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

Health insurance coverage rates for Massachusetts debtors were higher in 2009 than in 2007 (89.0% vs 84.1%) and significantly higher than the national average in 2007 (89.0% vs 69.7%). Despite broad insurance coverage in Massachusetts after reform, bankruptcy filings due to medical costs did not decrease significantly between 2007 and 2009. There is a web of causality behind this finding. Although only 11% of Massachusetts debtors remained uninsured, there was widespread underinsurance, leaving people with high out-of-pocket costs in deductibles, co-pays, and uncovered services. In addition, many debtors lost their jobs due to illness or experienced reduced income due to illness. In cascading events, loss of income led to loss of housing in many cases.


Massachusetts’ recent health reform has decreased the number of uninsured, but no study has examined medical bankruptcy rates before and after the reform was implemented.

In 2009, we surveyed 199 Massachusetts bankruptcy filers regarding medical antecedents of their financial collapse using the same questions as in a 2007 survey of 2314 debtors nationwide, including 44 in Massachusetts. We 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=.44) and 62.1% nationally in 2007 (PConclusion
Massachusetts’ health reform has not decreased the number of medical bankruptcies, although the medical bankruptcy rate in the state was lower than the national rate both before and after the reform.

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— David U. Himmelstein, MD, Deborah Thorne, PhD, Steffie Woolhandler, MD, MPH

This article originally appeared in the March 2011 issue of The American Journal of Medicine.

One Response to “Medical Bankruptcy in Massachusetts: Has Health Reform Made a Difference?”

  1. I think they need to take some action in this issue. Thanks for sharing.