Peaceful Divorce

Affordable Care Act Could Ease Divorce’s Financial Sting

The cost of health insurance is one of the major factors to consider for a couple going through a divorce.

Last year the University of Michigan released a study which found that 115,000 women lose their private health insurance every year in the wake of divorce. Under the Affordable Care Act (ACA) it is hoped that health care costs will decline for some of these women as of January 1st, 2014.

  • One of the major considerations in a divorce is ensuring both spouses have access to health care coverage. This is discussed in divorce negotiations.

Part of the University of Michigan’s study found that women do not regain coverage quickly after a divorce. Many of the women:

  • Did not have jobs outside the home; 
  • Worked at jobs that did not provide insurance; 
  • Can no longer afford the premiums of their employer-sponsored plans;
  • Qualified for post-divorce COBRA health benefits under their ex-spouse’s plan, but that is of a limited duration of 36 months - and is often cost-prohibitive. 

The good news is that the ACA seeks to mitigate these and other obstacles to care with health care marketplaces that offer discounted insurance plans.

Many older couples make the decision to separate, but not divorce, for health insurance reasons. Sometimes it works out that there will be a gap in coverage between the time post-divorce COBRA runs out and Medicare begins. Staying married will allow the uninsured spouse to be stay covered until he or she reaches 65 - and thus is eligible for Medicare. By postponing the divorce, the wife in this case could transition to Medicare from her husband’s plan and never be without coverage. Under the new law, the financial sting of moving to a new private plan will be lessened; insurance companies will no longer be able to penalize people due to the presence of a preexisting condition - in addition to lower premiums from the marketplaces.

I think the ACA is an opportunity. However there are many facets to this law, and you need to make sure your advisors are familiar with all pieces of the puzzle. As a result of attending continuing education classes, I am available to discuss the implications of the ACA on you and your divorce. Contact me today to see how I can help.

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