NCPA - National Center for Policy Analysis


May 6, 2010

Thanks to ObamaCare, some couples can save thousands on health insurance just by opting to cohabitate rather than marry.  How?  The subsidy system erected in the complicated new health law manages to create a brand new "marriage penalty," says the Heritage Foundation.  

Under the law: 

  • Individuals who earn between 133 and 400 percent of the federal poverty level and cannot get health coverage through their employers qualify for subsidies to buy insurance in the government-run exchanges.
  • However, as Diana Furchtgott-Roth of the Hudson Institute recently remarked, the subsidies are structured so that two people can get more subsidies to buy insurance as singles rather than as a married couple.  

For example: 

  • Two people making $43,000 each both qualify for subsidies as singles.
  • If they marry, their combined earnings of $86,000 far exceed the $58,000-cut-off for aid to a couple. 

Also observed by Heritage analyst Robert Rector in an analysis of the Senate-passed version of ObamaCare: 

  • For two young individuals making a combined $35,000, marriage would result in a loss of $3,451 in government aid.
  • For older couples, the effect is more pronounced; for example, two individuals in their sixties making a combined $60,000 would receive an additional $10,425 to purchase insurance if they become or remain single.
  • The reconciliation bill made slight modifications to the subsidy system, but the marriage penalty remains substantially intact. 

Who suffers most from marriage penalties?  Single mothers.  They head up 45 percent of all families living in poverty.  For the sake of these women and their children, Washington should embrace policies that encourage marriage, rather than punish it, says Heritage. 

Source: Kathryn Nix, "Stay Single and Save 15 Percent or More on Health Insurance," Heritage Foundation, May 3, 2010. 

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