Broken by health debts | Arkansas Blog

Wednesday, July 1, 2009

Broken by health debts

Posted By on Wed, Jul 1, 2009 at 10:41 AM

Another of the Arkansas Blog's wise readers calls attention to a New York Times article today on how even health insurance isn't a safety net. Most of those (75 per cent) pushed into bankruptcy by health care debts had health insurance, the article notes. In short, coverage can be so poor (no matter how expensive), that a medical crisis is still impoverishing.

There is, naturally,a  local angle and not just in those Arkansans crushed by the cost of health care, insured or not. As our reader points out, U.S. Sens. Mark Pryor and Blanche Lincoln endorsed bankruptcy "reform" legislation in 2005 that makes it hard to discharge such debts. He writes:

The law prevents regular citizens from getting relief from medical debts without entering a creditor-run payment plan.
It is amazing to me that no one has asked Sen. Lincoln why her views on bankruptcy have changed all of a sudden. On her website's issue and legislation section on health insurance, she now says this: "Americans without health insurance suffer worse health and die sooner than those who do have health insurance. Working families need help with this problem. In Arkansas, the number one cause of bankruptcy is high medical bills."
But when she supported the bankruptcy bill in 2005, she disputed a Harvard study that said most personal bankruptcies were caused by high medical bills, soaring health costs and lack of insurance. Instead, she said that credit card companies and the banks, who have been bailed out by the government and are now are raising interest rates for low-income borrowers, needed protection from bankruptcy filers.

"Today, the evidence shows that bankruptcy proceedings are being manipulated by some to avoid debts even when they have the ability to pay. That’s just wrong. Unfortunately, lenders have to be protected by laws when there is no honor," Lincoln said in 2005.

The other huge issue is that under the former bankruptcy rules, many people could protect their most valuable asset -- their homes. Blanche's support of Bush's 2005 bankruptcy bill makes its virtually impossible for people behind on their bills or out of work to prevent foreclosure of their homes, which is the foundation of the worst economic downturn since the Depression.

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