One of the big issues that always comes up in cases where divorcing couple is older, or where one party to the divorce is an unemployed homemaker, is health care. In these situations, it is typical for both husband and wife to be insured together under a group plan from the employer for one of the spouses. Where one spouse has stayed at home for many years raising the children (typically, but not always the wife), they could be left in the awkward position of having to find private health insurance. (COBRA is always an option, but it is usually extremely expensive and is available for only 36 months after the divorce is final).
Because the dependent spouse is usually older (40’s or 50’s), there are often preexisting conditions involved, and if insurance is available after COBRA runs out, it is also extremely expensive. Since the only insurance that is available is private pay, in the past there have been very high deductibles, little or no prescription drug coverage, and premiums are raised substantially each year. The spouse left in the unenviable position of having to purchase private insurance is forced to either get a job (if they are able to find one), pay for their medical bills without insurance (not only exhausting savings, but potentially leading to bankruptcy), or otherwise wait until they reach 65 and qualify for Medicare (hoping they don’t get sick in the meantime, and potentially forgoing preventive care that could extend their lives and prevent catastrophic diseases later).
Fortunately, the Health Care Reform Bill that was recently signed into law by President Obama contains a number of provisions that will help the dependent spouse:
- Starting in 2014, insurance companies cannot deny coverage to anyone with preexisting conditions.
- Closes the Medicare prescription drug “donut hole” by 2020. Seniors who hit the donut hole by 2010 will receive a $250 rebate.
- The uninsured and self-employed would be able to purchase affordable insurance through state-based exchanges with subsidies available to individuals and families with income between the 133 percent and 400 percent of poverty level.
- Individuals and families who make between 100 percent – 400 percent of the Federal Poverty Level (FPL) and want to purchase their own health insurance on an exchange are eligible for subsidies. They cannot be eligible for Medicare, Medicaid and cannot be covered by an employer. Eligible buyers receive premium credits and there is a cap for how much they have to contribute to their premiums on a sliding scale.
- Eliminates co-payments for preventive services and exempts preventive services from deductibles under the Medicare program. Effective beginning January 1, 2011.
- Bans health plans from dropping people from coverage when they get sick. Effective 6 months after enactment.
- Prohibits health plans from placing lifetime caps on coverage. Effective 6 months after enactment.
- Requires new private plans to cover preventive services with no co-payments and with preventive services being exempt from deductibles. Effective 6 months after enactment. (Beginning in 2018, this requirement applies to all plans.)
- Provides immediate access to insurance for Americans who are uninsured because of a pre-existing condition – through a temporary high-risk pool. Effective 90 days after enactment.
I know the health care bill is highly controversial, but for divorcing spouses who will be left without insurance – it is a good thing.