After a divorce, many governmental institutions are forced to look at the primary custodial home as a single-parent household and attempt to navigate the economic consequences of a decision they had no part in. This is especially true for low-income households.
Because of the nature of the division of assets, financial loss is virtually inevitable. Many who previously did not need support or government-funded programs now may require them, due to the end of their previous economic situation. These people are forced to lean on programs like Medicaid, while figuring out their new life after a divorce.
Medicaid is a jointly-funded, Federal-State health insurance program for low-income individuals, according to the Social Security Administration. It covers children, blind and/or disabled individuals, and other people who are eligible to receive federally assisted income maintenance payments.
In order to qualify, a recipient must still be disabled, have been eligible for a supplemental security income (SSI) cash payment for at least one month, need Medicaid in order to work, still meet all other eligibility rules, including the resource test, and have a gross earned income that is insufficient to replace supplemental security income, Medicaid, and any publicly funded attendant care.
Because of the circumstances that you need to be facing in order to qualify for Medicaid, many who have endured financial losses may find themselves relying on the program. Since child support is determined by which formula the states choose to employ, the remaining income, after child support is taken out, may require you to rely on Medicaid and other government programs.
However, within the last few years, there have been changes to the way that child support interacts with Medicaid, thanks to the Affordable Care Act. According to the Office of Child Support Enforcement, child support’s role in the Medicaid program continues to evolve when parents and/or their children are eligible.
The jurisdiction of where the child support is being received plays a factor into the qualifications of Medicaid. The custodial parent receiving the child support may opt to not seek an order to provide additional coverage or enforce an existing order asking for additional coverage.
Neither parent should be ordered to seek medical coverage for their child through the Marketplace when the child is eligible for or enrolled in Medicaid, due to the fact that that would no longer make the parents eligible for the premium tax credit or cost-sharing reduction subsidies to help pay for Marketplace coverage.
An order can be pursued for the custodial parent to apply for medical coverage, including the Children’s Health Insurance Program (CHIP) and Medicaid, on behalf of their children.
It is important for a custodial parent to consider how ordering additional coverage for a child eligible for Medicaid or CHIP may impact the amount of, or compliance with, the child support order. It may cause the child support amounts to be adjusted, impacting the household as a whole.
Speaking of custody, noncustodial parents may be impacted through any potential court orders to provide additional medical coverage for a child that already is covered by Medicaid. It may impact the amount of child support noncustodial parents can pay or their willingness to comply with the child support order itself.
Not only are the ins and outs of eligibility subject to change, the definition of a Medicaid household also is subject to the changes created by the Affordable Care Act, more specifically as it concerns a specific child.
According to the Office of Child Support Enforcement, a child’s Medicaid household is comprised of the child and all siblings and parents living with the child (including stepparents, and step and half-siblings). If the child’s parents are unmarried but both live in the same household as the child, the child’s Medicaid household includes both parents.
However, a noncustodial parent living away from their child in a different location is not part of the child’s Medicaid household. If the noncustodial parent claims the child as a dependent for federal tax purposes, the child is part of the noncustodial parent’s household for purposes of determining eligibility for premium tax credits and cost-sharing reductions for Marketplace insurance.
The Affordable Care Act also inspired several more changes, including a provision stating that individuals who live together may be part of different Medicaid households based on their relationship to one another. In addition, an individual’s Medicaid household may be different from his household for premium tax credits and cost-sharing reductions for Marketplace coverage.
Under the Affordable Care Act, Medicaid eligibility is determined based on the Medicaid household’s modified adjusted gross income. This does not include the child support that it receives.
This affects many low-income, noncustodial parents, as well. Those that pay child support may be eligible for Medicaid if their state of residence opted to expand Medicaid. In addition, those who would have been eligible for Medicaid if their state had expanded Medicaid are exempt from the Affordable Care Act’s individual responsibility provisions, which state that all adults and members of their family must either have minimum essential covers; have an exemption from the requirement to have minimum essential coverage; or make an individual shared responsibility payment when they file their federal income tax return.
Understanding how Medicaid impacts child support is important for custodial and noncustodial parents alike. Low-income custodial and noncustodial parents need to understand how their financial status affects Medicaid eligibility and insurance, as well as how it can interact with the child support that their shared children require.
Dan Pearce is an Online Editor for Lexicon, focusing on subjects related to the legal services of customers, Cordell & Cordell and Cordell Planning Partners. He has written countless pieces on MensDivorce.com, detailing the plight of men and fathers going through the divorce experience, as well as the issues seniors and their families experience throughout the estate planning journey on ElderCareLaw.com. Mr. Pearce has managed websites and helped create content, such as the Men’s Divorce Newsletter and the YouTube series, “Men’s Divorce Countdown.” He also has been a contributor on both the Men’s Divorce Podcast and ElderTalk with TuckerAllen.
Mr. Pearce assisted in fostering a Cordell Planning Partners practice area specific for Veterans, as they deal with the intricacies of their benefits while planning for the future. He also helped create the Cordell Planning Partners Resource Guide and the Cordell Planning Partners Guide to Alternative Residence Options, specific for seniors with questions regarding their needs and living arrangements.
