Thursday, June 29, 2017

Obamacare Is Responsible For Cutting Bankruptcies In Half

This is an effect of the Affordable Care Act (Obamacare) that we don't talk enough about -- bankruptcies. It's just a fact that the leading cause of bankruptcies in the United States among individuals is unmanageable medical costs.

Back in 2010, before Obamacare was passed and went into effect, the number of personal bankruptcy filings was 1,536,799 (and was rising each year). The current yearly rate of personal bankruptcy filings is 770,846 (and the trend is downward). The bankruptcies have been cut in half since Obamacare went into effect.

Some of that is due to a better economy (although many Americans are still struggling in our tepid economy), but most financial experts agree that Obamacare was one of the prime factors in the drastic cutting of bankruptcy filings. Thanks to Obamacare, far fewer families are facing crushing medical debt that forces them into bankruptcy.

We could do even better by fixing Obamacare's problems (by covering more Americans and controlling medical and insurance costs), but the Republican plans (both in House and Senate) won't do that. Instead, they throw 22-23 million people off the insurance rolls while doing nothing to control costs, and they would again let insurance companies sell policies with inadequate coverage. If either of those plans are passed (and signed into law), we could expect to see personal bankruptcy filings rise sharply.

The chart above is from Consumer Reports.

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