Marital Disruption and Health Insurance

By H. Elizabeth Peters, Kosali Simon, and Jamie Rubenstein Taber
National Bureau of Economic Research, NBER Working Paper No. 20233, June 2014

Despite the high levels of marital disruption in the United States, and substantial reliance on family-based health insurance, little research is available on the consequences of marital disruption for insurance coverage among men, women, and children. We address this shortfall by examining patterns of coverage surrounding marital disruption. We find large differences in coverage across marital status groups in the cross-section. In longitudinal analyses that focus on within-person change, we find small overall coverage changes but large changes in type of coverage following marital disruption. Both men and women show increases in private coverage in their own names, but offsetting decreases in dependent coverage tend to be larger. Dependent coverage for children also declines after marital dissolution, even though children are still likely to be eligible for that coverage. Children and, to a lesser extent, women show increases in public coverage around the time of divorce or separation. The most vulnerable group appears to be lower-educated women with children because the increases in private, own-name, and public insurance are not large enough to offset the large decrease in dependent coverage.

New provisions in the Affordable Care Act (ACA) will increase availability of health insurance, especially through Medicaid expansions and subsidized exchange-based private coverage, and may mitigate some of the detrimental impacts of marital disruption. However, because employers are expected to remain the main source of coverage for the nonelderly population (Congressional Budget Office 2012) and because of lingering uncertainty regarding state compliance with expansions (Kaiser Family Foundation 2013), marital disruption is likely to remain a cause of instability in insurance coverage.

http://www.nber.org/papers/w20233

To no surprise, this study confirms that divorce is disruptive to health insurance coverage, especially for spouses and dependent children. That disruption is worse for more vulnerable lower-educated women with children. Since employer-sponsored coverage is expected to remain the most dominant form of insurance and most susceptible to changes due to divorce, and since many states are avoiding compliance with the intentions of improving coverage through the expansions authorized in the Affordable Care Act, and since many divorced individuals and their dependents will qualify for hardship exemptions allowing them to remain uninsured, marital disruption will remain a significant cause of being uninsured.

We are now inundated with reports about how well the Affordable Care Act is working – the glass half-full argument. What about those who will be left out because their share is in the empty half of the glass? We need a full glass – a single payer national health program – but we didn’t get it. Many divorcees and their children will be victims of our mediocre, half-assed effort (excuse me, half-glass). Well, it was half-assed and it’s time we said it.