Thursday, June 28, 2012

Obamacare Survives

The political pundits and prognosticators really missed this one. The U.S. Supreme Court today upheld the Affordable Care Act, also known as Obamacare, in its entirety. Chief Justice John Roberts joined liberal members of the Court in finding that the individual health insurance mandate, the cornerstone of the Act, was a constitutionally permitted tax on Americans even if it does violate the Commerce Clause of the U.S. Constitution. The Act requires Americans who fail to obtain health insurance to pay a penalty to the IRS. Although the Act describes the payment as a penalty and not a tax, a majority of the Court determined that it was still a tax, although not within the meaning of the Anti-Injunction Act, which prohibits lawsuits restraining the assessment or collection of a tax. While the opinion delivered by Chief Justice John Roberts found that the individual mandate violated the U.S. Commerce Clause, the majority found that the authority for the individual mandate could be found in Congress' taxing power. The Court's opinion does impose some restrictions on the portion of the Act expanding Medicaid coverage but still upholds that portion of the Act as well as long as federal funding is not withheld from states that don't go along with the expanded Medicaid coverage provided by the Act. Justices Alito, Kennedy, Scalia and Thomas wrote in a dissenting opinion that they would have struck down the Act in its entirety based on their view that Congress had exceeded federal power both in mandating the purchase of health insurance and in denying all nonconsenting states their federal funding for their respective state Medicaid programs.

UPDATE:  The dissenter's opinion argues that a tax and a penalty are mutually exclusive. The Act clearly defines a "penalty", not a "tax" that affected Americans must pay if they choose not to purchase health insurance. And yes, it only applies to Americans. Undocumented aliens and prisoners will not be subject to the "penalty," but as we know, health care providers cannot deny services to undocumented aliens, which results in the government (i.e., the American taxpayers) picking up their health care tab. As the dissenting opinion points out, a penalty is "a punishment for an unlawful act or omission." "[T]o say that the Individual Mandate merely imposes a tax is not to interpret the statute but to rewrite it," the dissent opines. Indeed, the Obama administration repeatedly argued during oral argument that it was not imposing a new tax on Americans. Nonetheless, the majority opinion written by the Chief Justice upholds it on that basis despite the contrary language used by Congress and the interpretation offered of it by the administration. The dissenting opinion is also very critical of the Medicaid expansion that essentially extorts the states into helping finance the massive expansion of the program by threatening to withhold funding for their existing Medicaid programs. "The fragmentation of power produced by the structure of our Government is central to liberty, and when we destroy it, we place liberty at peril," concludes the dissenters.


Pete Boggs said...

And the "ability to tax," is the ability to...?

Pointman said...

...increase revenue? ;-)