Thursday, December 23, 2010

Domestic Partners and Health Insurance Reform

An increasing number of companies have acknowledged the health care needs of gay and lesbian employees, as well as their partners. Many large corporations extend health coverage to their employees' partners, just as they do for the spouses and children of heterosexual employees. However, the majority of family health insurance options on the open market do not make such coverage available.

Health care reform leaves that status largely unchanged. It does not mandate or forbid employers from providing health coverage to the gay or lesbian partners of employees; one-in-five already do. If businesses end up paying higher rates (due to the influx of unhealthier patients with pre-existing conditions, who cannot be charged significantly greater premiums), they may decide to drop coverage of dependents and spouses entirely. That would not have a discriminatory impact on gay and lesbian employees, though.

On the other hand, it will help those who are uninsured largely due to their inability to join their domestic partner's policy find affordable health insurance. Many will be eligible for subsidies to buy policies.

The House of Representatives attempted to include a provision in the health insurance reform legislation that would fix what most consider to be an unfair burden. Unlike health insurance for opposite-sex married spouses, which is tax-exempt, a same-sex partner's insurance is counted as income - and therefore taxed at standard income tax rates. An employee must also pay Social Security and other payroll taxes on the value of the portion of the policy their employer covers for their domestic partner. The House's version of the law would have equalized those tax breaks for family health insurance.

That provision fell by the wayside in the Senate's bill, and was also ignored in the reconciliation package that helped make healthcare reform law. It is possible that with so many other issues involved, it was simply ignored in order to make its passage more expedient. Another divisive social issue also took away attention: abortion. Unfortunately, Democrats in Congress may not have wanted to risk garnering yet more controversy from social conservatives.

The Senate was also more concerned about minimizing the cost of the bill, making yet another tax break possibly untenable. President Obama would have most likely approved of a provision, given that he recently requested formal regulations allowing same-sex partners to have equal hospital visiting rights to those of immediate family members. Obama only has so much political capital, which he already spent most of to pass affordable health insurance reform.