Some married couples would pay thousands of dollars more for the same health insurance coverage as unmarried people living together, under the health insurance overhaul plan pending in Congress.

The built-in "marriage penalty" in both House and Senate healthcare bills has received scant attention. But for scores of low-income and middle-income couples, it could mean a hike of $2,000 or more in annual insurance premiums the moment they say "I do."

The disparity comes about in part because subsidies for purchasing health insurance under the plan from congressional Democrats are pegged to federal poverty guidelines. That has the effect of limiting subsidies for married couples with a combined income, compared to if the individuals are single. ...

For an unmarried couple with income of $25,000 each, combined premiums would be capped at $3,076 per year, under the House bill. If the couple gets married, with a combined income of $50,000, their annual premium cap jumps to $5,160 -- a "penalty" of $2,084. Those figures were included in a memo prepared by House Republican staff. ...

Democratic staff who helped to write the bill confirmed the existence of the penalty, but said it cannot be remedied without creating other inequities.

For instance, they said making the subsidies neutral towards marriage would lead to a married couple with only one bread-winner getting a more generous subsidy than a single parent at the same income-level.

Labels: cohabitation, Marriage, poverty, tax policy

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