Divorce & Obamacare: What You Need to Know About Your Rights

Divorce and Obamacare

The Affordable Care Act, or Obamacare, has impacted more than just the state of Americans' healthcare. There's one surprising area of American life that has seen significant changes since the law was passed: marriage and divorce. Family law practitioners can point to several ways that making the decision to divorce, and the financial impact of divorce, differ in the post-Obamacare era. The high cost of individual healthcare coverage is no longer a strong impetus for couples to stay married, and it doesn't drive up alimony payments as it once did. Additionally, being single can actually be more cost-efficient than being married when it comes to health insurance.

Couples Don't Stay Together Because of Healthcare

Before the ACA, many individuals were reliant on their spouses for healthcare coverage. Perhaps one member of the couple had significantly better coverage through his or her employer, or perhaps one developed an illness that would have resulted in coverage denials for having a pre-existing condition. For some people, being on their spouse's plan was simply the only way they could afford to have insurance.

Now, options for affordable individual health insurance plans have expanded, especially for people who experience a drastic change of income. Previously, COBRA temporary coverage was the only way people could maintain coverage after being dropped from an ex-spouse's insurance plan, and it was often prohibitively expensive. Though health insurance is certainly still a big practical factor that couples must take into consideration when choosing whether or not to part ways, it isn't quite the game-changer that it once was.

Obamacare Decreases Alimony

Health insurance costs are frequently part of the conversation when it comes to determining alimony (or spousal support, usually paid by the higher-earning partner), so it stands to reason that more affordable healthcare options would have an impact. Spouses can no longer effectively argue for higher payments to cover higher healthcare costs. Being eligible for government healthcare subsidies means that person isn't eligible for higher alimony payments, since they don't depend on that money for their healthcare.

Additionally, alimony payments are tax deductible for the payer, so giving alimony may end up making them eligible for Obamacare insurance subsidies themselves. All of these factors help to reduce the financial burden that can fall on the spouse required to pay alimony.

Being Single Can Be Cheaper

In some circumstances -- for example, childless married couples earning 400% over the poverty line -- under new Obamacare tax calculations, not being married can actually save you money. Despite the old trope of tying the knot for the tax benefits (which is still largely the case, especially for families that have children), a signficant number of couples now find themselves in the position of having to justify getting or staying married, knowing that it will cost them more.

In some states with higher cost of living and expensive health insurance, your joint income can be well over the bar that excludes you from receiving any Obamacare subsidies whatsoever, but you may still not be able to live comfortably and afford insurance. But if you choose to live together unmarried instead of tying the knot, you could earn more and still be able to receive healthcare subsidies. Some married couples may even consider getting divorced to save money; or, if divorce was already being considered, it could make the decision easier.

The Affordable Care Act's passing has resulted in Americans taking a new approach to many health care, which has had reverberating effects on many fundamental institutions of American life. Family law practitioners are interested in tracking how its effects on divorce and marriage continue to develop over the years, as well as what other types of changes the future of the ACA might old.