The latest unintended consequence of President Obama’s health care law could be a lower marriage rate, according to the staff of the House Oversight and Government Reform Committee. The committee recently released a study claiming a marriage penalty within Obama’s law could lead to fewer marriages once the law is implemented.
The marriage penalty identified in the Patient Protection and Affordable Care Act (PPACA) was one of several problems with the legislation outlined in an October 27 report by the committee, “Uncovering the True Impact of the Obamacare Tax Credits.”
Tax Credit Allocation at Issue
The marriage penalty is a result of how Obama’s law allocates tax credits for purchasing health insurance. According to the committee staff, based on estimates from the Joint Taxation Committee, “married couples will receive only 14 percent of the PPACA’s tax credits. At most, only two million married couples (out of nearly 60 million married couples) are projected to benefit from the health insurance tax credit in any year through 2021.”
“Obamacare introduces a substantial new marriage penalty into the tax code. Over time, PPACA’s marriage penalty will directly cause fewer individuals to marry,” the report found.
The report finds most of those who will benefit from tax credits would be unmarried individuals who have no children. Most of the rest of the beneficiaries would be single parents because the tax credit is tied to the federal poverty level, a standard that does not increase proportionately with family size. Married couples are at a disadvantage under any system that calculates subsidies this way.
Another factor driving PPACA’s marriage penalty is the interpretation of the law denying premium subsidies to a worker’s family if the worker’s employer offers “affordable” insurance for self-only health insurance coverage. Under regulations recently proposed by HHS, as long as an employer offers self-only insurance coverage that is less than 9.5 percent of household income, the family does not qualify for tax credits, regardless of how much a family policy would cost.
According to the report, these aspects of PPACA strongly favor single individuals over those who are married.
Testifying about the report before the House Oversight Subcommittee on Health Care, Diana Furchtgott-Roth, a senior fellow at the Manhattan Institute for Policy Research, said, “Beginning in 2014, when the new law takes effect, Americans at both ends of the income scale will find it more advantageous to stay single than to marry, even more so than under the current tax code. And women will face greater incentives to leave the workforce.
“The Affordable Care Act is not a well structured piece of legislation,” Furchtgott-Roth stated.
Rep. Darrell Issa (R-CA), chairman of the Oversight Committee, says the marriage penalty flaw in the legislation points to the hurried nature of PPACA’s passage.
“This law is a textbook case in the law of unintended consequences,” said Issa at the hearing. “In their rush to fulfill President Obama’s campaign rhetoric, they rushed a flawed bill through Congress. This report makes clear the cost to our deficit and the negative impact on married families from this law.”