So much is so wrong with Capitol Hill’s two versions of government health care that it’s hard to focus on yet another poison pill in the bills. Hard, but important. It turns out that in addition to unconstitutional measures, unfair individual mandates, higher taxes, penalties for lifesaving medical devices and a potentially devastating rationing of care, Obamacare also contains several penalties on couples for getting married. Those penalties make government the enemy of both good romance and good finance.
The first sort of marriage penalties affects low- and middle-income couples who would get their insurance without employer assistance but with government subsidies. The penalties accrue through the “caps” on premiums. In the House plan, an unmarried couple living together with each earning $25,000 would pay no more than $3,076 in combined premiums each year. If the same couple got married, their annual cap would skyrocket to $5,160 - a 68 percent punishment just for saying “I do.” (The penalty in the Senate bill is slightly lower, at 48 percent.)
What is even worse is that the subsidies are suddenly and completely cut off once somebody reaches 400 percent of the official poverty-level income ($63,360 in 2016). The arithmetic is complicated, but what it means is that two unmarried persons earning $32,000 each ($64,000 total) would pay a maximum combined $5,684 in premiums, but if they got married, they would pay about $15,000. That is an astonishing penalty of 164 percent. It is almost impossible to imagine a policy that could be any more anti-family than that.
Again, that was for middle-income earners receiving government subsidies in lieu of employer tax breaks for insurance. Now consider a high-earning couple. The Senate bill imposes a payroll tax increase on individuals who make more than $200,000. For married couples, though, the tax increase kicks in at $250,000. So, if you live together without matrimony, you can earn up to $400,000 combined without the higher tax - $150,000 more than you can earn together if you are married. At a maximum of $1,350, this marriage penalty through taxation isn’t anywhere near as damaging as the $9,316 knockout punch via lost subsidies for the $64,000 couple described above, but it’s still nothing to take lightly.
All sorts of other tax increases - and expensive “mandates,” “fees” and “penalties,” as the legislative lingo puts it - are hidden in both House and Senate versions of Obamacare, making a mockery of President Obama’s repeated pledge not to raise taxes on anybody making less than $200,000 a year. The marriage penalties, though, are worse even than those broken promises, because they are counterproductive in terms of both financial policy and social policy. By discouraging traditional marriage, Obamacare would further undermine the single most important building block of stable communities. That’s about as unhealthy as policy can get.