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Obamacare: The Mandate And the Taxing Power

29 Jun

Oftentimes, the federal government finds itself wanting to promote a certain behavior as part of a national program, but without the direct power to do so. By way of example, in the 1980s, the Reagan Administration decided that it wanted the drinking age to be raised from 18 to 21 nationwide. But the drinking age isn’t a federal, but a state statute. In order to persuade states to raise the drinking age, the federal government passed an incentive plan. If a state failed to raise its drinking age to 21, it would find itself with a diminution in federal highway funding. 

“The power to tax involves the power to destroy”, wrote Chief Justice John Marshall in 1819. With respect to the Affordable Care Act, or “Obamacare”, the power to tax also involves the power to build something. Under the law, beginning in 2014, Congress will require most Americans to obtain health insurance, or – if you don’t, you pay a fine to the government. The mandate was, ironically, a precondition set by the insurance industry, without which they would not be able to economically justify offering insurance to people with pre-existing conditions at no penalty.

The key part of Chief Justice Roberts’ opinion yesterday reviewed the constitutional justification for that mandate to purchase health insurance.  Congress’ powers are specifically limited and enumerated in Article 1 of the Constitution. 

Roberts turned first to the Commerce Clause (Article 1, Section 8), whereby Congress has the power to “regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.”  Roberts rejected the argument that the government could regulate the absence of commerce; you cannot regulate that which does not exist.  His analysis seems somewhat limited, however. After all, there is not a personal alive who isn’t engaged in the health care market now, or inevitably. Even if you’re not seeking medical care, you’re paying for others’. 

Right now, you and I (and everybody) are taxed to help pay for uninsured people’s emergency room visits. ERs can’t turn people away, and oftentimes the poor and uninsured use them for primary care.  Those hospitals seek reimbursement for the cost of providing those services through two Federal Programs, Disproportionate Share Hospital (DSH) and Upper Payment Limit (UPL)–that require a 50% local share match. So…instead of forcing the cost of health care provision onto the people who don’t have insurance, you (a taxpayer, or a person with insurance) are paying for them to get health care with both your federal and county tax dollars. 

Secondly, Roberts turned briefly to the “Necessary and Proper” Clause, also in Article 1, Section 8, it reads, “The Congress shall have Power – To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.”  Roberts declined to go along with this, reasoning that…

Each of our prior cases upholding laws under that Clause involved exercises of authority derivative of, and in service to, a granted power. For example, we have upheld provisions permitting continued confinement of those already in federal custody when they could not be safely released…[t]he individual mandate, by contrast, vests Congress with the extraordinary ability to create the necessary predicate to the exercise of an enumerated power.

And so, the last resort – the “in the alternative” argument – was most persuasive to the 5 members of the Court who voted to maintain the ACA mandate. The very first Congressional power enumerated at Article 1, section 8 involves the power to tax and spend. Roberts wrote that Congress’ mandate isn’t the issue – it’s the “penalty” imposed on people who refuse to purchase insurance. While the dissent argued that the government is semantically blocked from calling the “penalty” a “tax”, Roberts argued that the word “penalty” assumes some sort of fine for illegality. Yet the refusal to purchase insurance isn’t illegal – it isn’t a crime. It is merely a choice, and a person’s choice to opt to pay a tax instead of buying insurance is one that government can regulate under its taxing power. 

…the Government asks us to read the mandate not as ordering individuals to buy insurance, but rather as imposing a tax on those who do not buy that product…

…None of this is to say that the payment is not intended to affect individual conduct. Although the payment will raise considerable revenue, it is plainly designed to expand health insurance coverage. But taxes that seek to influence conduct are nothing new. Some of our earliest federal taxes sought to deter the purchase of imported manufactured goods in order to foster the growth of domestic industry

Because Roberts invoked the taxing power, dumber pundits and lazy politicians have pivoted to calling it all – the whole law – a “huge tax”.  Perhaps they should read the law, and then read the Court’s opinion. It’s not a “huge tax”. It’s a mandate that you have health insurance. Chances are, you already have it – it’s not like you’re being forced to buy super-more health insurance on top of what you may already have. And if you don’t have it, you’ll have much easier and cheaper access to health insurance. And if you choose not to have any at all, then you’ll be assessed a fine, a tax, whatever you want to call it. 

The ACA’s “shared responsibility payment”  is a tax only on people who choose not to hold insurance. Anyone who says otherwise is ignorant, mistaken, and/or lying. 

With the mandate in place, no longer will the person without health care get away with not paying hospital bills, and no longer will taxpayers be “mandated” to subsidize those choices. Instead, the person making the choice to avoid insuring himself will be assessed a tax in the eventuality that he becomes ill and can’t afford to pay his bill. Do you want the person without health care to be taxed, or do you want to continue to be taxed because they don’t have health care?

In the olden days, “personal responsibility” was a conservative talking point.  Now, we’re essentially codifying it through Obamacare – you’re responsible to get coverage, or for the consequences if you don’t. Now? 

The remaining portions of the decision dealt with (a) the Court’s analysis of whether the issue was ripe for decision (it is); (b) whether striking the mandate meant invalidating the whole law (they didn’t have to reach it); and (c) a provision dealing with the expansion of Medicaid, holding that States can reject federal funding and therefore not comply with the new rules. 

The misinformation and disinformation being spread over the last 24 hours has been simply mind-blowing. For instance, here’s a fundraising email that Republican congressional candidate Chris Collins (who, incidentally, never, ever has to worry about not being able to afford anything, ever, including health care) sent yesterday: 

Dear friend,

The Supreme Court has confirmed what we already knew – ObamaCare is nothing more than a massive tax increase that will hurt hardworking families and continue to act as a wet blanket on economic growth and job creation.

Today, I’m asking for your donation of $27 dollars to protect the residents of the 27th Congressional District from this massive tax hike and help end ObamaCare.

I need your help to stop Kathy Hochul and Barack Obama from raising taxes on thousands of Western New York and Finger Lakes families. 

$27. 

$27 is how we can protect our families in the 27th Congressional District from massive tax increases.

When I go to Congress, my first order of business will be to lead the fight to repeal ObamaCare and replace it with common sense solutions that protect seniors and don’t crush small businesses and cost us jobs.

$27 can get us there.

Whether it’s $27, or $5, $10, $50 or $100 – anything you can do to help us stop Barack Obama and Kathy Hochul from raising taxes and cutting Medicare by $500 billion is so important.  Will you consider donating today?

There’s so much at stake, and I need your help.

Sincerely,

CHRIS COLLINS

Congressional Candidate, NY-27

No, it’s not one side or another that won or lost – everybody won. Everybody will benefit from the implementation of Obamacare. It isn’t at all a huge tax increase, and the only reason Medicare funding goes down is because the ACA picks up the slack. Obamacare isn’t a “huge tax increase”, indeed it will help families by reducing the most common type of bankruptcy – ones brought about through medical expenses. Is this law a boon to insurers? Yes. That’s why many progressives didn’t like it much, and that’s why the law is something of a Frankenstein’s monster. But Obamacare, like its progenitor, Romneycare, is a fundamentally conservative idea. Because it’s been adopted by a Democratic President whom the Republicans are determined to ruin, it is now characterized as something it’s not. 

And make no mistake – the Republican drive to ruin Obama is so concentrated and driven, that it doesn’t matter what collateral damage there is to average Americans, or the economy. 

It’s not surprising to see a politician lie, but when mere puffery, (“I’m the best”), turns into brazen lying, (“I poop rainbows and spit unicorns”), you have to wonder what the politician thinks of the people who are going to vote for him. I heard some of our right-wing omniphobe media personalities liken the United States under the ACA to North Korea. There was heavy emphasis on “Hussein” yesterday, because “Hussein” is a foreign, Muslim name, and because somehow that correlates with socialism. Or something. I wish I was a professional psychologist so I could better analyze what was taking place.  Even Mitt Romney noted that the Court didn’t hold that Obamacare was a “good policy”. That’s jaw-droppingly dumb – Palin dumb. 

Requiring Americans to buy private health insurance from private corporations is socialist? Spreading the risk across most Americans so that health insurers can’t refuse to insure people with pre-existing conditions is like living in a Stalinist dictatorship with no market, no freedom, no food, no money, closed borders, and extensive gulags? How dumb. Almost as dumb as the many people who took to Twitter to decry the loss of America’s freedom and announce that they’d move to Canada, which has true single-payer socialized medicine. 

Set aside the crazies and the liars – Americans won today. The ACA – Obamacare – isn’t a perfect solution. No solution is perfect, after all. But it will make our health insurance in this country more affordable, with better coverage, and no longer will you live at the mercy of health insurance companies, fearing arbitrary rate hikes, lifetime payout maximums, or being barred from buying insurance due to a pre-existing condition if you change your job. This is good for people

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