Save Money on Obamacare — Get Divorced
It's being called Obamacare's "wedding tax." Provisions of the healthcare reform bill discourage marriage — and encourage divorce.
According to a report by PJ Media, married couples can save thousands of dollars on healthcare premiums if they get a divorce and continue to live together.
That's because Obamacare is designed to provide healthcare benefits that are substantially more generous for lower-income people, and the bill counts a married couple's income jointly.
Using a calculator from the Kaiser Family Foundation, PJ Media's Tom Blumer gave the example of a 60-year-old married couple with no children in the household, with identical annual incomes totaling $62,041. Obamacare premiums rise sharply when combined earnings hit $62,041.
If they remain wed, their net premium next year would be $16,382. But unmarried individuals can earn up to $45,960 before losing Obamacare's subsidies, so if the couple divorces and each reports an income of $31,020.50, their combined net premium would be $5,354. That's a savings of $11,028 next year.
Blumer also offers the example of a 40-year-old couple with two children and incomes of $70,000 and $23,000.
Their combined income is $93,000, and subsidies disappear at $92,401 for married pairs with two children. Their combined premium would be $11,547 next year.
But if they divorce and give custody of the children to the lower-earning spouse, one spouse's premium would be $3,857 and the other's would be $460, for a total of $4,317. That's a savings of $7,230 next year.
Blumer observes: "Clearly, many couples who are considering marriage, especially after several years of seeing formerly married couples regress to cohabiting, will look at Obamacare's 'wedding tax' and say, 'never mind.'
"The effect on society will be incalculable, and certainly not for the good."
However, the law in many states says a couple cannot cohabit indefinitely and still claim not to be married.
The IRS could find those couples who are claiming they are not wed for healthcare subsidy purposes, leading to this scenario, according to Blumer: "Those caught and punished by the IRS carrying out its new role as the de facto 'marriage police' could get hit with multi-year bills for undeserved 'tax credits' running into tens of thousands of dollars."