Republicans: PPACA Tax Credit to Favor Singles

If an employer offered a working husband affordable self-only coverage, but family coverage for an out-of-pocket premium that clearly was not affordable, “the rest of the family is not eligible for the PPACA tax credits,” the staff members say. “The family would be faced with the decision of buying private coverage at an annual cost exceeding $10,000 for the mom and the kids (unless the kids are covered by the state’s [Children's Health Insurance Program]  or foregoing insurance and being forced to pay the tax penalty instituted by the health care law for individuals who lack health insurance.”

If the current rules and rule interpretations prevail, the percentage of married couples that qualify for the tax credit may be as low as 3.3%, the staff members estimate.

About half of the people who qualify for the credit could be single people without children, and about half could be single parents, the staff members say.

Richard Burkhauser, a researcher at Cornell University, notes in written testimony submitted to the committee that family coverage typically costs about 3 times as much as individual coverage, and that employers often expect employees to pay a larger share of the premiums for family coverage than for individual coverage.

If affordability cut-offs depended on whether a worker could afford family coverage, rather than single coverage, the number of employed workers eligible for the subsidy because of a lack of access to affordable coverage could increase to 7.1 million, from 5.8 million, Burkhauser says.

If employees pay 100% of the premiums, then about 9.9 million workers who need self-only coverage would be eligible and about 15 workers who need family coverage would qualify.

Policymakers need to look at ways to avoid put large numbers of spouses and children in a tax credity subsidy “no man’s land,” Burkhauser says.