Green Room

ObamaCare incentivizing divorce?

posted at 5:51 pm on October 2, 2013 by

My friend and editor at The Fiscal Times, Jacqueline Leo, offers an interesting analysis of a set of perverse incentives in ObamaCare.  Middle-income earners might do better by divorcing if both spouses end up in the exchanges — and perhaps a lot better, according to BizzyBlog’s Tom Blumer:

Earlier this year, TFT showed that a high-earning couple, each with incomes of $400,000, would save about $27,000 annually if they divorced and filed their taxes separately.  Now we learn that the Affordable Care Act, a.k.a. Obamacare, is dangling a similar fate in front of middle income earners.

A typical 40-year old couple with two kids could save $7,230 a year by divorcing if one partner earns, say, $70,000 and the other $23,000. Sixty year-olds earning $62,041 each a year would save $11,028 annually if they broke up.

This analysis below, written by Tom Blumer, a blogger at PJ Media, points out the unintended consequence of what Obamacare will do to marriages and families. He used this calculator from the Kaiser Family Foundation to run the numbers.

In January 2010, two months before Obamacare’s passage, Robert Rector at the Heritage Foundation gave the impact a name: the “wedding tax.”

Some of this relies on the sharp “cliffs” seen in the premium-to-subsidy calculations.  The ACA ended up with those rather than more graduated subsidies, which produce these kinds of effectts.  We’ve seen the same phenomenon for workers who could get a raise that would cost them thousands of dollars in lost subsidies, at least in theory, thanks to these sharp cliffs in the calculations.

Will ObamaCare cause a couple to split up in reality? Probably not, but it might wind up producing divorces that replace legal marriage with cohabitation.  It’s the kind of strange effect that perverse incentives produce.

Recently in the Green Room:

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

This is precisely the kind of anti-human and anti-family crap you would expect from the progressive wet dream of health control reform.

Murphy9 on October 2, 2013 at 5:56 PM

Mrs. cozmo has been suggesting this.

I think she is shopping for a younger model.

cozmo on October 2, 2013 at 6:02 PM

Obamacare: the gift that keeps on giving.

AZCoyote on October 2, 2013 at 6:40 PM

The only way that it makes sense to have your marriage recognized by the government is if your family unit has a single income only. Or, I guess, if you are gay and insecure and need affirmation from somewhere.

besser tot als rot on October 2, 2013 at 7:09 PM

Fits right in with all the other things they do to incentivise divorce, like welfare and promoting homosexual lifestyles.

Count to 10 on October 2, 2013 at 7:49 PM

This analysis below, written by Tom Blumer, a blogger at PJ Media, points out the unintended consequence of what Obamacare will do to marriages and families.

FIFY.

OccamsRazor on October 2, 2013 at 8:04 PM

Hah are you kidding? Don’t forget free daycare and food stamps.

jhffmn on October 2, 2013 at 9:36 PM

Has anyone run the numbers for three or more spouses, there might be an incentive?

xdwall on October 3, 2013 at 2:41 AM

It’s about creating a nation of Julia’s.

njrob on October 3, 2013 at 3:05 AM

Good info, but I don’t think it’ll go over very well here. Maybe I’ll just leave the article laying out on the coffee table.

bill glass on October 3, 2013 at 4:55 AM

Has anyone run the numbers for three or more spouses, there might be an incentive?

xdwall on October 3, 2013 at 2:41 AM

Islamophobia!

Annar on October 3, 2013 at 8:25 AM

The Democrats destroyed the black family and it worked out well for them. I guess they’ve decided to expand the program.

Kafir on October 3, 2013 at 9:13 AM