Tuesday, September 8, 2009

Medical Bills and Divorce

I try very hard to avoid politics on this blog and do not offer the following for its political content. Still, it is hard to see how an op/ed piece from The New York Times relates to family law.  It is that health care affects family law. This past Thursday I was in Clinton County  defending a case where there were unpaid medical bills.

The scenario described in Until Medical Bills Do Us Part is different from any I have encountered - so far:

The hospital arranged a conference call with a social worker, who outlined how the dementia and its financial toll on the family would progress, and then added, out of the blue: “Maybe you should divorce.”

“I was blown away,” M. told me. But, she said, the hospital staff members explained that they had seen it all before, many times. If M.’s husband required long-term care, the costs would be catastrophic even for a middle-class family with savings.

Eventually, after the expenses whittled away their combined assets, her husband could go on Medicaid — but by then their children’s nest egg would be gone, along with her 401(k) plan. She would face a bleak retirement with neither her husband nor her savings.

Yes, that scenario is very likely and the likelihood increases the less estate planning done by the family.  With many in Indiana with no health insurance or too little health insurance, even less catastrophic medical bills lead many into bankruptcy.  With divorce decrees placing a duty on the parents that is in the nature of support, bankruptcy may solve the problem.  For why bankruptcy may not solve the problem, see my What happens when your former spouse files bankruptcy on a marital debt?.

I think in Indiana it may be more common for people to stay married for insurance purposes. 

I also seized on the following as yet another reason why fault divorce is not a good idea (and why so many states got rid of it):
M. still helps her husband and, quietly, continues to live with him and care for him. But she worries that the authorities will come after her if they realize that they divorced not because of irreconcilable differences but because of irreconcilable medical bills. There were awkward questions from friends who saw the divorce announcement in the newspaper.

“It’s just crazy,” she said. “It twists people like pretzels.”
Fault divorce has the effect of turning honest people into perjurers.

I do not know that health care reform will solve the problems created when health care issues impact the family law system but I do think it may improve the situation.  Of course, the devil awaits in the details.

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