One Way to Stay Out of Bank­ruptcy Court: Keep Your Health Insurance

If you’ve been feel­ing dis­cour­aged by your health insur­ance costs, from pre­mi­ums to deductibles to copays, you’re cer­tainly not alone. But here’s a com­pelling rea­son to stay covered:

Peo­ple are twice as likely to file for bank­ruptcy if they go with­out health insur­ance or let it lapse for just two years, accord­ing to data pub­lished in the Sum­mer 2019 issue of the Amer­i­can Bank­ruptcy Insti­tute Law Review. You can read the details of these find­ings in this report from Mar­ket­Watch.

The ACA Has Dra­mat­i­cally Cut Per­sonal Bank­ruptcy Filings

Of course, other dif­fi­cul­ties are also likely to push peo­ple to file for bank­ruptcy. For exam­ple, the same extended cash flow cri­sis or lack of sav­ings that cause some­one to let go of their health insur­ance could cause some­one to show up in bank­ruptcy court.

But the link between health crises and bank­ruptcy is well estab­lished, and bank­ruptcy fil­ings have dropped by an aston­ish­ing 50% since the pas­sage of the Afford­able Care Act.

Health Insur­ance Rates May Be Sta­bi­liz­ing for 2020

Look­ing toward 2020 open enroll­ment, there’s mixed news about the ACA and options for insur­ance cov­er­age. On one hand, Kaiser Health News has been track­ing news sug­gest­ing that the days of “eye-​popping-​rate hikes” may be over. So the insur­ance mar­ket­place shows signs of sta­bi­liz­ing despite the Trump Admin­is­tra­tion’s ongo­ing efforts to tor­pedo the law.

On the other hand, the num­ber of peo­ple with health insur­ance cov­er­age has dropped for the first time since the ACA took effect. In light of the ABI’s new data about health cov­er­age and bank­ruptcy fil­ings this is sober­ing news. Taken together, these reports are a good reminder that phys­i­cal and finan­cial well-​being can hinge on hav­ing decent health insurance.

More Infor­ma­tion

Open enroll­ment for 2020 health plans is just around the cor­ner. (In most states, it starts Novem­ber 1 and runs through Decem­ber 15.) For infor­ma­tion about find­ing afford­able health insur­ance where you live, visit Legal Consumer’s Oba­macare learn­ing cen­ter.

If you’re think­ing about bank­ruptcy, you can find help and infor­ma­tion in Legal Con­sumer’s bank­ruptcy learn­ing cen­ter.