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(Washington, D.C.) - Rep. Glenn Grothman (R-Wisconsin) introduced the Obamacare Marriage Penalty Elimination Act (H.R. 2306) this week, which eliminates the marriage penalty in President Obama’s failed health care law. Obamacare’s current subsidy structure creates a substantial marriage penalty for low-income married couples. This structure, along with other welfare programs discourages marriage and encourages low-income Americans to remain single in order to receive larger health care premium subsidies. 

“Obamacare has been a disaster from the beginning,” said Congressman Grothman. “Obamacare’s marriage penalty punishes low-income married couples and sends the wrong message to American families. Creating incentives for people to divorce or remain single is fundamentally wrong and continues to encourage the breakdown of the American family. Families are at the core of American society and it is my hope that this bill will fix one disastrous part of Obamacare.”

Currently, President Obama’s health care law provides premium subsidies, through tax credits, to low and middle income families to pay for health care coverage. This law calculates those subsidies based on a household’s income compared to the federal poverty level. Any individual or family signed up for Obamacare coverage can claim the credit if their combined income is less than 400 percent of the federal poverty level (or roughly $62,000). If a couple is married and both spouses work, both of their incomes count against the federal poverty level calculation, usually reducing a couple’s premium subsidy. If that same couple would get divorced however, their subsidies would be calculated individually, thus increasing their subsidy level. 

H.R. 2306 would require that the premium subsidies be calculated using each individual’s income rather than collectively. The bill also requires the Treasury and Health and Human Services Departments to adjust the subsidy eligibility levels to ensure that the couples with the most need still will receive subsidies, but still guarantees that this change will not increase the deficit. This legislation also accounts for the children or dependents when calculating the tax credit by distributing them between spouses.

A copy of the bill text can be found here. 

Congressman Grothman has been working on this issue in the House Budget Committee and included language in the budget conference report. See his work here. 

U.S. Rep. Glenn Grothman is serving his first term representing Wisconsin’s 6th Congressional District in the U.S. House of Representatives. Contact his Washington, D.C., office at (202) 225-2476, or online at grothman.house.gov.