Obamacare and divorce: Who would’ve imagined a connection?
Two University of Kansas economists think they found one.
The connection has to do with what lawyers call a “medical divorce” or “Medicaid divorce.” That can happen when one partner is diagnosed with a degenerative disease or needs costly long-term care.
Without a legal divorce, treatment might rob both spouses of all they own.
The bottom line of a working paper gaining some national traction, written by KU professors David Slusky and Donna Ginther, is that divorce rates for a certain age group declined in states that expanded Medicaid under the Affordable Care Act. The economists found no such trend in states that turned down federal funds to expand Medicaid.
Among people ages 50 to 64 — the age cohort considered most likely to end a marriage so that a sick spouse can more quickly qualify for government health benefits — the dip in divorces averaged 5.6 percent where Medicaid was expanded, Slusky and Ginther calculated.
“That’s significant,” Slusky recently told The Star. “The upside is that more people who want to stay married are staying married.”
His conclusion is considered a reach among some area lawyers who handle medical divorces.
Nonetheless, National Public Radio, The Washington Post and other media outlets have shown interest in what Slusky calls a “perverse incentive” built into pre-Obamacare Medicaid eligibility rules that drive some happy marriages to Splitsville.
You’ve heard the familiar talking points in the debate over Republican efforts to “repeal and replace” the 2010 Affordable Care Act: pre-existing conditions, individual mandates, the overall cost of health care and whether parents’ insurance ought to cover their children up to age 26.
But keeping couples married?
In probing that question, Slusky and Ginther recognized a golden research opportunity that economists and behavioral psychologists have been mining since Obamacare took effect in 2014 — the statistical ability to compare and contrast.
Most states took advantage of increased federal aid to broaden their Medicaid programs. But roughly 20 states declined, creating a researchers’ playground for studying Americans’ health, welfare and behavior in “expansion” states versus “non-expansion” states.
Last month the Kaiser Family Foundation updated its tally of such studies, 108 and counting.
But comparing one type of state against another is not a simple, black-and-white thing, experts caution.
Consider Kansas and Missouri. Though both are non-expansion states, they use different criteria in determining Medicaid eligibility.
Kansas allows some low-income persons needing care to qualify for the federal aid even if their household assets — including home, automobile and business property — are substantial. In Missouri, more than 20 Medicaid plans provide various exemptions on assets ranging from livestock to life insurance plans.
In any event, “divorce is almost never the right financial option,” said elder law attorney Samantha Shepherd, who practices in both states.
Slusky, who is 33 and married, said a New York Times column in 2009, headlined “Until Medical Bills Do Us Part,” sparked his interest in medical divorces. The article explored the wrenching decision of a healthy wife considering legally separating from her husband, who had been diagnosed with early-onset dementia.
By shifting their shared assets to her side, the divorced husband could become poor enough to qualify for Medicaid while she would remain financially secure in retirement.
It doesn’t happen often, said Overland Park lawyer Linda Tabory.
In 20 years of practicing law with an emphasis on helping elderly clients, Tabory recalled only one couple in the 50-64 age group who opted to split solely to put one spouse on a faster track for Medicaid eligibility.
“At least in the Midwest, a lot of people are opposed to that on religious grounds,” said Tabory. “There may be pockets where these divorces are quietly happening. In my world it’s not happening.”
Kansas City lawyer Stacey Janssen said many couples who choose such a breakup often are reluctant to discuss it with others. Some will file court papers in another county to keep their neighbors from learning of the divorce, she said.
“Medicaid divorces are not regular, but they’re not rare, either,” she said. “I’ll handle a few each year.”
The Affordable Care Act enabled participating states to expand Medicaid to cover all adults with incomes up to 138 percent of the poverty line, regardless of assets such as home equity, retirement savings, vehicles and stock plans.
The law’s undoing of asset limits prompted Slusky and Ginther to examine divorce rates, state by state, from 2008 to 2011 — pre-Obamacare, that is. They gathered the same data for the first year after Medicaid expansion took effect in some states.
The economists limited their analysis to people ages 50 to 64 because that group includes couples married many years, often building substantial assets, and who run a higher risk of being struck with a degenerative medical condition.
“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,” concluded their working paper published by the National Bureau of Economic Research.
Future years are in question as Congress tries to redo the law.
Citing the KU study, The Washington Post last week reported that the GOP plan offered up by House Speaker Paul Ryan would restore limits on a person’s assets to qualify for federal aid.
“This could contribute to a rise in these medical divorces once again,” the Post said.