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The Hidden Marriage Penalty in Obamacare

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  • The Hidden Marriage Penalty in Obamacare

    The first time I heard Nona Willis Aronowitz talk about getting divorced to save money on health insurance I thought she couldn't really be serious. We were at Monte's, an old Italian place in South Brooklyn, having dinner with a group of New York women writers in late July.

    "Don't do it!" I urged her, certain, having watched my friends over the years, that no matter how casually she or her husband might treat the piece of paper that says they are married, getting unhitched would inevitably change their relationship as profoundly as getting hitched in the first place.

    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.)

    Nona and Aaron's 2012 income was higher than the 400 percent mark, but not by much. In New York City, that still doesn't take you very far for two people. If their most recent months of income are in the same range, they will get no help at all with buying insurance through the exchanges if and when they apply, according to the Kaiser Family Foundation and eHealth subsidy calculators. Premiums for the two for silver-level plans came in at $9,248 for the year.

    But if they applied as unmarried individuals with something like their 2012 income, one of them would get at least $3,964 in subsidies toward the purchase of a plan, or possibly even be eligible for Medicaid, thanks to their uneven individual earnings that year. And if they fall below the 400 percent threshold, which Nona says they might this year, they could get substantial subsidies as a couple that are still worth less than what they'd be eligible for as individuals. These gaps are the marriage penalty.


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    May we raise children who love the unloved things - the dandelion, the worm, the spiderlings.
    Children who sense the rose needs the thorn and run into rainswept days the same way they turn towards the sun...
    And when they're grown and someone has to speak for those who have no voice,
    may they draw upon that wilder bond, those days of tending tender things and be the one.

  • #2
    So basically the ACA has encouraged, created and / or empowered a whole new class of governmental breast feeders, those that are substantially above the poverty line but due to career decisions and lifestyle or spending choices feel that they need or are entitled to a subsidy in order to have that which the government claims they must.
    If it were not for the fact that my recent anecdotal experience is that the loudest complainers are also those that voted for the politicians that allowed this to happen, I might actually feel for them.
    We are so fucked.

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    • #3
      Anyone want to say that these people are desperately poor?

      Clearly middle class, literal "yuppies" who can game the system.
      "Faith is nothing but a firm assent of the mind : which, if it be regulated, as is our duty, cannot be afforded to anything but upon good reason, and so cannot be opposite to it."

      -John Locke

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      • #4
        Great. Bringing back the "tactical divorces" of the late '70s and early '80s. That's progress for you!
        Bask in the warmth of the Deep South
        No one will be denied:
        Big law suits and bathroom toots;
        We're all getting Dixie-fried.
        But somewhere Hank and Lefty
        Are rollin' in their graves
        While kudzu vines grow over signs that read "Jesus Saves."

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