Call it the “healthcare bill blowup of the week.” The Wall Street Journal broke news today that, in certain tax brackets, married couples would pay thousands of dollars more for annual insurance premiums than their counterparts living in sin (so to speak). This is for the same insurance plan. The Congressional healthcare overhaul is certainly well-intentioned, but I guarantee this story will be injurious to public perception of the bill if it really takes off. Both the House and Senate versions of the healthcare bill have a built-in “marriage penalty” for middle-class households.
How did this happen? According to the WSJ story, the disparity came about at least in part because of the fact that “
subsidies for purchasing health insurance under the plan from congressional Democrats are pegged to federal poverty guidelines.” Therefore, a married couple with a combined income loses out in comparison to two adults living together who both claim single status for tax purposes.
Americans who already receive their insurance coverage through an employer will not be affected if such a healthcare plan were to take effect, only those buying subsidized healthcare plans through the government. The Congressional Budget Office projects that number to be seventeen million American nationals in 2016. Under both bills, those households making less than four hundred percent of the federal poverty cut-off would be eligible for subsidies ranging from one point five percent of their income at the lowest end to eleven percent at the top end. Take, for example, a pair of adults cohabiting who bring in a combined total of fifty thousand dollars a year. If they are unmarried, their combined premiums would be capped at around three thousand dollars a year. A married couple making the same amount would be expected to pay over fifty-one hundred dollars. That’s under the Republican version of the bill. The Senate bill would lead to a slightly smaller disparity, but not by much.
The Democratic lawmakers who wrote the bill this way do not deny that there is a marriage penalty, but claim that it cannot be fixed because any way of doing so would only create inequities elsewhere. If they were to make the subsidy amounts completely neutral to marriage, for instance, a married couple would receive a larger subsidy than a single parent working to make the same amount of money. An unnamed Democratic Senate Finance Committee aide quotes by the Journal stated that “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.”
The healthcare bill is far from the only government program to contain stipulations penalizing the married. For instance, marriage negatively impacts a family’s ability to obtain welfare benefits or claim the earned income tax credit as compared with households containing two unwed adults. An economics professor at Michigan State University, Stacy Dickert-Conlin, claims that it is impossible to have legislation be “progressive, equitable and marriage-neutral” all at the same time. But both conservative thinkers and family advocacy groups are concerned over the prospect of anything discouraging poor couples from marrying. It could be the case that people choose a different date for their nuptials – say, the beginning of the year versus December – to maximize their tax benefits, experts claim, but it is unlikely that people will actually not marry based on government benefits. There is no evidence to support this, supposedly.
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