House GOP: Obamacare Will Penalize Married Couples, Encourage Cohabitation

Pro-family groups have even more reasons to criticize President Barack Obama's health care reform. A report from the House Oversight Committee reveals that provisions in the Obamacare law may penalize married couples by barring them from benefitting from the plan’s insurance subsidies. Meanwhile, single and cohabitating couples would benefit.

House Republicans asserted in a Wednesday report and at a hearing on Thursday that two provisions in Obama’s health care reform plan, the Patient Protection and Affordable Care Act, could force many of the nation’s wedded couples to pay more for insurance.

PPACA offers Americans insurance subsidies starting in 2014. However, those subsidies are based on federal poverty levels that do not proportionally reflect household size. Additionally, a second provision that would give individuals subsidies, if their company-offered health insurance is unaffordable, does not extend those subsidies to families if family health care plans prove to be unaffordable or unattainable.

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“This law is a textbook case in the law of unintended consequences,” said Oversight Committee Chairman Darrell Issa (R-Calif.) in statement. “In their (Democrats’) rush to fulfill President Obama’s campaign rhetoric, they rushed a flawed bill through Congress.”

According to the report summary, two million married couples, at most, are projected to benefit from the health insurance subsidies through 2021. That equals less than 5 percent of the nation’s nearly 60 million married couples. Married couples who do qualify for the subsidies will receive only 14 percent of the tax credits authorized under the health care reform bill.

The report projects nearly half of all PPACA beneficiaries will be singles with no children, while “most of the other beneficiaries will be single parents.”

Pro-family groups primarily oppose Obamacare because of the possibility the policy would subsidize abortion. However, now family groups have reason to believe that Obamacare would also offer young adults further disincentive to marry and have children.

Chuck Donovan, senior research fellow for the conservative think tank he Heritage Foundation, predicted in 2010 that the health care provisions could cost couples over $10,000 as incomes rise and they become ineligible for the insurance affordability tax credit.

Donovan also projected that passing Obamacare would harm young and senior couples equally.

“Not only does this health insurance marriage penalty dissuade a younger, low-income couple from getting married – which is one of the most beneficial life decisions they can make for themselves and for their children – but it also provides older couples, some of the hardest hit by this law, with an incentive to obtain a ‘divorce of convenience,’" he said in a 2010 assessment.

Robert Rector, also a Heritage Foundation senior research fellow, explained, “For example, a young couple without children, age 20, each making $20,000, would receive $4,317 more in health benefits each year if they cohabit rather than marry.”

He continued, “Slipping on the wedding ring would cut the couple’s annual disposable income by more than 10 percent. Rather than pay this new wedding tax, the couple is likely to postpone marriage or forego it entirely.”

For older couples, Rector projected, “Similarly, a 50-year-old couple, each earning $20,000 per year, would receive $5,114 less in benefits each year if they marry or remain married. By divorcing and then living together, the couple could increase its income by more than $50,000 over a decade.”

Family Research Council President Tony Perkins also predicted Obamacare would impose a “marriage penalty” in a 2009 statement.

House Republicans contended during their hearing that the nonpartisan data from the Joint Committee on Taxation and the Congressional Budget Office confirm that Obamacare will in fact pose a financial threat on the nation’s married couples.

Rep Danny Davis (D-Ill.) testified Thursday that numerous government programs have subsidies that are based on federal poverty levels. He also said further tax credits will be available to Americans with employer insurance or public assistance coverage.

Davis contended that benefits such as access to preventative care and protection from medical debt outweighs any unforeseen costs.

“[PP]ACA is progress,” Davis said, “and while every individual will face unique circumstances and challenges under [PP]ACA, there are significant benefits that result in good health for the American public.”

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