By Peter J. Smith

WASHINGTON, D.C., January 8, 2010 ( – When it comes to saving money on health-care, the current Democratic proposals in Congress makes one thing clear: it pays for couples to cohabitate and not to get married.

The Wall Street Journal reports that both bills in the US House and Senate have a built in “marriage penalty,” which for many low-income and middle-class married couples would mean an increase of at least $2,000 in annual insurance premiums than if they had not married.

The Journal reports that Democrats have attached government health-insurance subsidies to federal poverty guidelines. The bills allow individuals earning up to 400 percent of the federal poverty level to apply for federal health-insurance subsidies, but the amount they need to pay for premiums increases from 1.5 percent of their income at the lowest level to 11 percent at the highest.

However married couples are treated as a single income, so the greater the combined income of a couple, the less subsidies they may receive and the more in premiums they have to pay. On the other hand, if the couple is not married and cohabitates as two legal singles, they each could receive more money in health-care subsidies with a lower premium.

Citing a memo by House Republican staff, the Journal reports that an unmarried couple bringing in an income of $25,000 each would pay a combined premium of $3,076 per year in the House version. However, once the couple gets married, they would have a combined income of $50,000, and their premium cap would jumps to $5,160 per year – paying $2,084 more per year than if they had just decided to live together unmarried.

The Senate bill has the same effect, but the numbers narrow slightly: the unmarried couple in the above scenario would pay $3,450 in annual premiums, but pay $5,100 per year if they chose to get married. Marriage, therefore, cost them together an extra $1,650 per year in health-insurance premiums.

Democratic staff responsible for writing portions of the bill told the Journal that health-care legislation did include a marriage penalty. However they defended the existence of the penalty on the grounds that making government subsidies neutral toward marriage would lead to married couples with a sole breadwinner receiving more in subsidies than a single-parent of the same income – a situation they regard as unfair.

But others counter that the injustice lies in discouraging individuals struggling to make ends meet from seeking the benefits of marriage.

“This seems to not only penalize the married, but also those who would have the most to gain from marriage—the poor,” Jenny Tyree, an analyst at the Colorado-based Focus on the Family, told the Journal.

The Journal concludes that the health-care reform bill in effect adds to the list of “federal and social benefits creating incentives to remain single.” Both the earned income tax credit and applying for welfare benefits and food stamps are made far more difficult for married persons to obtain than non-married persons.

Read the full story at the Wall Street Journal.