Senate Rejects Medical Debts Provision of Bankruptcy Reform

The Senate Wednesday voted 65-34 against an amendment to "sweeping" bankruptcy reform legislation that would have allowed people filing for bankruptcy due to "disastrous" medical bills to have "a better chance" of erasing their debts in court than those "filing for other reasons," the AP/Omaha World-Herald reports. Sen. Paul Wellstone (D-Minn.), who sponsored the provision, said, "We know that nearly half of all debtors report that high medical costs forced them into bankruptcy. This is an especially serious problem for the elderly" (AP/Omaha World-Herald, 3/8). However, Sen. Orrin Hatch (R-Utah), chair of the Senate Judiciary Committee, said that the amendment "unwisely creates two classes of debtors" and would establish an "unfair loophole." A study published in May 2000 found that "catastrophic medical bills" led about 500,000 Americans to file for bankruptcy protection in 1999, representing 40% of that year's filings. In addition, the report found that "financial misfortune can befall" people with or without health insurance, and that bankruptcy resulting from medical expenses affects seniors, women and families headed by single women "hardest." The House passed the bankruptcy legislation last Thursday, and President Bush is expected to sign the bill if it is approved by the Senate (Gordon, AP/Albany Times Union, 3/8).