NCPA - National Center for Policy Analysis


January 8, 2010

Some married couples would pay thousands of dollars more for the same health insurance coverage as unmarried people living together, under the health insurance overhaul plan pending in Congress, says the Wall Street Journal.

The built-in "marriage penalty" in both House and Senate health care bills has received scant attention.  But for scores of low-income and middle-income couples, it could mean a hike of $2,000 or more in annual insurance premiums the moment they say "I do."

  • The disparity comes about in part because subsidies for purchasing health insurance under the plan from congressional Democrats are pegged to federal poverty guidelines.
  • That has the effect of limiting subsidies for married couples with a combined income, compared to if the individuals are single.
  • People who get their health insurance through an employer wouldn't be affected.
  • Only people that buy subsidized insurance through new exchanges set up by the legislation stand to be impacted.
  • About 17 million people would receive such subsidies in 2016 under the House plan, the Congressional Budget Office estimates.

The bills cap the annual amount people making less than 400 percent of the federal poverty level must pay for health insurance premiums, ranging from 1.5 percent of income for the poorest to 11 percent at the top end, under the House plan:

  • For an unmarried couple with income of $25,000 each, combined premiums would be capped at $3,076 per year, under the House bill.
  • If the couple gets married, with a combined income of $50,000, their annual premium cap jumps to $5,160 -- a "penalty" of $2,084.

The disparity is slightly smaller in the Senate version of health care legislation, chiefly because premium subsidies in the House bill are more targeted towards low-wage earners, says the Journal:

  • Under the Senate bill, a couple with $50,000 in combined income would pay $3,450 in annual premiums if unmarried, and $5,100 if married -- a difference of $1,650.
  • Republicans say the effect on married couples whose combined income makes them ineligible for subsidies is even greater -- up to $5,000 or more -- but that is more difficult to measure because it includes assumptions about the price of insurance policies.

Source: Martin Vaughan, "Married Couples Pay More Than Unmarried Under Health Bill," Wall Street Journal, January 6, 2010.

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