If you’re navigating a divorce, it’s undeniably a challenging time. And in the middle of it all, you’ll have to make a flurry of decisions, some of which you may not have had to consider in a long time. One of these important decisions has to do with your health insurance plan. You want to make sure you have adequate healthcare provisions for yourself and your children after the divorce is final.
Some people find themselves without health coverage after their divorce. But healthcare insurance coverage is critical to the health and well-being of yourself and your minor children. Without it, you may not have access to your doctors if you get ill. An emergency could leave you financially devastated.
Even if your ex-spouse maintains coverage for your kids as part of your divorce settlement, you will need to find health insurance for yourself.
How do you find the right health insurance coverage for yourself after divorce? What happens if you can’t afford what you find?
Your right to continue health insurance after divorce
After divorce, you have several options for health insurance.
If your ex’s group policy at work covered you before your divorce, you may be able to get temporary coverage through COBRA (Consolidated Omnibus Budget Reconciliation Act). COBRA is a program that allows a worker or family member to continue getting healthcare benefits temporarily after a life change. COBRA healthcare coverage can last up to three years or until you can get other coverage on your own – but it can be very expensive.
Options you might consider beyond COBRA include the following:
- Getting insurance coverage through your employer, if you are employed
- Shopping for a personal health insurance policy through a private insurer or on the Affordable Care Act Marketplace
- Applying for Medicare if you are over 65
- Applying for Medicaid if you qualify
How to know if you qualify for Medicaid
Healthcare coverage can be costly, and after your divorce, you may find that you can’t afford healthcare for yourself and your children. Medicaid might be an option in this case.
Medicaid is a government program that provides health coverage to adults with limited income and resources, children, elderly adults, and people with special needs. Medicaid is funded jointly by states and the federal government. Every state offers some form of coverage to eligible individuals and their families.
Because each state administers its own Medicaid program, eligibility can vary from state to state. You can find your own state laws about Medicaid eligibility requirements here.
Learn the application steps
It can take time before you are approved for Medicaid benefits. Even if you're unsure if you qualify, you'll want to submit an application to get the process started as soon as possible.
Depending on where you live, you may be able to submit your application online, by paper application, or in person at your local office. You can get more information by contacting:
- HealthCare.gov
- The Marketplace Call Center at 1-800-318-2596
- Your state or local office
Many applications are turned down because of incomplete information. Before submitting your application, double-check it to make sure it’s complete and accurate. The required supporting documentation must be included.
When submitting your application, you’ll need to include documentation that does the following:
- Proves your age
- Proves your citizenship or alien status
- Proves all income sources, including paystubs, tax returns, SSDI, retirement benefits, or any other income you receive
- Proves your assets and financial resources
- Proves any disability
- Proves your residence
- Provides proof of any other insurance you have, including Medicare
Once you’ve submitted your application, it will be reviewed by a caseworker who will determine whether you are eligible for benefits. Your state is required to respond to all applications within 45 days of submission or 90 days for disability applications.
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FAQ about Medicaid and divorce
Do marital assets impact my Medicaid eligibility?
To qualify individuals for benefits, Medicaid looks at the value of their assets. If you’re married, this will include assets that both of you own, even if they are in separate accounts or held under separate names. After divorce, your eligibility will be based on your assets alone but will be subject to anything you receive in your marital settlement agreement.
Keep in mind that not all assets are considered “countable” under Medicaid eligibility. Medicaid doesn’t count the value of many of your assets when determining your eligibility, including the following:
- Your primary residence, up to a specific value
- One car
- Household goods and personal items
- Burial spaces or other burial funds
- Life insurance policies
- Other real or personal property used for business or trade that you use to self-support
Can Medicaid cover me retroactively?
Medicaid historically had a provision that covers medical expenses for up to three months prior to application if the applicant would have been eligible at that time. But many states have now limited or eliminated retroactive coverage. You will need to check with your individual state’s guidelines to see if your state still offers retroactive coverage and under what conditions.
What if Medicaid rejects my application?
Unfortunately, many Medicaid applicants are denied after their initial application for insufficient information and documentation. If your application is rejected, you have the right to appeal.
Some states require that an appeal be made in writing, while others don’t. Your denial notice will detail your own state’s rules. Once your appeal has been submitted, you’ll appear at a hearing and be allowed to prove why your denial was incorrect. If you win the hearing, your Medicaid benefits will be applied retroactively from the time of your initial application.
What is a “Medicaid divorce?”
Nursing homes and other special needs care, including long-term care, can be expensive and can quickly deplete a couple’s assets. Medicaid can be an essential resource if you or your spouse require this care for a condition like Alzheimer’s disease or a similar disorder. But in order to qualify for Medicaid assistance, you must be able to show significant financial need. Because Medicaid eligibility considers all marital assets for eligibility, it can prevent some married individuals from getting the help they need to pay for these important services.
The premise behind a “Medicaid divorce” is that, through the divorce process, assets get transferred to the healthy spouse to reduce the countable assets of the spouse applying for Medicaid benefits. But Medicaid divorces are real divorces. Once the final judgment is signed, the couple is officially divorced, and there are risks to consider. Furthermore, divorce can affect other important benefits, including Social Security retirement benefits, Supplemental Security Disability Income, survivor’s benefits, and veteran’s benefits.
Before considering a Medicaid divorce, married couples trying to find assistance for a sick or special needs spouse should get legal advice. There may be other planning strategies to assist them that don't require a divorce.
Going through a divorce can be overwhelming in the best of cases. At Hello Divorce, we’re here to help you no matter where you are in the process. We offer professional services, divorce plans, and a library of resources to help you along the way.
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