Personal Bankruptcy

March 11, 2012 by staff 

Personal Bankruptcy, Mary Brown, 56, a Florida woman who owned a small auto-repair shop but had no health insurance, became the lead plaintiff challenging President Obama’s health-care law because she was passionate about the issue.

Brown “doesn’t have insurance. She doesn’t want to pay for it. And she doesn’t want the government to tell her she has to have it,” said Karen Harned, a lawyer for the National Federation of Independent Business. Brown is a plaintiff in the federation’s case, which the Supreme Court plans to hear this month.

But court records reveal that Brown and her husband filed for bankruptcy last fall with $4,500 in unpaid medical bills. Those bills could change Brown from a symbol of proud independence into an example of the problem the health-care law was intended to address.

The central issue before the Supreme Court is whether the government can require people to buy health insurance. Under the law, those who fail to buy insurance after 2014 could face a fine of up to $700.

The business federation, along with other critics, calls the insurance mandate a “threat to individual liberty” that violates the Constitution.

Obama administration lawyers argue the requirement is justified because everyone, sooner or later, needs health care. Those who fail to have insurance are at risk of running up bills they cannot pay, sticking society with the cost, they argue. Brown’s situation, they say, is a perfect example of that kind of “uncompensated care that will ultimately be paid by others.”

“This is so ironic,” Jane Perkins, a health-law expert in North Carolina, said of Brown’s situation. “It just shows that all Americans inevitably have a need for health care. Somebody has paid for her health-care costs. And she is now among the 62 percent whose personal bankruptcy was attributable in part to medical bills.”

Lawyers who represent Brown dispute the significance of her bankruptcy. They say her unpaid medical bills were only a small part of her debts. They say that she and her husband owe $55,000 to others, including credit-card companies. And they say her financial troubles were caused by the failure of her auto-repair shop.

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