A taxing decision on health care mandate by the Supreme Court

The Supreme Court ruling on the health care law and its mandate assumes that a 'tax' for not buying insurance is simply an incentive. It isn't much of an incentive if it penalizes those who rely on nonmedical means of healing.

J. Scott Applewhite/AP Photo
Supreme Court Chief Justice John Roberts greets President Obama on Capitol Hill Jan. 24, prior to the president's State of the Union address.

The US Supreme Court ruling upholding the Patient Protection and Affordable Care Act ends a long chapter in the nation’s legal debate over the “individual mandate.” But by relying on a novel proposition to back the law, the court may have opened a new chapter.

The decision relies heavily on the unusual idea that the government can impose a tax on anyone who does not buy health insurance as an “incentive” to buy it.

A tax, in other words, is not really a penalty – even if the health-care law itself uses the word penalty more than 18 times.

Writing for the majority, Chief Justice John Roberts admits that the court had “a duty to construe” the law in a way that Congress did not intend in order “to save” it. The justices wanted to show a “reticence to invalidate” a law approved by elected leaders.

The court was not so reluctant in challenging the law’s core premise for the mandate. The ruling found the mandate could not be justified under a constitutional provision that allows Congress to regulate interstate commerce. Congress, the court said, has no right to “regulate” someone simply for not taking action, such as not buying insurance.

This part of the decision at least takes one stigma away from those who choose not to buy health insurance. They won’t be scofflaws for simply ignoring the so-called mandate.

Having made that point, the chief justice then goes on to say that Congress can use its authority to tax and thus achieve the same purpose. “Sustaining the mandate as a tax depends only on whether Congress has properly exercised its taxing power to encourage purchasing health insurance, not whether it can.”

Under this constitutional power, he reasons, a person can be taxed for doing nothing if the intention of Congress is simply to promote certain types of behavior. “Tax incentives already promote, for example, purchasing homes and professional educations,” he writes.

Those kinds of incentives, however, are really tax breaks, such as credits and deductions. The justice does not explain why a tax break should be treated the same as a tax charge. The first gives money away. The second takes it away.

This distinction is important for those who consciously choose not to buy health insurance, such as people who rely solely on nonmedical means for health even in emergencies. Being charged for what one believes does not look like much of an incentive for this class of people.

The chief justice, having renamed the law’s “penalty” as a tax, does worry about how Congress might use this tax – thus his warning that it must be done “properly.”

He says it cannot be so punitive to individuals as to “destroy” their welfare. This point may well require further review of the law by the courts. The courts could decide someday that the burden of paying 2.5 percent of one’s income for not buying health insurance, as the law calls for, is simply too destructive.

The Supreme Court has likely not said the last word on this law. And the act’s future could well be decided at the polls this November in the contest for the White House and Congress. The path toward achieving universal health care isn’t finished.

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