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Study finds link between health insurance gaps, bankruptcy

People in Oregon and across the U.S. are significantly more likely to file for bankruptcy protection if they experience an interruption in their health insurance coverage, according to a new study published in August by the American Bankruptcy Institute. Researchers used Bureau of Labor Statistics data to analyze the employment, health coverage and bankruptcy information of over 12,500 Americans. Of those individuals, 454 declared bankruptcy between the years of 2008 and 2014.

The researchers found that there was a "strong association" between health coverage gaps and consumer bankruptcy filings. Specifically, they found that people who had coverage interruptions of two years or more were more than twice as likely to declare bankruptcy. Furthermore, the association between coverage interruptions and bankruptcy remained even after researchers controlled for income and debt variables.

According to a separate report by the American Bankruptcy Institute, 64,283 people filed for bankruptcy in July 2019, which is a 5% increase in filings from July 2018. Consumers in Alabama had the highest per capita bankruptcy rate, with 5.61 filings per 1,000 people. Tennessee was second, with 5.39 filings per 1,000 people, Georgia was third, with 4.31 filings per 1,000 people and Mississippi was fourth, with 4.25 filings per 1,000 people. Nevada rounded out the top five, with 3.79 filings per 1,000 people. There were over 770,000 bankruptcy filings throughout the U.S. in 2018, which is down from a staggering 1.6 million filings in 2010.

Oregon residents who have lost their health coverage could end up with significant medical debt. When this happens, it might be helpful to contact a bankruptcy attorney for advice. An attorney could review a client's financial situation and recommend the best course of action. One possibility could be to file for bankruptcy, which could stop creditor harassment and provide a fresh financial start.

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The Law Office of Kim Covington is a debt relief agency, and I have helped families, individuals and small businesses, file for bankruptcy relief under the U.S. Bankruptcy Code, for over 19 years.

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