DOMA Ruling Could Limit ObamaCare Eligibility

The Hill by Sam Baker –

Some same-sex couples might lose their eligibility for new tax credits under President Obama’s healthcare law as a result of the Supreme Court’s ruling on same-sex marriage.

The court on Wednesday struck down a part of the Defense of Marriage Act (DOMA) that prohibited same-sex couples from collecting federal benefits available to married couples.

Expanding same-sex couples’ overall access to federal benefits, though, could mean that some couples lose their eligiblity for ObamaCare’s tax credits.

The reason? Couples who live in states that have recognized same-sex marriage will now file their taxes as a married couple, combining both partners’ salaries into a single household income.

Brian Haile, senior vice president for health policy at Jackson Hewitt, said in a memo that same-sex couples with similar incomes could lose their eligibility for ObamaCare tax credits.

The tax credits are designed to help low-income people afford their premiums — the size of a family’s credit is based on its income, and the credits stop altogether once income passes 400 percent of the federal poverty limit.

So partners who might have qualified for tax credits on their own might lose their eligibility once the federal government begins to treat them as a married couple.

Haile said a hypothetical couple living in a state that recognizes same-sex marriage, with each partner making $40,000, would lose eligibility for tax credits as a result of the DOMA ruling. An individual income of $40,000 would be enough for one person to qualify, but a two-income household making $80,000 isn’t eligible.

The opposite could happen in same-sex couples where only one partner works, or where there’s a big gap between the partners’ salaries. One high-earning partner might not qualify for tax credits alone, but the same salary might be low enough to qualify when it’s the total income for a two-person household.

Roughly the same principle applies to Medicaid benefits. During earlier DOMA litigation, Massachusetts complained that the law was costing the state money because same-sex couples were individually eligible for Medicaid and the federal government wouldn’t treat them as a single household, even though Massachusetts did.

Same-sex couples might also lose their access to ObamaCare’s tax credits if only one partner has access to insurance through work. The healthcare law does not provide tax credits to people who have the option of gaining coverage through a spouse’s employer-based plan.

Under DOMA, same-sex couples weren’t considered spouses, so one partner could have received the tax credit while the other purchased coverage through his or her employer. But now, Haile said, that couple might “lose out” on government subsidies because the government will hold them to the same standards as opposite-sex couples.

The DOMA ruling is still fresh, and experts are still sorting through all of its implications. Some changes will make it easier for couples to access healthcare benefits, particularly through employers.

Source: John & Rusty Report via Choice Admin