The health reform law could undermine marriage, House Republicans say. GOP: Health law may drive divorce

House Republicans are launching a new attack on President Barack Obama's health care reform law today: It will drive you to divorce.

The health reform law could undermine marriage because once people tie the knot, they may no longer be eligible for tax incentives for insurance, a new report from the GOP Oversight and Government Reform Committee says.


The law links the tax credit to household income. So two people whose combined income goes above a certain level will not be able to get a tax credit if they are married and file together. But if they get divorced or stay single they might, individually, be eligible for a premium credit. Giving people pause about marriage could be a big "unintended consequence" of the law, the report says.

The committee asked the Joint Committee on Taxation to crunch some marriage numbers. The JCT found that 2 million of the nearly 60 million married couples in the U.S. will end up qualifying for the tax credit.

Under the law, families as well as individuals can qualify for subsidies on a sliding scale, up to 400 percent of the poverty level. There are also various provisions for families who can get insurance on the job but it eats up a large part of their income.

Some experts believe HHS may issue further guidance about family affordability, but the report says this would have consequences too: More people obtaining tax credits would drive up the overall cost of the law.

The proposed rule on tax credits is somewhat unclear on the issue of affordability for families with employer-sponsored insurance. The GOP report says it could be interpreted to mean that if only one spouse receives insurance through his or her employer, the family could be forced to choose between a.) a divorce and tax credits b.) buying individual insurance without a premium subsidy or c.) paying a penalty and forgoing insurance.

The oversight committee offered this example:

"The proposed rule issued by the administration disqualifies a family from claiming the credit if either spouse is offered an insurance plan at work with an out-of-pocket premium less than 9.5 percent of household income for self-only coverage. For example, if a 40-year-old married couple with two children makes $70,000 per year and neither spouse has an offer of ESI, the family would qualify for a tax credit of $5,579. If either spouse has an offer of ESI, however, the couple would not qualify for the tax credit. Under the status quo, nearly all employees who are offered coverage at their workplace will likely have an offer of affordable coverage because most employees pay less than 9.5 percent of household income for their portion of the total premium. Thus, married couples and their families will generally be ineligible for the credits if either spouse has access to coverage through his or her employer."

The oversight subcommittee on health care will hold a hearing titled, "Examining Obamacare's Hidden Marriage Penalty and Its Impact on the Deficit" to dissect the report in more detail.

This article first appeared on POLITICO Pro at 9:35 a.m. on October 27, 2011.

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