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Thursday, June 28, 2012

ACA Today

The Supreme Court ruled 5-4 today that the Affordable Care Act is constitutional. Surprisingly, Chief Justice John Roberts voted in the majority and was thus the swing vote. Many court observers expected he would vote to uphold the act only if Justice Anthony Kennedy was the swing vote. But Kennedy dissented. Roberts got to assign himself the task of writing the majority opinion, but few expected this to occur in favor of ACA unless the vote was 6-3.

Did Roberts abandon his fellow conservatives altogether? No. Roberts, in fact, did not agree with the four more liberal justices that the ACA could be justified by the Commerce Clause of the constitution. Readers might recall the back-and-forth about whether consumers might be required to purchase a product like broccoli under the interpretation of the Commerce Clause offered by the President's lawyers in the courtroom. Incidentally, while Roberts may have been quite concerned about forced broccoli purchases, Justice Ruth Ginsberg destroyed that argument in her concurring opinion.

In any event, Justice Roberts ruled with the liberal justices that Congress had the authority to implement an individual mandate via its power (from Article I and in the Sixteenth Amendment) to tax individuals. After all, both the House and Senate versions of the ACA enforced the individual mandate using the Internal Revenue Service to impose a modest fine -- or tax: 
Since the ACA’s fine for failure to carry insurance is very low (and statutorily calibrated to the price of insurance so that no one will ever pay more for refusing insurance than for buying insurance), since the fine applies regardless of whether the individual knew she was uninsured, and since the fine is assessed and collected exclusively by the IRS, the Court held that it is a tax rather than a penalty under the long-standing constitutional test.

Many conservatives are hotly claiming that the mandate was NOT explicitly sold as tax policy. Some even point to this video of Barack Obama vehemently denying that ACA is a tax. However, if you watch the video, Obama denies that the law is a tax increase, he doesn't say it is not a tax. His argument is that people who don't pay for health insurance effectively force taxpayers to expend their resources when the uninsured seek medical care for emergency care that they cannot otherwise afford.

Certainly by mid-July 2010, as this New York Times story demonstrates, the Obama White House was arguing that the law was constitutional as a tax even in the face of Tea Party opposition to higher taxes and more spending. Incidentally, that Times story also claims that Obama argued ACA was not a tax, but it then quotes from the same ABC-TV interview where he says it is not a tax increase. The newspaper cut short an exchange and make it appears as if the President directly challenges the idea.

"ObamaCare" will likely become a major issue in the presidential election, though Democrats have some powerful arguments to counter the likely Republican attacks. After all, as Ezra Klein and others have demonstrated, the Obama health care law was grounded in ideas borrowed from Republican think tanks over the past two decades. In the Heritage Foundation Lectures, Dr. Stuart Butler argued in  1989 for the government to simply "Mandate all households to obtain adequate insurance." Back in 2010, left-leaning critics of ACA who favored the "public option" charged that this was a boondoggle for the private insurance companies as they would be getting millions of new customers thanks to this policy change.

In any case, conservative critics are also in trouble because Mitt Romney supported and helped pass a very similar bill in Massachusetts ("RomneyCare") during his tenure as governor. The Massachusetts individual mandate is enforced via the tax code. Thus, how can he, in particular, argue effectively against the ACA? I guess we will all find out in time.

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