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Rick Moran


November 16, 2013 - 10:12 am

The economics of Obamacare dictates that it makes more sense for some married couples to get divorced and live together rather than stay married and pay more for their health insurance.

This analysis by the Atlantic’s Garance Franke-Ruta shows why the subsidies for insurance bought on the exchanges actually works against two-income marriages. She tells the story of married friends who are contemplating a divorce to save on health care costs:

But with the arrival of the Affordable Care Act’s insurance exchanges, the question for Nona and her husband Aaron Cassara moved from the realm of casual conversation to a real financial conundrum. Aged 29 and 32, respectively, they were facing tough times for their professions, a wildly expensive city, and the scary prospect that both of them could shortly be uninsured. Right now Nona only has a COBRA plan—”which I can barely afford”—that ends January 1, she tells me. Her last staff job ended when the media outlet she was working for laid off its whole editorial team; she’s been a full-time freelancer since. Aaron, a filmmaker who works part-time and also freelances, has been uninsured since her layoff, because it would be too expensive to have him on COBRA too.

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.)

If the couple applied as unmarried individuals, they could help themselves to sizable subsidies — far more than if they were applying as a married couple.

Franke-Ruta concludes:

Married people who are uninsured make up just a small fraction of the uninsured, for obvious reasons: It is easier to be insured if you have two potential pathways of getting there. Only 15.4 percent of married people were uninsured 2012, according to research from the Kaiser Family Foundation; the uninsurance rate for “single adults living together” was more than twice as high—33.4 percent.

That may be one reason the Obamacare subsides are more generous to single people and one- or two-parent families with children in the house than to couples who lack children. They were designed to help single moms and struggling middle-class families with children, not married creative-class millennials in pricey cities who have not yet settled into well-paid work, or barring that, work for a single employer.

Not a bug. A feature.

Rick Moran is PJ Media's Chicago editor and Blog editor at The American Thinker. He is also host of the"RINO Hour of Power" on Blog Talk Radio. His own blog is Right Wing Nut House.

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All Comments   (5)
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All policies will increase in price for those doing the right thing by buying insurance. But subsidies will also be paid by the same people through taxes.
Isn't that double taxation? Taxation without representation?
1 year ago
1 year ago Link To Comment
"...til death or obamacare do us part."
1 year ago
1 year ago Link To Comment
So far Ocare is being "friendly" to: 1) singles who can't keep their old insurance [15 million voters]; 2) couples without children who make more than $62,500 between them [15 million voters]; 3) many seniors whose Medicare Advantage program will be cancelled or very restricted next year [perhaps another 15 million voters]; and, last but definitely not least, employers who will decide to drop insurance for employees and opt to give them a pay raise, forcing them onto exchanges [perhaps up to 65 million voters]. Pretty soon you begin to understand why the Dems facing re-election in 2014 are getting nervous.
1 year ago
1 year ago Link To Comment
What makes you think the companies will give a raise in lieu of insurance?

In the examples I'm personally aware of, the boss basically just came out and stated that due to Obamacare they are going to stop offering insurance at all - with no pay increase to be seen or heard from anywhere in the conversation.

I understand the health plan my own company uses won't stay in effect past next fall.

Don't even want to think about what is going to happen after that and am truly hoping that the $hit hitting the fan now will have neutered Obamacare entirely by the time I have to consider my own options.

I suspect, after the start of the new year, a lot of citizens will be taking the position of just repealing the damn thing in the hope or belief they can get their old policies back.

Of course, the RINO's running the republican party will, I'm certain, run someone in 2016 just ever so slightly to the left of Obama who will helpfully advertise they just want to "fix" Obamacare - not repeal it, and will run similarly lackluster candidates in the 2014 mid-terms.

God help us....
1 year ago
1 year ago Link To Comment
Also, consider how the "community rating" is going to cause geographic sorting like school zoning on steroids.
1 year ago
1 year ago Link To Comment
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