Navigating Health Care Costs in Divorce

Health insurance form and dollars on the table.

If you are wondering what will happen to your health insurance coverage upon divorce, you are not alone.  It is no secret that the cost of individual coverage is rising, and uncertainty about the continuation of the Affordable Care Act “Obamacare” post-election has left many people concerned, especially those with pre-existing conditions.

The latest estimates, as reported by the Chicago Tribune, are that Illinois rates will increase by an average of 44 percent for the lowest-priced individual bronze plans, 45 percent for the lowest-priced silver plans and 55 percent for the lowest-priced gold plans.  Higher-level plans, such as gold plans, typically have higher monthly costs and lower out-of-pocket costs than lower-level plans.

So, if you are currently going through a divorce, how do you even begin to navigate what you should anticipate for heath care costs going forward, and how do you face the possible reality that obtaining health insurance might be more difficult and expensive then you ever imagined?

The only answer we have at this point is good planning.  If you are unable to obtain health insurance through an employer, do not leave the negotiations regarding the amount of money you will need for health insurance coverage as an afterthought. Confirm with your spouse’s employer what the exact cost of you obtaining COBRA will be, and compare these costs to the coverage you can currently obtain on the Illinois exchange.  One great tool for doing this is www.healthcare.gov, where you can enter your income level to see how much plans might cost after tax credits and view your preferred hospitals and doctors to see if they are in-network on each plan. Once you have confirmed these costs, work with your attorney to make sure that these costs are accurately reflected on your Financial Affidavit so that the number you use for this expense reflects the actual costs you will face on your own, and you are not left with insufficient funds to cover the cost of your medical insurance. Remember that if you do elect COBRA, it is only an option for 36 months, and therefore, you will be faced with a new plan down the road.

Beyond the financial planning that you need to consider, an examination of your current doctors and whether they will be covered on your new plan is crucial. In fact, only one insurer, Blue Cross and Blue Shield, is offering PPO plans on the Illinois exchange next year, down from five this year.

The world of health insurance is complicated and changing fast.  Making sure your attorney accurately reflects this need/cost in negotiations is one of the smartest investments you can make both in your physical health and  in your financial health as you move forward post-divorce.

This entry was posted in Divorce, Health Benefits and tagged , .
Anne Prenner Schmidt

About Anne Prenner Schmidt

Anne Prenner Schmidt uses her acute business acumen to guide individuals through the complex division of retirement plans regarding family law matters. Prior to joining Schiller DuCanto & Fleck in 2015, Anne focused her practice on compliance of employee benefit plans and executive compensation arrangements. She frequently advised clients on Internal Revenue Code, ERISA, HIPAA, COBRA, the Affordable Care Act and other federal statutes. Anne understands the importance of retirement plans in association with divorce and helps clients navigate the multifaceted issues involved.

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