The Affordable Care Act, or Obamacare as it is colloquially known, has promised to improve a lot of things for Americans. The central tenant of the law is to expand insurance coverage and make it possible for more people to have insurance policies, not just those who have a full time job with benefits. This element of the law has come into full effect as the calendar switched over to 2014, giving many people hope that the financial burdens that can come along with unexpected medical expenses may be behind them.

However, with high deductibles on many of the new plans, those high costs continue to be a problem for many Americans. Medical debt is one of the most common factors cited when someone files for bankruptcy in the United States. This type of debt can often be harder to manage than credit card debt or a car loan, since it comes on without warning usually after an accident or illness. These types of health events also prevent individuals from being able to work, adding to their financial troubles.

The situation can snowball, and soon bankruptcy becomes the best option to get out of debt and start over. Medical debt can be discharged as a part of the bankruptcy process, which means that those who qualify can eliminate that source of debt.

A spokesperson for the Department of Health and Human Services said that the situation is better under Obamacare, since the sky is no longer the limit for out-of-pocket expenses. Previously, those with pre-existing conditions or those who could not afford a robust private insurance plan were forced to go without coverage. This means that hospital bills pile up and there is no limit to the amount of debt that can occur during an illness. Under the new law, a deductible is often the extent of the cost to the patient.

Source: USA Today, “Medical debt will persist despite health law,” Jayne O’Donnell and Paul Overberg, Jan. 15, 2013