How ObamaCare Encourages Marriage (But Only for the Middle Class)

From Measuring the Strength of the Individual Mandate, a March, 2012, report by Milliman Consulting Actuary Paul R. Houchens:

At a given income level, two-adult households are more likely to have premiums exceed the threshold than an individual. For example, in calendar year 2016, 400% FPL is estimated to translate into $47,000 of annual income for a single person and $63,000 for a married couple. If the bronze premium is $4,000 for a single individual at a given age, it will be approximately $8,000 for a married couple with the same ages. For a single person with income just above the 400% FPL threshold, the premium cost will be approximately 8.3% of household income ($4,000÷$47,000). However, for a married couple, the premium cost will be approximately 12.7% of household income ($8,000÷$63,000), which will be deemed unaffordable. The married couple will be exempt from the individual mandate, and will also be allowed to purchase insurance coverage in the catastrophic health plan that is otherwise limited to individuals under 30 years old.

How does the individual mandate penalty stack up against insurance premiums in other household configurations? Read on.

The following table from the report shows the ratio of the individual mandate penalty amount relative to the out-of-pocket bronze plan premium for selected households.  Note that at incomes above 200% of FPL it is rational to pay the penalty rather than to buy health insurance. With guaranteed issue, those households can always purchase health insurance if they anticipate that their future health expenses will make it worthwhile.


In 2010, most households had incomes above 200% FPL. The report gives these data from the 2010 American Community Survey.

Comments (6)

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  1. Lawson says:

    They are slowly, but surely, forcing people to make decisions that are convenient for them (by “them” I mean government officials). They are playing their cards in a way that makes other people believe that their government is actually looking after them and doing things for their benefit. However, in the long run is all for them, and for them only. When you have to persuade people to make certain decisions instead of leaving it up to them, then you know you are playing dirty..

  2. Andrew O says:

    Good report by Milliman and good find. Will have to take a closer look at it, but anybody else have thoughts on this?

  3. Andrew O says:

    Lawson, it seems that could be the case, but do you have data or factual evidence of how this would benefit “them”? Just curious…

  4. Neil Caffrey says:

    I wish the GOVT would stop trying to dictate behavior.

  5. Jordan says:

    But then it wouldn’t be called “the nanny state.”

  6. civisisus says:

    “Note that at incomes above 200% of FPL it is rational to pay the penalty rather than to buy health insurance.”

    Yes, if your definition of “rational” aligns with “Dr” Goodman’s straitened (okay, cartoonish) worldview.

    Get the Milliman report and decide for yourself how “rational” risking unmanageable health care bills is above the income the Dr draws – and note as well the share of the population staring down that rational decision.

    He’d have you believe everything would be peachy if we merely did nothing. In his wacky world, our asystematic ‘system’ was going to heal itself – all you’d have to do was wait….