Medical Bankruptcy in Massachusetts: Has Health Reform Made a Difference?

Study Questions:

What is the impact of health reform on medical bankruptcy?


In 2009, the investigators surveyed 199 Massachusetts bankruptcy filers regarding medical antecedents of their financial collapse using the same questions as in a 2007 survey of 2,314 debtors nationwide, including 44 in Massachusetts. They designated bankruptcies as “medical” based on debtors’ stated reasons for filing, income loss due to illness, and the magnitude of their medical debts.


In 2009, illness and medical bills contributed to 52.9% of Massachusetts bankruptcies, versus 59.3% of the bankruptcies in the state in 2007 (p = 0.44) and 62.1% nationally in 2007 (p < 0.02). Between 2007 and 2009, total bankruptcy filings in Massachusetts increased 51%, an increase that was somewhat less than the national norm. (The Massachusetts increase was lower than in 54 of the 93 other bankruptcy districts.) Overall, the total number of medical bankruptcies in Massachusetts increased by more than one-third during that period. In 2009, 89% of debtors and all their dependents had health insurance at the time of filing, whereas one-quarter of bankrupt families had experienced a recent lapse in coverage.


The authors concluded that Massachusetts’ health reform has not decreased the number of medical bankruptcies.


The study suggests that despite a marked decline in the uninsurance rate in Massachusetts since the implementation of health reform, the proportion of bankruptcies that occurred in the wake of medical problems has not decreased significantly, and the absolute number of medical bankruptcies has actually increased by one-third. These findings do not appear to be compatible with claims that health reform has cut medical bankruptcy filings significantly. These data appear to suggest that reducing medical bankruptcy rates in the United States will require substantially improved, not just expanded insurance, as well as better disability insurance programs to provide income support to ill individuals and family caregivers.

Keywords: Health Care Reform, Medically Uninsured, Insurance, Disability, Bankruptcy, Insurance, Health, Massachusetts, United States

< Back to Listings