Obamacare helped make a 50% dent in personal bankruptcies … – MarketWatch

The Affordable Care Act was among the likely factors that assisted with a big decrease nearly 50% in personal bankruptcy filings in the last six years, according to a Consumer Reports analysis.

Other factors, including new bankruptcy laws, a rebounding economy and tighter credit requirements, also likely helped with the reduction, with filings dropping from 1.54 million in 2010 to 770,846 last year.

Theres no way to know what made the biggest difference in that drop, since those filing for personal bankruptcy dont state a specific reason for it.

Personal bankruptcies actually began to decrease before the ACA, also called Obamacare, began to be implemented, though some parts including expanding family health plans to young adults started in 2010.

Read: This expensive risk lurks in nearly every medical experience you have

Still, the health care law in all likelihood played a major role. The ACA reduced uninsured rates to historic lows, with a major portion of that expanded insurance coverage for low-income Americans.

See: Forget iPhones many Americans cant pay a $100 medical bill

The laws consumer protections include health insurance for those with pre-existing conditions, reduced premiums for older people and an end to health insurers capping annual or lifetime benefits.

The ACA also subsidized individual health plans for many low and middle-income individuals. Richard Gaudreau, a consumer bankruptcy lawyer in New Hampshire, says he sees far fewer clients who dont have health insurance now.

I think before the ACA there were a lot of medically-driven costs in personal bankruptcies, he said. I think that has changed... I can only think of one in the past few years that was true of.

Related: With Obamacare repealed, 1 in 4 adults could be uninsurable due to a pre-existing condition

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Medical bills, which are famously costly and unpredictable, have been historically estimated as the leading cause of bankruptcy filings. Other reasons include a lost job, reduced income and divorce, Gaudreau said.

A 2009 Harvard study estimated medical issues were responsible for 62% of bankruptcies, while a 2013 NerdWallet analysis based on the Harvard study came to a more conservative conclusion, or 57%. (Another study, done at Northeastern University, found a far lower rate, or 18% to 25%.)

The problem with looking at medical bankruptcy specifically is the same as deducing the cause of personal bankruptcy more generally: there isnt always one reason. The NerdWallet analysis, for example, didnt include indirect reasons for medical bankruptcy like lost work.

People use a credit card because they cant afford to pay for food and gas, so they can pay their medical bills because they have to keep their physician happy, Gaudreau said.

The latest numbers may pose an additional hurdle to repealing the ACA, the likelihood of which has dimmed recently after opposition from lawmakers. Though President Donald Trump ran for office on promises to repeal and replace the ACA, that effort has been challenged by divisions within the Republican party.

Read: What Trump can do to undermine Obamacare, now that the GOP health bill has failed

And, even if the health care law has contributed to a decline in personal bankruptcies, theres still evidence of its financial difficulties. Health-care premiums have gone up substantially in certain areas, and the high-deductible plans expose those on them to large out-of-pocket expenses.

See more: Entrepreneurs and small businesses on why they hate and love Obamacare

Moreover, its possible premiums could increase even more next year. High-profile exits from the ACAs exchanges or specific state exchanges could cause premiums to spike, and there could be even more departures health insurers have until June to decide.

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