• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Side Effects: Stay Single and Save 15 Percent or More on Health Insurance

    No, this isn’t a Geico commercial.  Come 2013, America’s bachelors may want to think twice before popping the question.  Thanks to Obamacare, some couples can save thousands on health insurance just by opting to cohabit rather than marry.

    How?  The subsidy system erected in the complicated new health law manages to create a brand new “marriage penalty.”

    Under the law, individuals who earn between 133 and 400 percent of the federal poverty level and can’t get health coverage through their employers qualify for generous subsidies to buy insurance in the government-run exchanges.  These subsidies decrease with need, so the more you make, the less you get.

    But, as Diana Furchtgott-Roth of the Hudson Institute recently remarked, the subsidies are structured so that two people can get more government as singles rather than as a married couple.

    Furchtgott-Roth gives the example of two people making $43,000 each.  As singles, they both qualify for subsidies, but if they marry, their combined earnings of $86,000 far exceed the $58,000-cut-off for aid to a couple.

    Heritage analyst Robert Rector raised a red flag about this problem back in January in an analysis of the Senate-passed version of Obamacare.  He showed that 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: 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 be embracing policies that encourage marriage, rather than punish it.  As Furchtgott-Roth notes: marriage promotes a stable society; penalizing it will “increase the number of fatherless families, leading to more poverty and a lower quality of life.”

    To help low and middle-income families purchase insurance, Congress should have created an equitable and universal tax credit.  To learn more, click here.

    Posted in Education [slideshow_deploy]

    8 Responses to Side Effects: Stay Single and Save 15 Percent or More on Health Insurance

    1. Elizabeth, Iowa City says:

      Could this be avoided by the marry and file separately thing?

    2. Alex, Disctrict of C says:

      And if you call Geico, 15 minutes could save you 15 minutes or more on car insurance.

    3. Ron P., Massachusett says:

      Actually, this is just icing on top of the cake if Mom is not working. I know someone who was making $48,000. She became pregnant by someone making about $45,000. They didn't marry. He is on the hook for almost $20,000 in child support, but she gets WIC support, heavily subsidized healthcare for herself and child, and Foodstamps, plus subsidized rent and utilities. She is also elegible for a free cell phone with free minutes of use, and whatever other goodies she can suck out of the system. She has more discretionary income now than she had when working.

    4. George A. Roets says:

      This administration got the bill it wanted. The logic and intent is clear….discourage marriage……discourage success…..delay taking responsibility…..force private insurance out because of cost….create more government watchdogs to oversee ……raise taxes and provide subsidies to share more of the remaning wealth with those who will vote to continue to be taken care of.

    5. Susan Winther, Mount says:

      This is just another example of how little we were told about this law before it was passed. And, another example of how "untransparent" this administration is working. We must insist that all legislation should be read by our representatives, and not to "wait until it is passed to find out what's in it." Please don't stop giving us the unvarnished truth so we can make informed decisions at the ballot box in November. Thank you.

    6. Pingback: Unintended or Intended Consequences? « Thinking in Christ

    7. Dona of Florida says:

      RonP_ If she is getting $20k a year in child support, she would not qualify for any of the programs you mentioned.

    8. Dona of Florida says:

      Susan, maybe YOU should have read the bill.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×