Medical bills contributed to about 58 percent of bankruptcies between 2013 and 2016, while income loss due to illnesses or injuries were to blame for about 44 percent; many bankruptcy filers cited both as causes. The study’s results were “virtually unchanged” from a similar report the CBP compiled from 2001 to 2007, PNHP said.
The report “found no evidence that the ACA reduced the proportion of bankruptcies driven by medical problems: 65.5 percent of debtors cited a medical contributor to their bankruptcy in the period prior to the ACA’s implementation as compared to 67.5 percent in the three years after the law came into effect,” PNHP said in a statement.
On social media, PNHP pointed out that the high prevalence of medical cost-related bankruptcies was often cited as a reason to urgently pass the ACA during congressional debates over the the law in 2010.
President Obama often talked about reducing medical bankruptcies as one of the goals of the Affordable Care Act. https://t.co/sLqwMWFrsS pic.twitter.com/L5vPrwgg4O
— Margot Sanger-Katz (@sangerkatz) February 7, 2019
Lawmakers cited medical bankruptcy when passing the ACA, but new @AMJPublicHealth research finds that the problem persists. 2/3 of bankruptcy filers cite illness and medical bills as contributing factors. We need *real* financial protection. #SinglePayer https://t.co/vpJUKiIdAj
— PNHP (@PNHP) February 7, 2019
Medicaid expansion under the ACA also did not improve the number of medical-related bankruptcies, the report showed, with people filing even in states that expanded the program. Middle-class households made up most of the filers, owing to skyrocketing premiums and copays for many.
On PNHP’s Twitter feed, one user shared a firsthand account of how the ACA has made health coverage more expensive for many American families — and thus put just as many people at risk for medical bankruptcy as there were before the law was passed.
I’m self employed. The ACA initially doubled our insurance cost (we’re Family Glitch victims), then tripled it. Last three years I’ve been uninsured because it is completely unaffordable. We, everyone needs #SinglePayer #MedicareForAll @AllOnMedicare @KamalaHarris @BernieSanders
— Charles DeAnt (@CharlesDeAnt) February 7, 2019
The ACA has also been left vulnerable to attacks from President Donald Trump and the Republican Party due to its high costs for families, noted Woolhandler.
Instead of moving toward a Medicare for All system, she said, “The Trump administration and Republicans in several states are taking us in reverse: cutting Medicaid, threatening to gut protections for the more than 61 million Americans with pre-existing conditions, and allowing insurers to peddle stripped-down policies that offer no real protection.”
Bankruptcy can provide relief for families, study co-author Robert Lawless said, but like the relief the ACA provided to many Americans who were able to sign up for insurance after the law was passed, bankruptcy is a temporary and insufficient fix.
“Bankruptcy may provide a fresh start, but it comes at a high financial and emotional cost for those who file,” Lawless said. “Filing for bankruptcy can stop the financial bleeding that the healthcare system imposes, but curing that system’s ills is the only lasting solution.”
We’re not backing down in the face of Trump’s threats.
As Donald Trump is inaugurated a second time, independent media organizations are faced with urgent mandates: Tell the truth more loudly than ever before. Do that work even as our standard modes of distribution (such as social media platforms) are being manipulated and curtailed by forces of fascist repression and ruthless capitalism. Do that work even as journalism and journalists face targeted attacks, including from the government itself. And do that work in community, never forgetting that we’re not shouting into a faceless void – we’re reaching out to real people amid a life-threatening political climate.
Our task is formidable, and it requires us to ground ourselves in our principles, remind ourselves of our utility, dig in and commit.
As a dizzying number of corporate news organizations – either through need or greed – rush to implement new ways to further monetize their content, and others acquiesce to Trump’s wishes, now is a time for movement media-makers to double down on community-first models.
At Truthout, we are reaffirming our commitments on this front: We won’t run ads or have a paywall because we believe that everyone should have access to information, and that access should exist without barriers and free of distractions from craven corporate interests. We recognize the implications for democracy when information-seekers click a link only to find the article trapped behind a paywall or buried on a page with dozens of invasive ads. The laws of capitalism dictate an unending increase in monetization, and much of the media simply follows those laws. Truthout and many of our peers are dedicating ourselves to following other paths – a commitment which feels vital in a moment when corporations are evermore overtly embedded in government.
Over 80 percent of Truthout‘s funding comes from small individual donations from our community of readers, and the remaining 20 percent comes from a handful of social justice-oriented foundations. Over a third of our total budget is supported by recurring monthly donors, many of whom give because they want to help us keep Truthout barrier-free for everyone.
You can help by giving today. Whether you can make a small monthly donation or a larger gift, Truthout only works with your support.