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Will the new health law help reduce medical debt?

As some readers are already aware, medical debt is one of the leading factors for individuals who decide to declare bankruptcy. Medical debt nearly always appears by surprise and when one is suffering from a serious injury or illness, it is hard to get back to work to start making payments on that debt.

The Affordable Care Act included change for various aspects of insurance regulations, primarily for the purpose of including more people in the system. This would hopefully mean that less people would be stuck with hefty out-of-pocket costs and if they were, it would be slightly more predictable based on their deductible.

Unfortunately, this dream is not necessarily playing out the way many had hoped it would in reality. Instead, about 34 percent of people with higher deductibles responded to a survey saying that they had difficulty with medical debt. For those on lower deductible plans, about 24 percent had trouble with their medical bills.

Experts say that one issue is that many individuals do not have the cash on hand to pay for the deductible all at once or in a large portion, and they are often not in a financial situation where they are able to save for it in advance.

The good news is that for those who are truly struggling with medical debt, the bankruptcy process offers a way out. While declaring bankruptcy is not an ideal solution for most, it can help individuals and families get a fresh start when expected events leave them in a difficult situation.

Source: USA Today, "Medical debt will persist despite health law," Jayne O'Donnell and Paul Overberg, Jan. 15, 2013

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