I'm using the word fict-fact for campaign assertions made that are more fantasy than fact. It’s important to understand what’s being sold to you if you’re listening to discussions about healthcare as part of your decision to vote for or against a particular candidate. One of the infuriating aspects of this election is all the bickering over the same ground rather than expanding exactly what’s at stake.
Bankruptcies caused by unmanageable medical debt represent anywhere from 40 to 50 percent of bankruptcies by some estimates. (Look anywhere for bankruptcies in US caused by medical debt). The ACA does little to address this problem and there is no current experience in terms of numbers that can be used to measure the impact of the ACA on bankruptcies. Similarly, Mitt Romney has proposed nothing to address this crushing need. That’s why as the candidates re-serve and repeat their favorite widgets about healthcare reform, neither addresses this dirty public secret about the inadequacy of healthcare coverage in our country.
Facing bankruptcy as a result of obtaining needed medical care is one of the tremendous problems that did and does occur in our healthcare system. What the ACA does impact is notification requirements of non-profit hospitals to their patients about financial assistance available in section 9007 of the Affordable Care Act. There are also provisions designed to keep non-profit hospitals from aggressively pursuing your debts with the help of collection agencies, though, again, the experience as to what this will mean is non-existent.
These are administrative changes in requirements regarding how information or billing requests are communicated, they do not change liability, (with one exception, if you are eligible for financial assistance in paying your bills the provisions do limit what you can be charged for emergency room services.)
The main reason that the ACA likely will not impact the number of individuals who will be forced into bankruptcy by medical debt in the event they become ill is because the cause of medical bill bankruptcies, the amount of money individuals owe because of medical debt are not addressed, specifically there are no cost containment provisions for providers, and there are only broadly general requirements for minimum levels of coverage from insurance companies.
The President obliquely referred to reducing the number of medical bankruptcies because of the removal of lifetime limits on insurance coverage, which is a fict-fact. The removal of lifetime limits provision has not yet taken effect yet so that it is still a guess as to what the experience of the removal of that provision will create, though likely it will prevent few bankruptcies.
The removal of lifetime limits means that your insurance company will continue to contribute a share of the money you owe for services even if your services exceed lifetime limits, rather than requiring you to pay 100 percent of the cost of your care that is deemed over those limits. Since those limits were formerly around $1,000,000, many individuals were forced into bankruptcy long before their expenses reached lifetime limits.
Further, the President didn’t discuss the options insurance companies have in terms of pricing their policies, such as putting healthcare options in tiers that provide for different levels of reimbursement depending on what tier of service you require, meaning that individual costs for needed medical care could actually rise under the ACA.
Mitt Romney also has his talking points but in addition to failing to address the problem of bankruptcies caused from inability to pay medical expenses, even when a person is insured, Mitt Romney has not assured the public that he will NOT remove the medical cost deduction that currently helps those facing enormous medical bills by allowing for a tax deduction of medical expenses that exceed 7.5% of your adjusted gross income.
