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Affordable Care Act May Have Lowered Divorce Rate

Affordable Care Act May Have Lowered Divorce Rate

By: M. Scott Gordon

The Affordable Care Act (ACA), also known as Obamacare, has allowed many Chicago residents to obtain health insurance, and there is a possibility that it actually may have reduced the rate of divorce among older adults, according to a recent article in MedicalXpress.com. That article cites a recent working paper by researchers at the University of Kansas who suggest that, prior to the ACA taking effect, seniors were making the decision to get a “medical divorce.” After the ACA made changes to the way that benefits and costs for care work, the rate of these “medical divorces” declined. If the ACA is now in peril, will we soon see a new rise in divorce rates among the elderly linked to health care issues?

What is a “Medical Divorce”?

You might be asking yourself: what is a medical divorce? It is not a legal term, but rather one that refers to a couple’s decision to get divorced based on healthcare costs. This practice was described in detail in a 2009 article in The New York Times, which explained how this might work. When an older couple learns that one of them will require expensive long-term care, they need to start thinking about how it will impact their savings and their eligibility for Medicaid. Whether one spouse is eligible for Medicaid is a determination that is made after taking a look at all of the assets of both spouses. After leaving some assets for the healthy spouse, the rest of the couple’s assets (including savings, 401(k) accounts, etc.) must be “spent down” in order for Medicaid to cover long-term care.

What happens, often, is that nearly all of the couple’s assets will go toward the care costs for the spouse in need of long-term care. As a result, the healthy spouse can be left with almost nothing. Given that many people require long-term care shortly after retirement age, the costs of Medicaid can leave the healthy spouse without enough money to live on for decades. As such, many older couples decide to divorce so that the healthy spouse can retain some of the savings or retirement account funds. There is a “look-back period,” in which the assets of the healthy spouse can be seized if it is clear that the divorce took place for the sake of medical costs and not for irreconcilable differences. In the long run, however—especially when one spouse is diagnosed with an illness that will result in increasing costs over the coming years—spouses ultimately decide that divorce is the best option.

Could Health Insurance Options Alter the Rate of “Medical Divorces” in Chicago?

In 2013, three years after the ACA had taken effect, an article in MarketWatch suggested that the healthcare law could result in a decrease in divorces resulting from medical costs. Now, the researchers at the University of Kansas are contending that such a thing has indeed occurred. The working paper was written by two economists at KU, and it was distributed last month by the National Bureau of Economic Research.

David Slusky, an assistant professor of economics, and Donna Ginther, a professor of economics, are that “states that did expand Medicaid under the 2010 Affordable Care Act experienced a 5.6 percent decrease in the prevalence of divorce among people ages 50-64, compared with those states that did not expand.” The Affordable Care Act not only provided a way for many more Americans to obtain health insurance coverage, but it also shifted Medicaid asset limits, attending to the precise type of problem discussed in the 2009 article in The New York Times.

According to Slusky and Ginther, the decrease in the divorce rate in states that expanded Medicaid “suggests that Medicaid without asset limits for low-income individuals significantly reduced the incidence of divorce, strongly suggesting that medical divorce was reduced in the first year of the Affordable Care Act.” As the article explains, the ACA Medicaid expansion provided coverage for “all adults younger than 65 with incomes up to 138 percent of the poverty line regardless of their assets.” As such, the need for “medical divorce” in order to shield the assets of the healthy spouse may not have been necessary after the ACA took effect.

Contact a Chicago Divorce Lawyer

If you have questions about healthcare issues and your divorce, an experienced Chicago divorce lawyer can help. Contact M. Scott Gordon & Associates today for more information.