Health insurance after divorce

In the traditional marriage where the husband is the main wage earner, one concern is maintaining health insurance for the ex-wife after divorce.

It is not uncommon for women over 40 years of age to develop severe health problems. Some become almost uninsurable, at least at a reasonable cost. This is a real concern where, all of a sudden, they are on their own and responsible for acquiring health insurance.

The Older Women’s League (OWL) worked hard to get the Consolidated Omnibus Budget Reconciliation Act (COBRA) law passed in 1986. It allows women to continue to get health insurance from their ex-husband’s company if it has at least 20 employees, for three years after the divorce. The normal COBRA provision states that, if an employee is fired or leaves a job, he or she can get health insurance from that company for 18 months. However, in a divorce, it is extended to 3 years or 36 months.

Linda and Bob are getting divorced. Assume that Linda decides to continue health insurance under COBRA from Bob’s company. Linda must pay the premium as agreed. If she misses a premium payment, the health insurance company can drop her and they do not need to reinstate her. So, she must pay that premium on time. Typically, Linda will not get the discounted group rate but will be charged the full rate. It is important to shop for health insurance, even though the COBRA provision may supply a quick solution to health care coverage, it may not be the best. It may be purchased at a lesser cost somewhere else.

Linda should shop for health insurance because if she can match the rate from Bob's company or get a lower premium with another company, she should buy her own. Then if something happens, as long as she pays her premiums, she is covered. Otherwise, at the end of three years, COBRA drops her, and then she has to start shopping for her own insurance. By that time, she might be uninsurable and not able to find insurance at a decent cost.