Will Obamacare Reduce Bankruptcy Filings?

by Kevin Gipson, New Orleans Bankruptcy Attorney

October 1, 2013

Guess what day it is…Guess what day it is?camel

No, it’s not Hump Day, but it is the day when Obamacare comes one step closer to reality with the Health Insurance Exchanges going online today.

How might this affect bankruptcy?

The Health Insurance Exchanges mandated by Patient Protection and Affordable Care Act (PPACA),  also called the Affordable Care Act (ACA) or Obamacare, allows consumers without health insurance to obtain health insurance.

Like it or hate it, Obamacare hopes to allow many who are uninsured or have been previously uninsurable to afford insurance coverage.

Will this mean that fewer people will need to file for bankruptcy because of large, uncovered health bills?

There is no dispute that the three major reasons people file for bankruptcy are job loss, divorce or medical reasons, and that many people who seek assistance from bankruptcy attorneys come in hoping to file bankruptcy on their medical bills only.

Research conducted by Physicians for a National Health Program following the passage of Romneycare in Massachusetts in 2009, found that about 52 percent of consumers that had filed for bankruptcy listed medical bills as a factor that caused them to have to file for bankruptcy. In 2007, two years before, the number was closer to 59 percent.

Further, in a study conducted by nerdwallet, they discovered the following:

  • 56 million Americans under age 65 will have trouble paying medical bills
  • Over 35M American adults (ages 19-64) will be contacted by collections agencies for unpaid medical bills
  • Nearly 17M American adults (ages 19-64) will receive a lower credit rating on account of their high medical bills
  • Over 15M American adults (ages 19-64) will use up all their savings to pay medical bills
  • Over 11M American adults (ages 19-64) will take on credit card debt to pay off their hospital bills
  • Approximately 10M American adults (ages 19-64) will be unable to pay for basic necessities like rent, food, and heat due to their medical bills
  • Over 16M children live in households struggling with medical bills

Whether Obamacare will reduce the number of medical bankruptcy filings remains to be seen, but it is hopefully a set in the right direction.

by , New Orleans, Louisiana bankruptcy lawyer.


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I've been a consumer bankruptcy lawyer for nearly 25 years. Since that time I have helped many people resolve their financial problems. I have been practicing law since 1986 and I am licensed to practice in all state and federal courts in the State of Louisiana. Because I am a sole practitioner, you know that your debt matters are being handled by me personally. In addition to my work with consumers, I am also frequently asked to speak at local seminars on bankruptcy law. I am member of the following organizations: • Louisiana Bar Association • National Association of Consumer Bankruptcy Attorneys • Bankruptcy Law Network My office is located at: 3920 General DeGaulle Drive, New Orleans, LA 70114 Telephone: (504) 368-4101

Last modified: October 7, 2013