Financial woes for the “later-in-life” divorcees may now be alleviated through the Affordable Care Act. Ex-spouses who are often left without health insurance after the split may now have affordable options that may lessen the blow of divorce. For most cases, financial woes related to healthcare could be a back-breaker for the 50-and-over divorced crowd.
The Affordable Care Act, also known as Obamacare, can potentially ease some the fears and financial burden associated divorce. Generally people get dropped form their spouse’s plan, so the new legislation will help those will little to no coverage get the care they need to maintain a similar standard of living pre-divorce.
Every year approximately 115,000 women no longer have health insurance as a result of divorce. They either do not work outside the home or work for employers who do not provide insurance. A small portion of the 115,000 women do have employer-sponsored coverage, but unfortunately, can no longer manage to pay the expensive costs. Many former spouses are eligible for post-divorce COBRA health plans, but COBRA is both exorbitantly expensive and is short term. These benefits last approximately 36 months, which is not a viable long term plan.
The retirement readiness of women is implicated by health insurance, which is one of the many factors that makes divorce later in life particularly burdensome. Pre-Affordable Care Act, older women who have not met the threshold age for Medicare were left in a peculiar position financially if they lost their coverage.
Fortunately, under the Affordable Care Act, post-divorce health-care expenses will decrease for many and become more accessible starting January 1, 2014. Under the new health-care legislation, denying people coverage or increasing their premiums due to pre-existing conditions will be prohibited. This allows for more certainty and predictability for people seeking coverage post-divorce.
The new policy changes how the ex-spouses’ can leverage health care coverage in alimony talks. Health insurance costs often enter the negotiations when one spouse owes another spousal support. Under Obamacare, a government tax credit can go toward an ex-spouses’ health-care coverage, and having access to this subsidy can be a determinate into spousal support computations. If a spouse qualifies for the subsidies, the opposing side can leverage that fact and request for lower alimony payments. Furthermore, the Medicaid program may be expanded through the Affordable Care Act thus giving attorneys for the opposing side a basis for an argument for decreased alimony payments.
Irrespective of how the Affordable Care Act may affect those divorcing after the age of 50, there are other important health-care related issues to contemplate. When initiating divorce proceedings, individuals should obtain a court order to guarantee that health insurance costs will be paid. Additionally, the value of prospective care-giving that would have been received during the marriage should be included in the divorce agreement. Furthermore, couples should research how long-term-care insurance may change because of divorce. Finally, another person should be selected to like to make medical decisions for you if the situation arises where you are no longer able to do so yourself.