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Without DOMA, It Will Be Easier For Many Same-Sex Couples To Afford Obamacare Benefits

By Tara Culp-Ressler on June 26, 2013 at 11:50 am

"Without DOMA, It Will Be Easier For Many Same-Sex Couples To Afford Obamacare Benefits"

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(Credit: CNN)

On Wednesday morning, the Supreme Court ruled that the Defense of Marriage Act (DOMA) is unconstitutional. While the decision doesn’t ensure marriage equality in states that have not already agreed to extend it to same-sex couples, Wednesday’s ruling does have important implications for the federal benefits that LGBT couples may receive under equal protection — including health care benefits.

While the full consequences of the decision are not clear, married same-sex couples who reside in states with marriage equality will be able to receive a tax deduction on dependent employer-sponsored coverage. Couples will also be able to jointly apply for subsidies to purchase health insurance coverage through the marketplaces established under the law.

But gays and lesbians residing in states where their marriages are not recognized may not be eligible for credits, since the IRS typically makes that determination by looking to the state where a couple lives, not where the marriage is performed. In a statement heralding the Court’s decision, however, Obama suggested that the administration will “review all relevant federal statutes” to ensure same-sex couples are treated equally.

What does that mean? Essentially, when Americans get health care through their job, their employer pays part of the premium for that insurance plan. Many of those Americans may opt for a family plan that also covers their spouse. Under the current federal tax code, Americans can’t be taxed on the amount of money that their employer puts toward covering the cost of their spouse’s premium. But, while DOMA stood, the federal government couldn’t count same-sex couples as part of that rule. LGBT couples who were legally married ended up being taxed more for their health care than straight couples who were legally married. Now that DOMA is gone, some married same-sex couples won’t pay the federal government more for sharing the same health plan.

DOMA’s demise may indirectly affect LGBT individuals’ ability to afford health benefits, too. Once same-sex couples aren’t denied the same types of other federal tax benefits and worker protections that they were under DOMA, their financial stability will probably be improved. The current discrimination against LGBT people is one of the biggest reasons that they are disproportionately likely to be low-income, unemployed, and uninsured.

Even outside of the DOMA decision, Obamacare already helps ensure that LGBT couples will have better access to the health care they need. Obamacare’s state-levels health insurance marketplaces will not be allowed to discriminate based on sexual orientation or gender identity. As states design their marketplaces, some of them are taking extra steps to ensure LGBT protections under the health law. Obamacare’s consumer protections also take significant steps forward to help Americans living with HIV, now that insurers can’t discriminate against HIV-positive individuals and HIV drugs will be more affordable.

Update

This post has been updated with more details about the consequences of the Court’s decision.

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