If you're searching for an upside to being single, look no further than Congress's health overhaul proposals. Married couples could end up paying thousands of dollars more each year for health insurance than singles with the same incomes.
Couples worried about insurance premiums may think twice before heading down the aisle.
Couples worried about insurance premiums may think twice before heading down the aisle. Darren Kemper/Corbis
That's because subsidies to help people afford coverage are linked to the federal poverty level. The closer a person's income is to the FPL, the greater the subsidies he or she would receive. The FPL is adjusted for the size of families — $10,830 a year for one person, $14,570 for two — but if two people with similar incomes tie the knot, their combined income would outpace that adjustment. (Here's a calculator that will help you compare subsidies for singles and families.)
The Wall Street Journal breaks it down: Under the House bill, an unmarried couple making a combined $50,000 would pay a total of $3,076 a year for coverage. "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." In the Senate version, "a couple with $50,000 combined income would pay $3,450 in annual premiums if unmarried, and $5,100 if married — a difference of $1,650."
As the Journal notes, unintended tax consequences for marriage are nothing new. For instance, Congress took steps to mitigate a so-called "marriage penalty" on income taxes in 2001. Marriage can also make it tougher for some people to claim the earned income tax credit, meant to support low-income families with kids.
Though Republicans such as House Minority Leader John Boehner, R-Ohio, have made a cause out of eliminating similar penalties in the past, there's been little chatter about whether the health overhaul will make staying single seem smart. A few bloggers, Rush Limbaugh and conservative groups raised the issue last month. Focus on the Family, a group dedicated to "defending the God-ordained institution of the family," worried the legislation could "discourage couples from tying the knot."
An economics professor, Stacy Dickert-Conlin, tells the Journal that most people don't really decide whether to marry for tax reasons.
Weaver is a reporter for Kaiser Health News, a nonprofit news service.