The Spectacle Blog

Intended or Unintended Consequence? Obamacare Disincentivizes Marriage

By on 10.28.11 | 3:09PM

The major part of President Barack Obama's health care law that would expand coverage involves subsidizing households looking to obtain health insurance up to 400 percent of the federal poverty line.

And it turns out that there's a problem there. Whereas many welfare and government programs take into account the number of people involved in a household, Obamacare does not. Analysts testifying before Congress yesterday discussed the disincentives:

"The way this bill is structured, there are disincentives for women to marry and disincentives for women to work," said Diana Furchtgott-Roth, a senior fellow at the Manhattan Institute for Policy Research.
"Two singles would each be able to earn $43,000 and still receive help to purchase health insurance, but if they got married and combined their earnings to $86,000, they would be far above the limit," Furchtgott-Roth explained. So those with that much income as a couple would lose the government subsidies and be on their own for thousands of dollars in health coverage.

The subsidies disappear at 400 percent of the poverty line and it's the poor structure of the program that creates work disincentives. Economics 21 reports, "Once that threshold is crossed, the subsidy immediately drops to zero. So for a family of four in that income range, a raise in wages would actually result in a significant reduction in take-home pay." We know that Obamacare was questionably-designed and rushed through Congress. It might be true that we had to pass it to find out just how big of a mess it's put us in.

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