Health Care Reform Favors Cohabiting Couples

By Susan Brinkmann, OCDS
Staff Journalist

Although it has received little attention, provisions in the health care reform plan pending in Congress will cause scores of low- and middle-income couples to pay up to $2000 more for health insurance than unmarried couples who live together.

According to the Wall Street Journal (WSJ), subsidies for purchasing health insurance are decided based on federal poverty guidelines, which limits subsidies for married couples with combined incomes compared to single individuals.

For instance, under the House bill, the combined premiums of an unmarried couple who each make $25,000  would be capped at $3,076 per year. If the couple gets married, their combined income of $50,000 would force their annual premium cap to jump to $5,160 — a “penalty” of $2,084.

The same penalty occurs under the Senate version, but the penalties are slightly smaller. 

Staffers who helped write the bill confirmed the existence of the penalty, but said it cannot be remedied without creating other inequities. For example, making the subsidies neutral toward marriage could result in a married couple with only one bread-winner getting a more generous subsidy than a single parent at the same income level.

“The Finance Committee, along with other committees in the Senate, took pains to craft the most equitable overall structure possible, and that’s what we have here,” a Democratic Senate Finance Committee aide told the WSJ.

The only reason why this marriage penalty has not received more attention from opponents of the current health care reform packages is because larger issues such as increased taxes, deficit spending and abortion funding are overshadowing it.

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