Back in the 1960s Daniel Patrick Moynihan wrote about how the welfare system was hurting family structures in Black communities. It was obviously unintentional, but it was happening.
Over the next few years we will start to see some the unintended consequences of President Obama’s health care plan. Diana Furchtgott-Roth has already identified one. But instead of summarizing Ms. Furchtgott-Roth’s article, let me quote from it (the entire article is here):
"Goodbye, marriage, one is tempted to say after studying the new health care law. Its terms, which determine federal aid with health premiums purchased through the new exchanges, will penalize married couples, even more than does the income tax now.
[U]nwed Americans may find it even more advantageous – financially, anyway – to stay single than to marry. …
With $10,830 as the poverty line for one person and an additional $3,740 for a spouse, marriage in 2014 will mean less government help with health insurance premiums. Americans will receive credits for the purchase of health insurance for incomes up to 400% of the poverty line, now $43,320 for singles and $58,280 for a couple. …
Since premiums for new health plans in the new health exchanges won't come cheap … getting government help with the premiums will be vital to low- and moderate-income families. …
Since premium credits shrink as income rises, making premiums more costly, there will exist an incentive to report less income. That would discourage marriage between two employed persons, or would encourage nonmarital cohabitation and children.
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. As a married couple, the most they could earn and still get government help would be $58,000, a difference of almost $30,000, or 32%. This looks like a substantial disincentive to getting married, or to working while married.
The penalty extends also to single mothers. Say Sally is a single mother earning $43,710, putting her and her baby at 300% of the poverty line. They would be eligible for the health insurance premium assistance credit.
But what if Sally wants to marry Sam, the father of her child, who earns $43,320, and is at 400% of the federal poverty line? Their total earnings, at $87,030, would exceed the 400% poverty line for a family of three ($73,240). Married, they would no longer receive help with their health insurance premiums, despite both earning the credit when unmarried. In order to keep her government health insurance benefit, Sally could only marry someone earning less than $30,000."
So, they have made the poverty trap deeper and encouraged, yet again, people not to get married. There will be more of these unintended consequences coming. We just don’t know what they are yet.
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