December 9, 2009

Whitehouse Amendment to Health Care Bill Would Help Families Struggling with Medical Debt

Washington, DC – As the Senate continues to debate landmark health care reform legislation, U.S. Senator Sheldon Whitehouse (D-RI) has filed an amendment to the legislation to help the many American families burdened by the costs of illness and injury. The amendment, which is modeled after Whitehouse’s Medical Bankruptcy Fairness Act introduced earlier this year, would make the bankruptcy process less costly and more accessible for people bankrupted by medical bills.

“Many families in Rhode Island and throughout the country are forced to file for bankruptcy every year by out-of-control medical expenses,” said Whitehouse. “As we work to fix the larger problems with our broken health care system, it’s equally important that we help those already struggling under the oppressive weight of medical expenses.”

In October, Whitehouse held a hearing in his Judiciary Subcommittee on the issue of medical bankruptcy which featured testimony from Elizabeth Edwards, senior fellow at the Center for American Progress, and Kerry Burns, a Coventry, Rhode Island resident who lost her home and filed for bankruptcy after her four-year old son endured lengthy hospital stays and eventually died of complications from Cystic Fibrosis. Burns testified about having to comply with bankruptcy procedural requirements, including a “humiliating” credit counseling requirement ill suited for people driven to insolvency not by poor decisions, but by medical misfortune.

Whitehouse’s amendment would allow the retention of at least $250,000 of home value through the bankruptcy process, helping families who incur high medical bills to keep their homes. It would also remove credit counseling requirements that are unnecessary when the cause of bankruptcy is not poor financial management but a medical crisis, and waive the so-called “means test,” making the filing process quicker and less costly. The amendment would also help ensure that people have the ability to have their debts discharged in Chapter 7, the most efficient and simplest bankruptcy process available.

As Mrs. Edwards testified in the October hearing, “This approach would give medical debtors a less burdensome, less catastrophic bankruptcy option that recognizes the unique circumstances that have driven them to bankruptcy.”


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