Link between Medicaid status quo and bankruptcy

In many states across the country, the Medicaid expansion has brought forth both praise and criticism. Mississippi decided not to participate in the Medicaid expansion, and not surprisingly, this move has also had both supporters and detractors. Some believe that the state's refusal to expand the healthcare program will negatively affect struggling residents who have unpaid bills related to medical expenses.

According to some recent studies, debt from medical bills is the biggest reason for personal bankruptcy in the U.S. In a struggling economy, issues like unemployment exacerbated the rising costs of healthcare. As a result, many in Mississippi and beyond have found themselves unable to pay the staggering bills for things such as surgery, the delivery of a baby, cancer treatment, broken bones and the like. The Commonwealth Fund reported that between 2005 and 2010, the number of Americans who indicated they had trouble paying medical bills rose by about 14 million.

Mississippi Congressman Bennie Thompson recently penned an article decrying the state's refusal to expand Medicaid, arguing that the decision could force many middle-class families to file for bankruptcy. What many don't realize about bankruptcy is that it is not just overwhelmed members of the middle-class who file; many lower-income residents as well as high earners may find themselves in the same position. It doesn't matter how high a person's income is if their medical debt is staggering in proportion; at the same time, a person with a lower total debt may still benefit from filing if they are unemployed or underemployed.

Individuals contemplating bankruptcy can benefit from learning more about both Chapter 7 and Chapter 13 bankruptcy. Both types of bankruptcy can help a person or family get out from under immense medical debt and move forward on more secure financial footing.

Source:, "An illness away from bankruptcy," Bennie G. Thompson, Oct. 13, 2014

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