Health Care Reform Bill Could Penalize Married Couples

Various news organizations are detailing how specific provisions of the pending health overhaul bills could impact the budgets of states as well as some married individuals while also may be tweaked to make health coverage more affordable for the lowest earners.  

The Wall Street Journal: "Some married couples would pay thousands of dollars more for the same health insurance coverage as unmarried people living together, under the health insurance overhaul plan pending in Congress. The built-in 'marriage penalty' ... comes about in part because subsidies for purchasing health insurance under the plan from congressional Democrats are pegged to federal poverty guidelines. That has the effect of limiting subsidies for married couples with a combined income, compared to if the individuals are single."

"People who get their health insurance through an employer wouldn't be affected. Only people that buy subsidized insurance through new exchanges set up by the legislation stand to be impacted. ... For an unmarried couple with income of $25,000 each, combined premiums would be capped at $3,076 per year, under the House bill. 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. ... The disparity is slightly smaller in the Senate version of health-care legislation, chiefly because premium subsidies in the House bill are more targeted towards low-wage earners" (Vaughan, 1/6). 

Time reports on how reform may affect states and create new financial concerns: "As the battle enters its final stage in Washington, a rebellion is taking shape in the states, which are alarmed about the new financial burdens they will face in a revamped system. Governors of both parties are complaining that reform will drive their budgets into even deeper holes, with some feeling the effects far more than others." Time notes four major changes including a bigger Medicaid tab, new regulatory burdens, possible state responsibility for insurance exchanges and a fight for federal funds" (Pickert and Tumulty, 1/7).

In a separate story, The Wall Street Journal reports that the "White House supports an effort to tweak the health bill so it makes insurance more affordable for the lowest earners. But the change would drive up the cost of the overhaul, an area where lawmakers have little room to maneuver. President Barack Obama met with top Democrats for the second consecutive day Wednesday to hash out the final legislation. ... The most significant idea to survive from the House could be its more-generous support for lower-income Americans. ... Adding subsidies threatens to drive the cost of the bill past the ceiling of $900 billion over a decade that Mr. Obama set last year. The more generous subsidies in the House bill cost $602 billion over a decade, while the subsidies in the Senate bill cost $436 billion during that period. ... A White House official said Wednesday that the president would support the House effort to make subsidies more generous, though the official didn't give details" (Adamy and Meckler, 1/7).

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