Originally published June 2021
Updated September 2022
Most of us have an opinion one way or the other about how health insurance works here in the U.S.
Regardless of how you feel about the current system, the fact that insurance coverage is often tied to employment means that a non-working or part-time employed spouse in a divorce proceeding may have some healthcare challenges ahead of them post-divorce.
If you are in a divorce proceeding (or considering initiating a divorce) and healthcare is on your mind, this article is for you.
Here I'll lay out the options you may have.
Using this article and working with your attorney to integrate a provision for your healthcare in your final divorce settlement may help you feel more confident about the future.
Before we jump in, there is one item I want to be sure you understand.
You do not have to wait until the open enrollment period to get coverage after your divorce.
Divorce is considered a "qualifying event," which triggers a window of time called a special enrollment period and allows you to enroll in a new plan outside of open enrollment.
You do not have to wait until the open enrollment period to get coverage after your divorce.
Medicare
If you are part of the trend of "grey divorces" - divorces after age 50 - you may be qualified for Medicare.
You are eligible to enroll in Medicare when you attain age 65.
Medicare comes in several different parts, but the most common are:
- Part A: inpatient hospital coverage
- Part B: outpatient major medical coverage
- Part D: prescription drug coverage
Many Medicare recipients choose to add supplementary coverage in the form of a Medigap policy (also known as Medicare Supplements) or Medicare Advantage (otherwise known as Part C).
Available Medigap or Medicare Advantage policies will vary by state, and coverage will vary from policy to policy.
Before you buy, make sure you understand what your premiums will be, what the plan will cover, and any limitations on coverage like deductibles and co-insurance.
If you are eligible for and plan to pursue Medicare coverage, working with an experienced Medicare insurance agent can be extremely beneficial.
These plans are complex, and a competent, caring agent can help you navigate the maze of plans and providers to find the right mix of coverage for your specific situation.
Employer Coverage
Employer CoverageIf you are employed, first check to see if your employer offers health insurance.
Often, employer-provided coverage is subsidized by the employer and paid for with pre-tax dollars, making it potentially the best value for the money.
Contact your Human Resources department to collect information about what is available, what the coverage will cost, how the plan works, and any limitations on coverage like deductibles and co-insurance.
COBRA
Under the law, your ex-spouse's employer must offer you COBRA[1] continuation coverage for 36 months after the date of your divorce.
This coverage may be obtained independent of your ex-spouse.
If you are currently seeking employment and expect that you'll attain your own employer coverage at some point in the coming 36 months, this might be a good option for you.
It will allow you to keep the coverage you have now so you can retain your current set of care providers.
However, COBRA is not subsidized by the employer and can be expensive relative to other options.
If you are considering using COBRA, be sure your attorney requests documentation about COBRA benefits from your soon-to-be-ex-spouse.
You'll want to know your expected monthly premium and any limitations on coverage like deductibles and co-insurance.
Private Insurance or Open Marketplace
If you are too young for Medicare and employer coverage isn't available to you, private insurance may be your best option (especially if COBRA coverage is prohibitively expensive).
Coverage can be purchased through an agent or the Health Insurance Marketplace (sometimes called the ACA Marketplace) provided for in the Affordable Care Act passed in 2010.
If you meet specific income requirements, you may qualify for a subsidy that can drastically reduce the cost of your plan premiums.
If you do not qualify for a subsidy, it may be more cost-effective to buy health insurance directly from an insurance company.
Before you buy, make sure you understand what your premiums will be, what the plan will cover, and any limitations on coverage like deductibles and co-insurance.
As with Medicare, plans can be complex, and making a choice may feel intimidating.
Once again, working with an experienced health insurance agent can be very helpful.
A competent agent can help you weigh the costs, benefits, and features of COBRA, a marketplace plan, and private insurance so you can make an informed choice.
Piecing the Puzzle Together
If you expect to find yourself paying for COBRA or private coverage after your divorce, consider making your future healthcare part of your divorce settlement agreement.
While it is unlikely that you'll get lifetime support for your healthcare, you may be able to get support for a long enough period that you have time to find employment, find affordable private coverage, or age into Medicare.
The most important things you can do now are:
- Know which options you might pursue
- Gather information on those options[2]
- Consult with experts as needed to understand your options
- Integrate your healthcare costs into your post-divorce budget
- Consider integrating your healthcare costs into your final divorce settlement
Besides a great health insurance agent, there are other skilled professionals you should consider having by your side through a divorce.
Watch the video below to learn about 4 Experts to Hire During a Divorce.
Fact-checking for the Medicare section kindly provided by Peter Huyhn of Trusted Benefits Group.
Robert W. Baird & Co. Inc. is not affiliated with Peter Huynh or Trusted Benefits Group.
Fact-checking for the Private Insurance or Open Marketplace section kindly provided by Priscilla Moreno, Independent Licensed Health Insurance Agent.
Robert W. Baird & Co. Inc. is not affiliated with Priscilla Moreno, Independent Licensed Health Insurance A
[1]The Consolidated Omnibus Budget Reconciliation Act gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods.
[2] Specifically, the monthly plan premium, annual deductible, co-payments, co-insurance, and out of pocket maximums. You can compare these numbers across plans.
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