Health Insurance After Divorce: Your Options and Costs
After a divorce, securing health insurance can be a major concern, especially if you were previously covered under your spouse’s plan. Fortunately, there are several options to ensure continued coverage. Understanding these options and their associated costs is essential for your financial well-being.
1. COBRA: Temporary Coverage for Up to 36 Months
COBRA allows you to continue your spouse’s health plan temporarily, typically for up to 36 months. However, you’ll pay the full premium, including both your and your spouse’s portion, plus a 2% administrative fee. COBRA can be expensive, with premiums ranging from about $400 to $1,500 per month depending on your plan.
2. Marketplace Plans: Affordable Care Act (ACA) Coverage
Divorce typically qualifies you for a Special Enrollment Period (SEP), where you can apply for a new plan through the ACA marketplace. Marketplace plans vary widely in cost, and you may qualify for subsidies based on income. Premiums can range from about $50 to $600 per month, depending on the plan and your income.
3. Employer-Sponsored Plans: Coverage Through Your Own Job
If your employer offers health insurance, this could be a more affordable option than COBRA or marketplace plans. However, you’ll need to switch from family coverage to individual coverage post-divorce. You’ll also want to consider which spouse will provide coverage for your children, if any. Employer-sponsored plans typically cost $150 to $500 per month for individual coverage.
4. Medicaid: Low-Income Option for Those Who Qualify
If your income drops significantly after divorce, you may qualify for Medicaid, which provides free or low-cost coverage based on income and household size. Medicaid is typically free or very low-cost for those who qualify.
5. Short-Term Health Plans: Temporary Coverage
Short-term plans offer basic coverage for a limited time (up to 12 months). These plans are often more affordable but may not cover all medical needs, like pre-existing conditions. Short-term plans cost around $100 to $300 per month but offer less comprehensive coverage.
Final Thoughts
Securing health insurance after divorce is essential for your well-being, but navigating your options can be challenging. Whether you choose COBRA, a marketplace plan, employer-sponsored coverage, or another option, it’s crucial to understand the costs involved and select the best fit for your new situation.
Consulting with a Certified Divorce Financial Analyst (CDFA) or a health insurance specialist can help you evaluate your options in the context of your overall financial plan. A CDFA can provide insight into how healthcare costs fit into your broader financial goals, ensuring you make the most informed decision moving forward.
