A lot of questions have arisen lately about precisely how the Affordable Care Act would effect a variety of issues. A blogger for the Wall Street Journal’s MarketWatch recently considered how the law might affect the increasing number of middle-aged people who are divorcing after long-term marriages. Interestingly, she found that the impact might be game-changing, especially for women over 50.
Around 115,000 women in the U.S. lose their health insurance every year after divorce — many of them around age 50, according to a University of Michigan study last year. Women in this age group often stayed home to raise children, meaning they were typically insured through their spouses’ employers.
With less direct-workforce experience, they may find themselves struggling to afford their own policies — if they even qualify. Older women also tend to have more health problems than younger peers, so they’re more likely to run into preexisting condition exclusions.
In California, health insurance is one of the expenses taken into account in calculating spousal support (often called alimony). For older divorcees, however, health insurance has become so costly or hard to get that some have opted for legal separation instead of divorce in order to preserve their insurance, or even delayed divorcing until they reach 65 and qualify for Medicare.
Under the Affordable Care Act, insurers can no longer exclude people or charge them more for preexisting conditions. And, as we’ve seen in California, the projected cost of policies through the healthcare exchange is lower than was expected. The ACA, therefore, could make health insurance much more accessible for older divorcees. As one Century City wealth advisor told MarketWatch. “It will take one of the fears out of divorcing — I think it’s huge.”
The ACA could also have a market affect on the actual spousal support calculation. Since three tiers of coverage are available, divorcing couples and courts will have to decide which tier to purchase. After that, there is the effect of the subsidies in the law, complicated by the fact that spousal support is taxable income for recipients and tax-deductible for payers. How will spousal support affect each person’s eligibility for subsidies? If a potential recipient is eligible for a subsidy, should the amount of support be reduced?
Assuming the ACA goes into effect and works as expected, a lot of interesting questions remain to be answered, even in family law.