Massachusetts reforms had no impact on medical bankruptcy, liberal researchers say

By Jason Millman
The Hill, March 8, 2011

An individual mandate has done little to stem the rate of medical bankruptcies in Massachusetts, boding poorly for the federal healthcare reform law enacted almost a year ago, according to a new liberal study.

The number of medical bankruptcies in Massachusetts increased from 7,504 in 2007 to 10,093 in 2009, while the state’s rate of medical bankruptcies experienced a “non-significant” decrease from 59.3 percent to 52.9, said researchers Dr. David Himmelstein and Dr. Steffie Woolhandler in the American Journal of Medicine.

The authors, both affiliated with single-payer advocate Physicians for a National Health Program, said medical bankruptcies continue to plague Massachusetts because the 2006 reform, pushed by then-Gov. Mitt Romney (R), covered more people but provided them with weak insurance. The researchers said this raises the same concern with the federal healthcare overhaul because it was modeled after the Massachusetts reform, including the requirement for all individuals to purchase insurance by 2014.

“Massachusetts’ health reform, like the national law modeled after it, takes many of the uninsured and makes them underinsured, typically giving them a skimpy, defective private policy that’s like an umbrella that melts in the rain: the protection’s not there when you need it,” Himmelstein said in a statement.

President Obama and Democrats often cited the need to end medical bankruptcies as they made their case for healthcare reform. However, the liberal advocates say the reforms do not go far enough.

“[R]educing medical bankruptcy rates in the United States 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,” the researchers wrote.

The Massachusetts medical bankruptcy rate is actually on the lower end of the scale when compared to national figures. The study’s authors attributed this to the state’s relatively high prosperity, older population and robust social safety net.