Robert and Carl* are a gay couple who have been together for several years. They live in a state that permits same-sex marriage, and recently tied the knot in a Church ceremony. Like many other married couples, they have established a stable home and are active members of their community. Carl is healthy but lives with a manageable medical condition. Like approximately 1.1 million other Americans, Carl is HIV positive.
Today, HIV positive people are living long, normal, healthy lives…as long as they receive proper medical care. Highly Active Anti-Retroviral Therapy (HAART), a combination of three medications, is now the standard treatment to battle HIV. While quite effective one of the major downsides of treatment is cost. Carl’s three medications run about $2,200 per month…a figure that is quite typical. This, of course, does not include approximately six blood tests and physicians appointments per year, bringing his treatment costs to about $3,000 per month.
The US Congress recognized the steep cost of treatment when they reauthorized the Ryan White Care Act in 2009 by a vote of 408-9. This Act authorizes the expenditure of over $2 billion annually to assist with HIV outreach and treatment. It is the ‘payer of last resort,’ and income guidelines are applied towards recipients, but still it is estimated that some 30% of HIV positive individuals receive some assistance through this program.
More comprehensive coverage, of course, is available through private insurance. More than 25% of Americans work for an employer that offers domestic partner benefits; 51% percent of Fortune 500 companies offer domestic partner health benefits; and 37% of all Americans live in states where some legal protection of same-sex partner arrangements exist (marriage, civil unions, or domestic partner benefits.)
Back to Robert and Carl.
Robert has a full-time, secure job, and both he and his employer contribute towards Roberts’ health insurance. When Robert married Carl, they looked forward to Carl’s being added to Roberts policy as a spouse, thus providing not only coverage for Carl’s HIV medicine, but for the entire range of normal health care for which the typical American might visit the doctor or the hospital. Robert, who had been married before, had already had his children (and formerly, an ex-wife), on his family policy.
Enter the federal Defense of Marriage Act (“DOMA”).
Under DOMA, the federal government agencies are prohibited from recognizing the validity of same-sex unions of any kind, even when they are authorized under state law. This is a significant change to federal-state relationships, since Family Law issues have always been decided at the state level. As a result, in Rhode Island, Alabama, and Alaska first cousins may legally marry, while in Louisiana, New Hampshire, and Pennsylvania such marriages are illegal. The Federal government dos not take a stand on this issue: they accept first-cousin marriages from Alaska as legal, but would reject the validity of first-cousin marriages illegally performed in Pennsylvania. In other words, the federal government normally accepts the states’ definition of marriage as authoritative in the matter of marriage.
Under DOMA, however, the federal government will not consider a same-sex marriage, validly performed under state law, as a valid marriage under federal law. And that has serious federal income tax implications.
When Robert added Carl, his lawful spouse, to his family health insurance, his HR office informed him that since Carl was not a spouse under federal law, Robert would have to pay taxes on “imputed income” to Carl. “Imputed Income is the addition of the value of cash/non-cash compensation to an employees’ taxable wages,” and both federal income taxes and FICA (Social Security) taxes are assessed against the value of this imputed income.
Robert was shocked when he saw his next paycheck. In order to cover the imputed value of providing health insurance to his spouse – an action that is never applied to an opposite-sex spouse – his employer had withheld an additional $450/month from his paycheck.
As a middle-class income-earner, the loss of an additional $5,400 annually was too much to absorb. Robert removed Carl from his health insurance policy, and Carl applied for – and received – HIV coverage under the Ryan White Act.
The sad reality is that without DOMA, Carl could have been added to a private insurance policy just as any other spouse could be, without the punishing effect of federal taxes associated with imputed income.
Because of DOMA, American taxpayers will now pay a minimum of $36,000 annually for Carl. And this is just a single instance of a pattern that is replicated across the nation.
There are over 1.1 million HIV positive Americans. 30% receive assistance through the Two Billion dollar plus Ryan White Care Act. Close to half might currently or eventually be eligible for private insurance coverage through spouses, civil unions, domestic partnership arrangements, or company policies.
Fiscal Conservatives, take note: one of the single most significant actions you could take to reduce spending and taxpayer burden, while improving health care provisions for hundreds of thousands of Americans, is to repeal the provision of DOMA that prohibits federal recognition of valid state marriages.
The only real question is whether you believe that punishing homosexual couples is a more important public policy goal.
*Robert and Carl are not their real names, but they are real people and the dollar figures and story are entirely accurate.
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SOURCES:
CDC 'HIV Prevalence Estimates -- United States, 2006' MMWR 57(39), 3 October 2008
http://health.msn.com/health-topics/articlepage.aspx?cp-documentid=100057404
http://aids.about.com/od/hivmedicationfactsheets/a/drugcost.htm
AIDS Drug Assistance Programs (ADAPs) - Henry J. Kaiser Family Foundation Fact Sheet
U.S. Census Bureau. “County Business Patterns: 2000.”
Human Rights Campaign, “State of the Workplace: 2006.”
http://www.haasjr.org/index.php
http://definitions.uslegal.com/i/imputed-income/
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