October 1 was D-Day for the Patient Protection and Affordable Care Act, and as the nation knows, it has not been without problems.

President Barack Obama’s administration has promised that the national health exchange website will be fixed by the end of November. But the rollout of health insurance exchanges by states has been far more successful.

Regardless of whether the federal website makes its deadline or not, healthcare reform and universal insurance mandates will soon be upon us. And as we all know, this will eliminate the need for medical debt collection in the United States.

When pigs fly.

The hard truth is that there will be a greater vigilance required within accounts receivable management than ever before. Last month the President was touting healthcare reform in a speech held in Massachusetts, which pioneered the insurance mandate more than six years ago. Recently researchers writing in a publication of the Federal Reserve Bank of Boston were able to quantify the impact of healthcare reform on consumer medical debt. What relief did medical debtors find? Not much.

“Our findings from surveys of debtors in Massachusetts before and after the implementation of that state’s health reform (the prototype of the national reform) make it clear that such limited coverage will do little to prevent medical bankruptcy,” writes physicians David U. Himmelsteinand and Steffie Woolhandler in Communities & Banking, the Boston Fed’s quarterly publication.

The authors found no statistically significant difference between the number of medical-bill-related bankruptcies in Massachusetts than in other parts of the country. “Indeed, because the total number of bankruptcies had risen, the actual number of medical bankruptcies in the state increased from 7,504 in 2007 to 10,093 in 2009,” they write.

For the article’s authors, this becomes central to the argument that the time has come to set up a single-payer system. But for those responsible for medical accounts receivable, this means job security, at least for now.

Beginning January 1, Americans will be required to purchase some form of health insurance. Although many will be qualified for subsidies because of low incomes, they still could be on the hook for up to $12,900 in out-of-pocket costs for that year (that drops to $6,450 beginning in 2015).

In recent years, healthcare providers have seen their balance sheets challenged not only by the traditionally troublesome self-pay population, but by the under-insured, many of whom are middle class and a group that traditionally did not accumulate medical debt.

In fact the authors of study and the article found that the group hardest hit by medical debt issues was the middle class. “They had owned homes, had attended college, and had held responsible jobs,” the authors write. “Seventy-eight percent even had health insurance, mostly private coverage—at least when they first got sick.”

None of the healthcare providers I’ve spoken with has been so naive that they believe that bad debt was going to disappear thanks to healthcare reform. But what we will see is that accounts receivable will continue to challenge all us for years to come.

John Owen is the Director of Client Development at DECA Financial Services in Fishers, Indiana. Check out other great content in the DECA Blog–Bottom Line Results Matter–on insidePatientFinance.com.


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