Policy Documents

Marriage Penalty in Health Bills Could Cost Married Couples Thousands

January 26, 2010

Depending on what version of health care legislation survives the next few weeks, tying the knot could cost couples more than just their wedding expenses. Under either bill, married couples would face a health care “marriage penalty.”

The penalty would hit low and mid-income couples who purchase their insurance through the new exchanges created in the bills. While those who receive employer-based insurance will not be affected, those in the exchanges could face premium increases of $2,000 or more.

Would Hit Millions

The penalty results from the subsidy levels set in the bills. Because the subsidies correspond to federal poverty guidelines, married couples with a combined income are limited in the subsidies they would receive in a way individuals are not. According to the Congressional Budget Office, roughly 17 million people who would receive subsidies in 2016 under the House-passed legislation, including millions of married couples.


Estimates show the penalty for married couples will hit those whose incomes are between $58,280 and $86,640. This will happen because once the couple’s combined income reaches 400 percent of the Federal Poverty Level, there is no cap on premiums and their premiums are not subsidized, according to John LaPlante, editor of StateHouseCall, a nonprofit health care policy solutions site.

“Congress would use the federal poverty guidelines to design subsidies for health insurance. The guidelines recognize the adage that ‘two can live cheaper than one’,” LaPlante explains. “For example, the poverty level for a household of one was $10,830 in 2009. What if you have two people living side-by-side, unmarried? With a combined income of $21,600, each would benefit from anti-poverty programs. But if they marry, they’re restricted to an income of $14,570. That’s only 34 percent higher. If the two lose out on a public program altogether [by having a combined income too high to qualify], their tax is 100 percent.”

Subsidies Inevitably Discriminate

Devon Herrick, a senior fellow at the National Center for Policy Analysis in Dallas, Texas, believes the marriage penalty could affect millions of Americans if employers push their employees into health exchange plans in lieu of providing more costly employer-based insurance themselves.

“This is an example of how poorly conceived public policy can discourage activities beneficial to society,” Herrick said. “Young couples will be adversely impacted in additional ways. Insurance policies in the exchange will have modified community ratings that gouge young couples to offset costs for older—often wealthier—couples. A better solution is to provide a uniform tax credit while allowing individuals to purchase the coverage that meets their needs.”

For couples whose combined income would push them out of the range of federal subsidies, the cost of the health care marriage penalty could be as high as $5,000 each year.


“Regardless of which form of legislation is ultimately passed, any new health care law that includes taxpayer subsidies of health insurance will likely penalize people who get married, just as our progressive tax system currently does,” LaPlante said.

Sarah McIntosh (mcintosh.sarah@gmail.com) teaches constitutional law and American politics at Wichita State University in Kansas.