ObamaCare’s Marriage Penalty

By:  Michael Tennant
ObamaCare’s Marriage Penalty

Add ObamaCare to the list of federal laws penalizing marriage, in this case by reducing health insurance subsidies as household income increases.

Federal law already discourages marriage via welfare payments to single mothers and higher tax rates for married couples. And starting in January, ObamaCare will pile on one more disincentive to tying the knot: higher health insurance costs for couples who marry.

The healthcare law’s individual mandate requires every American to have health insurance or pay a tax penalty. Those whose employers do not offer “affordable” coverage must obtain coverage on their own.

Depending on one’s income level, coverage not obtained through an employer may be subsidized, in whole or in part, by the federal government. Households with incomes under the Federal Poverty Level (FPL) will be covered by Medicaid. Households with incomes between 100 percent and 400 percent of the FPL will be given subsidies in the form of refundable tax credits to help offset the cost of private coverage. Everyone else will have to pay his own way.

The tax-credit subsidies are intended to serve as a cap on the amount of household income that a family must pay for a specified level of government-approved health insurance. The subsidy starts high so that a family earning 100 percent to 133 percent of the FPL will only have to pay 2 percent of their income for coverage, then gradually decreases as income increases, with a family earning between 300 percent and 400 percent of the FPL shelling out 9.5 percent of their income in premiums.

Here is where the marriage penalty comes in. According to CNSNews.com’s Terence P. Jeffrey, “Married couples seeking the subsidy are required to file joint tax returns and whether their premiums are capped or not is determined by the couple’s combined income. The law thus imposes a steep penalty on Americans who live in traditional families.”

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