One of the most common reasons people file Las Vegas bankruptcy is unpayable medical bills. Lacking a public health care system in the United States costs so much that Americans pay twice as much per capita as people in other advanced industrialized countries. With the implementation of the Affordable Care Act (often referred to as “Obamacare”) next year, however, it’s possible that costs will drop substantially. On July 16, The New York Times ran an article on the dramatic price drop in health insurance in New York State, which might be a harbinger of what’s to come in Nevada. Here are six things worth knowing.
- Until now, for New Yorkers not on Medicare or employer-provided plans, health insurance is monstrously expensive. The current premiums are about $1,000 per month for the 17,000 people who purchase their own insurance.
- The causes of the high premiums are New York laws that require insurance companies to cover preexisting conditions and no mandate that everyone purchase insurance. The result is what economists refer to as “adverse selection”: People with preexisting conditions purchase insurance, which raises insurance costs for healthy insureds. The healthy people leave the program, forcing the remaining ones to shoulder the increasing health care costs for treating the people with preexisting conditions.
- Although mandatory coverage of preexisting conditions sounds compassionate, without other legal mechanisms to guard against adverse selection, it makes the situation worse. The Affordable Care Act solves the problem by requiring healthy people to purchase health insurance by taxing them if they do not. The tax was upheld as constitutional in the landmark 2012 Supreme Court decision National Federation of Independent Businesses v. Sibelius.
- The Affordable Care Act also provides subsidies to Americans who are too poor to purchase health insurance, allowing them to fulfill the mandate.
- The result in New York is a predicted nosedive in health insurance premiums. The $1,000 monthly bill can drop to as low as $308, even before the subsidies kick in. The number of self-insureds will rise from 17,000 to 615,000.
- This will benefit the state immensely. The 2.6 million New Yorkers who lack health insurance will be able to afford it, and they won’t charge health care onto credit cards and then filing bankruptcy.
The lesson for Nevada is that if the same dynamic works in this state, Las Vegas bankruptcy can be avoided by purchasing health insurance for a fraction of the cost it goes for today. However, if you have excessive medical bills, then talk to an experienced Las Vegas bankruptcy lawyer to learn your options.
For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Haines & Krieger Las Vegas bankruptcy attorney for a free initial consultation. Call us at 1-702-880-5554 to set up your free consultation.