Costly ‘marriage penalty’ in proposed health care bill draws criticism

ppboehner Republican Leader John Boehner. / Republican Conference

Proposed health care reform could require some married couples to pay $2,000 or more compared to unmarried couples living together, prompting some leaders to criticize the “marriage penalty.” They voiced concerns the provision would discourage marriage.

The penalty arises because the planned subsidies for purchasing health insurance are tied to federal poverty guidelines. According to the Wall Street Journal, this would limit subsidies for married couples with a combined income compared to subsidies for unmarried couples.

The rules would not affect those who receive health insurance from an employer. They would only affect those who buy subsidized insurance through the new insurance exchanges set up by the legislation.

The Congressional Budget Office estimates that about 17 million people would receive such subsidies in 2016 under the House health care bill.

Under the legislation, health insurance premiums are capped for those who make less than 400 percent of the federal poverty level. The annual cost is capped at 1.5 percent of income for the poorest but increases to 11 percent of income for those closest to the cutoff.

The Wall Street Journal says that under the House bill an unmarried couple with an income of $25,000 each would have a premium cap of $3,076, but if they marry their $50,000 combined income would make their annual premium cap jump to $5,160.

In a Thursday statement House Republican Leader John Boehner of Ohio said the penalty could cost couples that marry “thousands of dollars” in higher insurance costs.

Republicans said that the effect on married couples ineligible for subsidies is even greater, possibly more than $5,000. However, other analysts point out that the figure is difficult to measure because of assumptions about the price of insurance policies.

Democratic staff who helped author the bill said the penalty exists, but they hold that it cannot be altered without creating other problems.

They said that making the subsidies neutral towards marriage would lead to a married couple with only one breadwinner receiving a larger subsidy than a single parent at the same income level.

Stacy Dickert-Conlin, an economics professor at Michigan State University, said there is a tradeoff between the progressive, equitable and marriage-neutral aspects of the bill and legislators “can’t accomplish all three.”

Jenny Tyree, an analyst at the Colorado-based Focus on the Family, told the Wall Street Journal that the legislation would penalize the poor, who she said have the most to gain from marriage.

Some conservative groups have claimed the legislation will dissuade people from marrying, but Dickert-Conlin said most research indicates people do not make decisions about marrying based on government benefits.

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