• Individually, they would each qualify for a subsidy of about $1,087, or $2,174 per household.
• If that same couple were to marry, their combined subsidy would fall to $753.
• Thus, getting married would cost them $1,421 annually.
It gets worse. Living together also increases the likelihood of raising children without the security of marriage. Government surveys find that about one in five women who begin cohabitating for the first time become pregnant within a year. This figure doubles for some segments of the population. Few people would argue that children don’t benefit from the stability that marriage provides a family.
If the cohabitating couple mentioned above were to have a child together, the Tax Policy Center estimates they would suffer an additional marriage penalty of $2,672 per year in higher taxes as a result of their decision to get married (although their ObamaCare Exchange penalty would fall by $456). If the mother applies to food stamps, reporting only her own income and her and her child as her family size, she would likely qualify for an additional $1,800 in annual food stamp assistance. It is a reasonable bet that $5,437 (the combined marriage penalty worth about $453 per month) is a large enough financial incentive to make many couples like this hesitate about marriage.
The ObamaCare marriage penalty especially discourages low-to-moderate income cohabitating couples from marrying. National statistics already show cohabitating leads to marriage far less often among low-income couples than wealthier, more highly educated ones.Low-to-moderate-income couples who cohabitate are about twice as likely to forgo marriage as couples with a bachelor’s degree. This may be because the tax penalities take a bigger bite out of lower income couples’ budgets, discouraging a trip down the aisle.
It's not just young, moderate-income couples who experience ObamaCare marriage penalties; middle-aged, middle-income couples can as well. Exchange subsidies are a function of both income and premiums, which vary by age and region of the country. Thus, married couples whose combined income surpasses 400 percent of poverty will receive no subsidy, while their individual incomes would qualify for a generous subsidy. In some instances where middle-aged couples live in high-cost regions, their marriage penalty can surpass more than $7,000.
As a result of the ObamaCare marriage penalty, pre-existing marriage tax penalties and other marriage penalties embedded in government welfare programs, many moderate-income couples may decide a marriage license is an unnecessary luxury they cannot afford.