Moving Beyond Medical Debt

27 American Bankruptcy Institute Law Review 93 (2019)

University of Missouri School of Law Legal Studies Research Paper No. 2019-14

46 Pages Posted: 8 Aug 2019

See all articles by Brook Gotberg

Brook Gotberg

BYU Law School; University of Missouri School of Law

Michael D. Sousa

University of Denver Sturm College of Law

Date Written: August 7, 2019

Abstract

In recent years it has become clear that medical costs are imposing severe financial burdens on American families, sometimes to the point that bankruptcy becomes the only escape from crippling debt. When evaluating the well-established connection between outstanding medical debt and consumer bankruptcy, most existing empirical studies attempt to quantify the percentage of consumer bankruptcies that are "caused" by unmanageable medical indebtedness. This Article addresses what we believe to be a more significant line of empirical inquiry, namely, the connection between health insurance coverage and consumer bankruptcy as a more precise measurement of how national health insurance programs may or may not affect bankruptcy filing rates. Data from a national longitudinal survey of adults from 2004 through 2014 indicate that the principle predictor of consumer bankruptcy is a lapse in medical insurance coverage, while controlling for socioeconomic variables such as race, marital status, household income, and debt-to-income ratios. Individuals who experienced a gap in coverage over a two-year period were roughly twice as likely to file for bankruptcy as those who retained continuous coverage. These findings contribute to the ongoing debate regarding the Affordable Care Act and the provision of health insurance to low-income Americans, and the role consistent health insurance coverage plays in relation to the consumer bankruptcy system.

Keywords: bankruptcy, insurance, health, affordable, affordable care act, consumer bankruptcy, health insurance, health coverage, lapse

Suggested Citation

Gotberg, Brook and Sousa, Michael D., Moving Beyond Medical Debt (August 7, 2019). 27 American Bankruptcy Institute Law Review 93 (2019), University of Missouri School of Law Legal Studies Research Paper No. 2019-14, Available at SSRN: https://ssrn.com/abstract=3433910

Brook Gotberg (Contact Author)

BYU Law School ( email )

430 JRCB
Brigham Young University
Provo, UT 84602
United States

University of Missouri School of Law ( email )

Missouri Avenue & Conley Avenue
Columbia, MO MO 65211
United States

Michael D. Sousa

University of Denver Sturm College of Law ( email )

2255 E. Evans Avenue
Denver, CO 80208
United States

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