Divorce Can End Health Insurance for Many Women
You lose a spouse in divorce, and you also stand to lose custody of children as well as property and possessions. But did you know you can also lose your health insurance?
It’s an aspect of divorce that is often overlooked. And according to a study released in November by researchers at the University of Michigan, loss of health insurance via divorce is happening to more and more women.
Growing Problem for Middle Class
About 115,000 American women lose private health insurance annually in the months following divorce and roughly 65,000 of these women become uninsured, according to the study, “Divorce and Women’s Risk of Health Insurance Loss,” published in the Journal of Health and Social Behavior.
“We looked at different characteristics of women and found those with the highest risk are those who are covered through their husband’s employer,” one of the study’s co-authors, Bridget Lavelle, told the American Medical Association. “One in four became uninsured.”
Lavelle said that middle-class women were particularly hard hit, as they “make too much money for public insurance or Medicaid and not enough to be able to afford COBRA or buy their own insurance.”
Count Health Insurance in Alimony
Lawyers say health insurance coverage should be handled as part of the divorce.
“In the event that a spouse faces divorce without health insurance coverage and the spouse has an alimony claim, I make sure that the cost of health insurance is added to the alimony claim,” says Bari Weinberger with the Weinberger Law Group in Parsippany, N.J.
“In other words, the cost of health insurance increases the support obligation,” she explains. “The goal of alimony is to maintain the marital lifestyle and insurance was a part of the lifestyle, so it makes sense that it would increase a support obligation.”
The issue can be complicated if the spouse without the covered job has a pre-existing health condition that might prevent her from buying insurance on the private market.
“This is an interesting dilemma,” Weinberger says. “If there are enough assets to fund a trust, they may want to create a medical cost trust.” But that’s really only an option if money is no object, and it often is in most people’s divorces.
For those with illnesses, “depending on their age and severity of the illness, they may want to apply for government programs which would assist them such as Medicare/Medicaid,” Weinberger suggests.
“This takes additional planning in the divorce as to ensure that a supported spouse can qualify for such benefits,” she adds. “Social Security Disability Insurance may be another route to pursue, if the circumstances allow it.”
Let’s Stay Together – for the Insurance
Another overlooked difficulty raised by the role played by health insurance in divorce is that spouses sometimes stay together – just for the insurance.
One possible way to solve this problem is to get a “divorce from bed and board” – a legal separation provided for by statute in some states that allows one spouse to cover the other’s health insurance even if the couple divorces.
“However, there has been a push back from employers and providers,” says Weinberger of such arrangements. “The employers and providers will consider a divorce from bed and board as an absolute divorce in order to drop the supported spouse’s insurance coverage.”