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Massachusetts reform law may lead to more underinsured

Being in debt is hard on a person's mental and physical state of being. One of the highest burdens for many people in Massachusetts is medical debt. A costly injury can put a person thousands of dollars in arrears. Long-term treatment can be even more costly when the bills continue to rack up. Debtors may find themselves surrounded by debt collectors who will use any method possible to try and collect what is owed. One option a debtor may want to explore when he or she is in high levels of consumer debt is filing for bankruptcy.

According to a new study in Massachusetts by the Federal Reserve Bank of Chicago, the Massachusetts reform law, known as Romneycare, helped to reduce bankruptcies by 20 percent. The study said that many people are burdened by extreme levels of debt due to high medical costs. The study said the law will help individuals get insurance for medical costs, but it may lead to more people who are underinsured. Those people who are underinsured may incur significant debt if they are injured and need medical care.

There is no doubt that a healthy lifestyle and eating habits should lead to less time in the hospital, but being blindsided by a devastating injury could have major financial repercussions. If an individual is injured and has incurred high levels of debt, one option he or she may want to consider is personal bankruptcy. Out-of-pocket expenses can be very high if a person is injured or needs care. Personal bankruptcy can help a debtor manage his or her debt, alleviate some of the financial load and help the debtor get back on track to independence.

People should be able to receive care for an injury or illness without facing large amounts of debt. Unfortunately, major health conditions can lead to high levels of medical expenses. However, filing for bankruptcy can help get rid of the debt and manage it in a way that allows the debtor to pay it off.

Source: Philly.com, "Study: Health reform reduced bankruptcies 20 percent," Wendell Potter, Feb. 24, 2014

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