Debunking The ‘Marriage Penalty Myth’: Why Health Reform Would Give Higher Subsidies To Single People

Britney Spears and Kevin FederlineSince discovering the federal poverty guidelines, conservative lawmakers and commentators have accused the Democrat-sponsored health care bill — which pegs affordability credits to the federal poverty standards and offers higher credits to unmarried individuals — of discriminating against married couples. “[J]amming this sort of complex legislation through Congress in the dark of night means that we are just learning about some of its more damaging provisions,” House Minority Leader John Boehner said in a statement, “including a new ‘marriage penalty’ that will cost couples that wed thousands of dollars in higher health insurance costs.”

At least two separate articles in the Wall Street Journal echoed the charge. “That’s an incentive for dual-income couples to skip the marriage ceremony altogether and continue to file as singles. For cohabitators, the savings could amount to thousands of dollars a year,” Stephen Moore argued yesterday:

Take two low-wage workers who are considering marriage. In 2016, if each has an income $11,800, they would each have to pay $248 as singles for government-approved health insurance. Married, their joint income climbs to $23,600 and they would have to pay $1,109 — a ding of more than $600 annually.

The affordability credits in the health care bills are not designed to discourage marriages (if anything progressives have been fighting to extend that right to millions of gay and lesbian Americans). Rather, the policy follows a long standing precedent which treats married people as a unit and views individuals as separate parties filing separate tax returns. This makes even more sense in the context of health care reform and affordability standards.

Unmarried individuals have fewer resources (lower incomes, more money spent on basic necessities) than married families and have a harder time obtaining and paying for health insurance coverage. In fact, since the majority of the uninsured are not married and marrying lowers uninsurance rates, providing more subsidies to individuals is a better way of targeting affordability credits to those who need them most. The following table relies on Census data from 2009:

Married Living Single
Uninsured 13,680,000 (36% of the uninsured) 24,665,000 (64% of the uninsured)
Insured 90,135,000 (60% of the insured) 60,705,000 (40% of the insured)

Ironically, the Republican health care plan introduced in the House, did not provide married or unmarried Americans with any affordable health care options or significantly lower health care costs. Conservatives have consistently voted against the affordability credits in the Senate and House health care bills and complained that reform was too expensive. Of course, if they now want to spend more money subsidizing married Americans, their recommendation may attract bipartisan support.