Monday, November 18, 2013

Obamacare Dramatically Penalizes Childless/Empty Nest Marriages (and Gay Marriages Too)

Update: Kaiser Family Foundation reports that 69% of Oregon families consist of adults with no children. That's 1,631,500 Oregon adults with no children. The national average is 66% of families with adults only.

Obamacare substantially penalizes married couple only families. Given modern American marriage patterns, this includes many young/young middle-aged marrieds who have not yet started a family or are not planning to have children, and almost all older marrieds since their children have moved out. It also impacts most gay marriages--which, for obvious reasons, tend to be childless.

From The Atlantic:
Any married couple that earns more than 400 percent of the federal poverty level—that is $62,040—for a family of two earns too much for subsidies under Obamacare. "If you're over 400 percent of poverty, you're never eligible for premium" support, explains Gary Claxton, director of the Health Care Marketplace Project at the Kaiser Family Foundation.

But if that same couple lived together unmarried, they could earn up to $45,960 each—$91,920 total—and still be eligible for subsidies through the exchanges in New York state, where insurance is comparatively expensive and the state exchange was set up in such a way as to not provide lower rates for younger people. (Subsidy eligibility is calculated using a complicated formula involving income in relation to the poverty line, family size, and the price of plans offered through a state's marketplace.)
The couple cited in the article were looking at health insurance costing $9,248 a year. Married they could receive no subsidy. Single, living together, they could receive a $3,964 subsidy and "possibly even be eligible for Medicaid, thanks to their uneven individual earnings that year."

There is also a "marriage penalty" in the tax code, but it is much increased under Obamacare.
"In the tax code, you have a different set of tax rates for married couples that mitigates the marriage penalty to some degree," says Robert Rector, a senior research fellow at the Heritage Foundation who has been writing about the marriage penalty in health reform since 2010. Under Obamacare, however, there are "dramatic" penalties that are "substantial—particularly with couples in the upper age range," he says.
H/T Byron York


MAX Redline said...

Good points, there. However, some of the penalty goes away for older folks when they reach the age for Medicare distributions, which doesn't seem to be addressed in the argument. Still, it totally screws with younger folks and those in homosexual marriages (assuming that they can find jobs and earn money).

T. D. said...

Heh, Max. "assuming that they can find jobs and earn money"

To be fair, the article is focusing on younger married couples (though the Robert Rector quotation references "couples in the upper age range").

Mixing a bit of apples and oranges stats (KFF and US census) would bring one to believe that about half of Oregon families are headed by a married couple. About 60% of those do not have children under 18. That means about 30% of Oregon families are likely in this category.

Subtracting the estimated number of 65+ couples (where one or both are 65+) in the no children families category, still leaves about 300,000 Oregonians (150,828 households) who could face this penalty (depending on income).

And, of course, none of this factors in the coming impact of Obamacare cutting half a trillion dollars from Medicare. Good luck to seniors when that kicks in.

MAX Redline said...

By not getting married, a couple in New York could earn an extra $29,880 and still receive subsidies if they choose not to be married.

If they tie the knot, that considerable chunk of change goes away.

And yes, when they start cutting half a trillion from Medicare, things are going to get way worse.

T. D. said...

$29,880 is a big chunk of change. Using the Kaiser subsidy calculator, a 30 year old in Oregon has to make under $27,680 to get even the most paltry subsidy [$2 per year(!) for $27,670]. Insurance was expected to cost about $180 per month.

$15,850 is the breaking point where an individual is advised to go on Medicaid.

$15,860 (at 138% of poverty level) gets a $135/mo subsidy, but still has to pay $44/mo out of pocket.

Methinks the helpful impact of subsidies for anyone in the general public, other than actual welfare recipients, will be minimal.

MAX Redline said...

Her heartfelt letter made it to the President's hands and then into his October 21 speech.

"'I was crying the other day when I signed up. So much stress lifted.'" Obama said, reading from Sanford's letter.

The president said Sanford's story was proof, despite the technical problems with the website, that the Affordable Care Act was working.

"That's what the Affordable Care Act is all about. The point is, the essence of the law - the health insurance that's available to people - is working just fine," Obama said.

But then, after Obama mentioned her story, Sanford started having problems. Sanford said she received another letter informing her the Washington state health exchange had miscalculated her eligibility for a tax credit.

In other words, her monthly insurance bill had shot up from $198 a month (she had initially said $169 a month to the White House but she switched plans) to $280 a month for the same "gold" plan offered by the state exchange.

Then she got another note. Then another. Then another that informed her that she qualifies for a tax credit of $0.00.

Now, having twice voted for the clown, she's not buying insurance because under the ACA, she can't afford it.

Much as I'd like to go all snarky on the lady, I can't - it'd be cripple-hopping. Her only real mistake was believing anything Barky ever said.

T. D. said...

A sad story, indeed. Bad government policy (making health care 40% more expensive for someone already on the ropes economically) combined with government incompetence.

Believing in a politician's promise and the media hype of hope and change? As you infer, it would be funny, if it weren't so tragic.