U.S. Lawmakers Seek Changes to Bankruptcy Bill, Prompted by Medical Debts

Main Category: Public Health
Article Date: 15 Feb 2005 - 8:00 PDT

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In light of a study released last week showing that roughly half of all bankruptcies are related to unpaid medical bills, three US senators Wednesday called for major changes in a bill that would make it more difficult for consumers to use bankruptcy laws to discharge their debts.

People who file for bankruptcy due to medical bills "are penalized twice - once by our fractured health care system and a second time by our bankruptcy laws," said U.S. Sen. Edward Kennedy (D-MA).

Bankruptcy laws are among the few "safety net" protections for middle-income Americans, said Kennedy. Yet the legislation that has nearly passed Congress several times "fractures that safety net and will drop millions of middle-income Americas into poverty and despair."

"Frankly, I'm glad none of these bills has passed," said U.S. Sen. Richard Durbin (D-IL). "They're just cruel" to consumers, essentially allowing "greedy credit card companies and financial institutions...to create a new debtors' prison."

Elizabeth Warren, the Harvard Law School Professor who co-authored the study that found that not only are medical costs a leading cause of bankruptcy filings, but that more than three-quarters of those who filed due to medical bills actually had health insurance, said the bill under consideration in Congress would worsen the situation.

"This bill is about how to squeeze families; how to squeeze women, how to squeeze children, how to squeeze the elderly," Warren said.

Warren also praised the lawmakers for their efforts to alter the bill. "There is no political action committee to speak out on behalf of families," she said. " This is a bill where all the money is on one side, and all the hurt is on the other."

The bankruptcy bill has been stalled in the past not because of issues related to medical bills, but because of an abortion dispute. The Senate has repeatedly passed a bill that would make it more difficult for abortion protestors to declare bankruptcy to avoid paying court-ordered fines; that has been staunchly resisted by abortion opponents in the House.

The Leukemia & Lymphoma Society Media Release

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