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Health care reform not having big impact on people’s medical debt

Many people in New Jersey find that medical bills are a big source of their debt load. Unlike many credit card bills, which can add up slowly — some might say imperceptibly — over time, medical bills can go from zero to tens of thousands of dollars in one fell swoop thanks to an unexpected illness or accident.

With health care reform a hot topic for politicians, many had hoped that the Affordable Care Act would aid in cases of people with medical bills. One of the concept behind the law was that by ensuring a broader spectrum of the public, then hospitals would not be forced to take on as much of what is largely uncollectable debt from people who are uninsured.

The law also limits the collection ability of nonprofit hospitals and prohibits insurers from not covering ill people or from charging them more. However, experts question whether or not this will work. One way to determine how well the law might work in the longer term is to look at data from Massachusetts, where a version of the law took effect several years ago.

In terms of bankruptcy filings — which often come about from excessive medical debt — Massachusetts did see a drop among people who blamed medical debt for their bankruptcy. However, the drop — about 6 percent — isn’t statistically significant. In terms of people who are carrying medical debt and paying it down over time, the figure was about 20 percent in 2010 and roughly the same six years earlier, before the law took effect.

Source: The Salt Lake Tribune, “Health reform won’t shield Utah families from medical debt,” Kirsten Stewart, Oct. 21, 2012

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