Massachusetts’ statewide healthcare reform, implemented in 2008, served as a model for the national Patient Protection and Affordable Care Act of 2010. Both the state and federal legislation mandated coverage for the previously uninsured and, among other goals, sought to reduce the risk of personal medical bankruptcy.

A 2011 study in The American Journal of Medicine, “Medical Bankruptcy in Massachusetts: Has Health Reform Made a Difference?” compared bankruptcy filers from 2007, before reforms were implemented, to those filing in the post-reform 2009 environment to see what role medical costs played. The researchers note that the U.S. financial crisis, beginning in 2008, “surely played an important role in increasing the bankruptcy rate,” but their overall findings are “incompatible with claims that health reform has cut medical bankruptcy filings significantly.”

The study’s findings include:

• Illness and medical costs contributed to 59.3% of bankruptcies in 2007 and 52.9% in 2009.
• From 2007 to 2009, the total number of medical bankruptcies in Massachusetts increased by more than one third, from 7,504 to 10,093.
• Though Massachusetts saw a 51% increase in medical bankruptcies over the 2007-2009 period, that rate was below the national average rate of increase; the state has historically had a lower rate of medical bankruptcy.
• Coverage rates expanded slightly between the two years for those undergoing bankruptcy, with 89% of the medical debtors insured in 2009 compared to 84.1% in 2007.
• Medical bankruptcy continues to occur primarily among middle-class families with health insurance.

The study notes that health costs increased significantly since reform was enacted and that despite near-universal coverage, Massachusetts residents still face high premium costs and substantial out-of-pocket expenses. The researchers warn that their data “do not suggest that health care reform cannot sharply reduce the number of medical bankruptcies.” However, achieving such reductions “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.”

Tags: health care reform, consumer affairs, Obamacare