Daniel Gershburg, owner of Gershburg Law P.C. a consumer bankruptcy firm based in New York, has seen his fair share of medical bankruptcies prior to Obamacare but none after its inception. He was kind enough to share his thoughts on what's coming down the pipeline and the future of healthcare affordability after an Obamacare repeal. Let it be noted none of this is legal advice.
What has Obamacare done for medical bankruptcies?
Pre-Obamacare, most of the issues I dealt with was medical debt upwards of $50- or $60,000. In some situations, they were laid off from their jobs and they had to foot their medical bill. Post-Obamacare, you saw a shift. Chapter 7 bankruptcies, which is your common type of bankruptcy, really dipping speaks to the fact that Obamacare really worked. Are there issues? Yes, we know about the high deductibles and doctors being in particular plans, but I can certainly tell you I haven't filed many cases where the main issue was medical debt.
What industries did your clients work in?
A lot of people that filed were small business owners where they essentially needed health insurance and weren't necessarily able to give health insurance to their employees. The plans in place prior to Obamacare were insanely expensive.
There were people that were freelancers, there were bartenders, there were lots of different types of people that found value in Obamacare and wouldn't have had this flexibility before. These people weren't just those earning $15k a year and couldn't afford a roof over their heads; these were people earning $50-, $60-, $70,000, sometimes more than that and the fact that they had the ability to get this health insurance after Obamacare certainly helped them.
Senate Budget Chairman Mike Enzi of Wyoming said, "The Obamacare bridge is collapsing and we're sending in a rescue team." What would your clients say about that?
I don't know how long it would take the rescue team to get here from Russia, but I will tell you there is no rescue team, because there's no plan in place to replace Obamacare. It's not as if everyone loves Obamacare. There's significant problems for my clients in terms of medical bills and the deductions they actually pay that need to be fixed. The problem is, what are you replacing that with? It's like someone coming to your house in the middle of the night, taking your car and saying, "Don't worry, in the morning you'll have something better." You'll have no idea what it is. That's insane. To the extent the politicians want to work together that actually addresses these concerns - awesome, do it. My confidence level of that just as a private citizen is close to nil.
What's going to happen to the Millenials who can no longer be under their parents' plans?
The ACA allowed people under 26 to stay on their parents plan, so if you think about this in a purely logical non-partisan way of people that aren't getting jobs and are burdened with an enormous amount of student loan debt plus paying rent - I don't know what they're going to do. They're actually going to face a significant problem, and it frankly was a problem before Obamacare where in some instances they couldn't get health insurance whatsoever. And it helps when you're covered under a particular plan and you need surgery. And it helps when you're covered under a particular plan when something happens to you and you need to see a doctor instead of googling treatment when your skin is burning off.
Now that Obamacare is inevitably going to be repealed what advice would you give to your clients?
I'm not a tax lawyer, but there's tax implications that come into this. The market is affected when insurance companies don't know what to do, because there's no clear solution as to when something will replace this. It's this new territory where no one knows how to react, and you can't really give good advice because you don't know what's coming as a result of it.