Peaceful Divorce

In December of 2013, I wrote an article about the Affordable Care Act and how it could help in divorce situations. The information available at the time did not specifically mention divorce, but it was nonetheless helpful for me in several instances.

A detailed set of new data was released by the U.S. Department of Health and Human Services (HHS) in May of 2014, and I think the statistics merit a closer look.

The cost of health insurance - for both spouses - has always been 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.

Part of the University of Michigan’s study found that women also face obstacles in regaining coverage quickly after a divorce. Many women:

  1. Did not have jobs outside the home;
  2. Worked at jobs that did not provide insurance;
  3. Can no longer afford the premiums of their employer-sponsored plans;
  4. 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 health care with insurance marketplaces that offer discounted insurance plans.

In a parallel trend, 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 remain covered until he or she reaches 65 – and is thus 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, which would clear the way for lower premiums, as a result.

HHS also announced this week that more than 4.8 million additional individuals enrolled in Medicaid and the Children’s Health Insurance Program through the end of March 2014, compared to enrollment before the Marketplace opened last October.

More than eight million Americans signed up through the Marketplace, exceeding expectations and demonstrating brisk demand for quality, affordable coverage. In addition, over 4.8 million more people have been covered by states through Medicaid and CHIP programs, around 3 million more Americans under 26 are covered under their parents’ plans, and recent estimates show that an additional 5 million people have purchased coverage outside of the Marketplace in Affordable Care Act-compliant plans. Together we are ensuring that health coverage is more accessible than ever before, which is important for families, for businesses and for the nation’s health and well-being.

The report also details state-by-state information where available. In more than a dozen states, enrollment has doubled since March 1. For example, these three states showed some of the largest surges in enrollment in the country during the final weeks of the initial open enrollment period.:

  • Texas - 149% growth
  • Georgia - 127% growth
  • Florida - 123% growth

Some even more interesting data include:

8,019,763 people selected Marketplace plans from October 1, 2013, through March 31, 2014, (including additional Special Enrollment Period activity through April 19th). Nearly 2.6 million signed up in the State Based Marketplaces and over 5.4 million in the Federally-facilitated Marketplace. About 3.8 million people, including nearly 1.2 million young adults (ages 18 – 34), enrolled in the Health Insurance Marketplace plans in the sixth and final reporting period, which began March 2 and concluded on April 19. Those 3.8 million individuals represent nearly 90 percent growth over February’s cumulative enrollment.

Of the more than 8 million:

54 percent are female and 46 percent are male; 34 percent are under age 35; 28 percent are between the ages of 18 and 34; 65 percent selected a Silver plan, while 20 percent selected a Bronze plan; and, 85 percent selected a plan with financial assistance.

Note: For this report, enrolled persons are defined as those who selected a plan.

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.

The Inside Scoop on the New Mortgage Rules from an ExpertRobert D. Bordett CFP, CDFA Collaborative Practice and Mediation Services 888 U2AGREE (888.822.4733)

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