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Explaining the Legalese of the US Supreme Court's Ruling on the Affordable Care Act ~ pj - Updated 2Xs
Saturday, June 30 2012 @ 03:44 PM EDT

I'd like to show you what the US Supreme Court decision on the Affordable Care Act really says. In doing so, I'll also explain any legalese, and put it in my own simple English. Why?

I was offline most of yesterday, and I returned to see long threads about health care and the U.S. Supreme Court's ruling [PDF] on the Affordable Care Act [PDF]. That surprised me, because I didn't think you would be greatly interested. That's why I didn't even put it in News Picks, let alone write about it. But now I see I was wrong, that many of you are interested, and I also see a lot of misunderstanding of what the ruling actually says, not only in your comments but in the media. I also see a lot of FUD in the air. So I thought I'd take the time to explain it. If nothing else, it fits our purpose for doing Groklaw, since antiFUD is very much what we set out to do, and we have covered Constitutional issues before, albeit in the First Amendment context usually.

The decision in National Federation of Independent Business v. Sebelius is quite long, so I can't be brief, but I've divided it into chunks, so if there is one aspect that you are particularly interested in, you can just read that part. It's long, but it's not hard. At least, I've tried to make it understandable.

Jump To Comments

In this article, I won't be expressing my own views, or telling you what you should or should not think about the ACA, more properly titled the Patient Protection and Affordable Care Act of 2010. Nor am I telling you what your politics should or shouldn't be or what mine are or are not. That's irrelevant here. Everyone is welcome on Groklaw. I set it up that way, and actually, I have no real politics. That's probably why I didn't realize so many of you would care about this decision, because I haven't been following it except in the most casual way.

My purpose is to explain what the decision held, or more accurately to explain by *showing* you what it actually says instead of just telling you. The rest is up to you and entirely your business.

I'll start by explaining something important. In the legal field you *have* to think about all the issues from both sides, your own and the opponent's, and I don't know if that draws a certain type of person or it affects them so that they are more willing to consider others' views, but I view it as an asset. As we go through the main chunks of the decision, I think you'll see that the Chief Justice viewed the issues more as legal issues than political ones, and my descriptions will also be based on the legal, not the political, issues. I'd appreciate it if your comments would focus similarly. There is enough FUD about the Affordable Care Act without us adding to it. I'm trying to clarify, not increase the fog.

The ruling is 193 pages, so I am guessing many of you haven't read it. But please do [PDF]. I'll be hitting only the most important highlights, none of the subsidiary dissenting or concurring opinions except in passing, but it's all available to you, so you can verify what I'm writing about it, as is our style on Groklaw. Mostly I'll show you and just put the legalese into plainer English. Here are the three chunks I'll cover, so you can skip to whatever interests you the most:

Did the Court Have Jurisdiction?
Did Congress Have Authority Under the Commerce Clause?
Did Congress Have Authority Under Its Power to "Lay and Collect Taxes"?

The decision was written by Chief Justice John Roberts, as you know, who when being considered for the court, stated that he thought it was important that the court be separate from politics, that a judge's role was to be an umpire, not someone throwing the ball, and you'd have to agree that with this decision, at least, he tried to live up to his word.

The opinion itself begins by detailing what the lower courts held. I won't explain that part, because you can read it if you want to. He included it because it's his job to do that in moments like this. But we can safely skip it and jump into the first of the three categories I'll be covering, namely jurisdiction.

Did the Court Have Jurisdiction? - The First Question

Then there is a section on whether the court even had jurisdiction over the matter. Why? If they didn't have jurisdiction, that'd be the end of the matter. The court can't rule on even the constitutionality of a law if it lacks jurisdiction. So what was this issue about?

It seems there is a law called the Anti-Injunction Act that says you can't sue and seek an injunction to block a new tax. You can sue, after you pay, to get a refund, but you can't block the new tax before it even starts. Otherwise, the government would be swamped with litigation all the time. So the question was, was the Affordable Care Act's individual mandate penalty a tax for purposes of this one statute, the Anti-Injunction Act? If so, then no one could sue over it until 2014, after the law is scheduled to go into effect.

See how detailed and abstruse lawyers' arguments are? They try to think of everything applicable that might prevail, and that is what they are supposed to do. Well, some judges are up to the challenges they create. Chief Justice Roberts wrote that the issue of whether it is a tax with *respect to the Anti-Injunction Act*, and only that one law, and its requirements could be answered no, because the Affordable Care Act uses both the word "penalty" and elsewhere about other things the word "tax", and courts assume if you use two words in legislation, you mean to make a distinction. This isn't poetry. It's legislation, where words are unusually precise on purpose. And since Congress wrote both the Anti-Injunction Act and the ACA, it knew how to have it considered a tax for purposes of the Anti-Injunction Act by simply saying that, he points out. And Congress didn't do that. Here's the legalese:

The text of the pertinent statutes suggests otherwise. The Anti-Injunction Act applies to suits “for the purpose of restraining the assessment or collection of any tax.” §7421(a) (emphasis added). Congress, however, chose to describe the “[s]hared responsibility payment” imposed on those who forgo health insurance not as a “tax,” but as a “penalty.” §§5000A(b), (g)(2). There is no immediate reason to think that a statute applying to “any tax” would apply to a “penalty.”

Congress’s decision to label this exaction a “penalty” rather than a “tax” is significant because the Affordable Care Act describes many other exactions it creates as “taxes.” See Thomas More, 651 F. 3d, at 551. Where Congress uses certain language in one part of a statute and different language in another, it is generally presumed that Congress acts intentionally. See Russello v. United States, 464 U. S. 16, 23 (1983).

Amicus argues that even though Congress did not label the shared responsibility payment a tax, we should treat it as such under the Anti-Injunction Act because it functions like a tax.

That doesn't work *for this purpose*, however, he is saying, with respect to this one law, the Anti-Injunction Act, because Congress knew what they meant and they said penalty, knowing that tax was the word to use or to state to treat the penalty as a tax for the purposes of the Anti-Injunction Act. He credits Congress with knowing how to write legislation. So Chief Justice Roberts found that significant and dispositive.

But that's just the analysis of that one statute. When it comes to deciding if a law that Congress has passed is constitutional, there's a different legal analysis, in Roberts's view, as I'll show you later, but legally for this first question of jurisdiction, the fact there are two words used is fatal to the argument, Roberts held. Here's why he sees a difference:

It is true that Congress cannot change whether an exaction is a tax or a penalty for constitutional purposes simply by describing it as one or the other. Congress may not, for example, expand its power under the Taxing Clause, or escape the Double Jeopardy Clause’s constraint on criminal sanctions, by labeling a severe financial punishment a “tax.” See Bailey v. Drexel Furniture Co., 259 U. S. 20, 36–37 (1922); Department of Revenue of Mont. v. Kurth Ranch, 511 U. S. 767, 779 (1994).

The Anti-Injunction Act and the Affordable Care Act, however, are creatures of Congress’s own creation. How they relate to each other is up to Congress, and the best evidence of Congress’s intent is the statutory text. We have thus applied the Anti-Injunction Act to statutorily described “taxes” even where that label was inaccurate. See Bailey v. George, 259 U. S. 16 (1922) (Anti-Injunction Act applies to “Child Labor Tax” struck down as exceeding Congress’s taxing power in Drexel Furniture).

Congress can, of course, describe something as a penalty but direct that it nonetheless be treated as a tax for purposes of the Anti-Injunction Act. For example, 26 U. S. C. §6671(a) provides that “any reference in this title to ‘tax’ imposed by this title shall be deemed also to refer to the penalties and liabilities provided by” subchapter 68B of the Internal Revenue Code. Penalties in subchapter 68B are thus treated as taxes under Title 26, which includes the Anti-Injunction Act. The individual mandate, however, is not in subchapter 68B of the Code. Nor does any other provision state that references to taxes in Title 26 shall also be “deemed” to apply to the individual mandate.

What he's saying so far is that Congress wrote both laws. They know about the Anti-Injunction Act and its requirements, so if they *wanted* the penalty to be viewed as a tax for purposes of the Anti-Injunction Act, they could either have called it a tax or said it's a penalty but we want it viewed as a tax for the purposes of the Anti-Injunction Act. But Congress did neither. Roberts viewed that as no oversight, but intentional, and in fact, when interpreting what Congress meant, the rule is that you consider the words actually used to be intentional and to mean what they say.

There was one other subtler argument, and here is how Roberts dealt with it:

Amicus attempts to show that Congress did render the Anti-Injunction Act applicable to the individual mandate, albeit by a more circuitous route. Section 5000A(g)(1) specifies that the penalty for not complying with the mandate “shall be assessed and collected in the same manner as an assessable penalty under subchapter B of chapter 68.” Assessable penalties in subchapter 68B, in turn, “shall be assessed and collected in the same manner as taxes.” §6671(a). According to amicus, by directing that the penalty be “assessed and collected in the same manner as taxes,” §5000A(g)(1) made the Anti-Injunction Act applicable to this penalty. The Government disagrees. It argues that §5000A(g)(1) does not direct courts to apply the Anti-Injunction Act, because §5000A(g) is a directive only to the Secretary of the Treasury to use the same “‘methodology and procedures’” to collect the penalty that he uses to collect taxes. Brief for United States 32–33 (quoting Seven-Sky, 661 F. 3d, at 11).
In other words, saying you should collect it in the same way you collect taxes isn't the same thing as saying what you are collecting *is* taxes. He decided, therefore, that the government won that argument:
We think the Government has the better reading. As it observes, “Assessment” and “Collection” are chapters of the Internal Revenue Code providing the Secretary authority to assess and collect taxes, and generally specifying the means by which he shall do so. See §6201 (assessment authority); §6301 (collection authority). Section 5000A(g)(1)’s command that the penalty be “assessed and collected in the same manner” as taxes is best read as referring to those chapters and giving the Secretary the same authority and guidance with respect to the penalty. That interpretation is consistent with the remainder of §5000A(g), which instructs the Secretary on the tools he may use to collect the penalty. See §5000A(g)(2)(A) (barring criminal prosecutions); §5000A(g)(2)(B) (prohibiting the Secretary from using notices of lien and levies). The Anti-Injunction Act, by contrast, says nothing about the procedures to be used in assessing and collecting taxes.

Amicus argues in the alternative that a different section of the Internal Revenue Code requires courts to treat the penalty as a tax under the Anti-Injunction Act. Section 6201(a) authorizes the Secretary to make “assessments of all taxes (including interest, additional amounts, additions to the tax, and assessable penalties).” (Emphasis added.) Amicus contends that the penalty must be a tax, because it is an assessable penalty and §6201(a) says that taxes include assessable penalties.

That argument has force only if §6201(a) is read in isolation. The Code contains many provisions treating taxes and assessable penalties as distinct terms. See, e.g., §§860(h)(1), 6324A(a), 6601(e)(1)–(2), 6602, 7122(b). There would, for example, be no need for §6671(a) to deem “tax” to refer to certain assessable penalties if the Code already included all such penalties in the term “tax.” Indeed, amicus’s earlier observation that the Code requires assessable penalties to be assessed and collected “in the same manner as taxes” makes little sense if assessable penalties are themselves taxes. In light of the Code’s consistent distinction between the terms “tax” and “assessable penalty,” we must accept the Government’s interpretation: §6201(a) instructs the Secretary that his authority to assess taxes includes the authority to assess penalties, but it does not equate assessable penalties to taxes for other purposes.

The Affordable Care Act does not require that the penalty for failing to comply with the individual mandate be treated as a tax for purposes of the Anti-Injunction Act. The Anti-Injunction Act therefore does not apply to this suit, and we may proceed to the merits.

So, that was the basis for deciding that the court couldn't kick the can down the road to 2014, but had jurisdiction to decide the rest of the issues brought to it by both sides right now.

Did Congress Have Authority Under the Commerce Clause?

Having decided that it had jurisdiction to decide the rest of the issues, particularly whether the Act was constitutional or not, the court had two main arguments from the government on this. The first, and main one, was that it had the authority to enact the individual mandate under the Commerce Clause. The second argument the government raised was that if it didn't have the authority to make people buy insurance under the Commerce Clause, alternatively it had the authority to make those who refused to buy insurance pay a penalty instead, under Congress's authority to tax:
The Government advances two theories for the proposition that Congress had constitutional authority to enact the individual mandate. First, the Government argues that Congress had the power to enact the mandate under the Commerce Clause. Under that theory, Congress may order individuals to buy health insurance because the failure to do so affects interstate commerce, and could undercut the Affordable Care Act’s other reforms. Second, the Government argues that if the commerce power does not support the mandate, we should nonetheless uphold it as an exercise of Congress’s power to tax. According to the Government, even if Congress lacks the power to direct individuals to buy insurance, the only effect of the individual mandate is to raise taxes on those who do not do so, and thus the law may be upheld as a tax.
As you can see, it's factually wrong to say the government never said it was a tax. It was one of its two arguments before the US Supreme Court. And it's also not true that the Chief Justice somehow invented a way to call it a tax himself. It was the argument before him. I think it's important to point this out, so you are not confused by any Flying FUD. [Actually, on later reflection, this isn't precise. What they said was that it could be Constitutional under Congress's authority to tax.]

The court addressed the Commerce Clause argument first, and decided the federal government has no authority to make citizens buy a product they don't want to buy, to, in effect, force them to enter into commerce. Its authority under the Commerce Clause is broad, but only over commerce that exists, not commerce it compels and in essence creates. If you enjoy this sort of thing, you can read Justice Ruth Ginsburg's concurring opinion, where she raises some very compelling arguments that he's wrong in this, but it doesn't matter in the short run, in that he ruled otherwise. I admire Justice Ginsburg quite a lot, personally, and I always enjoy reading what she writes, because it's so clear and logical and because she never pretends that there is no ethical aspect to a decision. And from what I read in the dissent, I think it was possibly Justice Ginsburg who, in the end, got to Chief Justice Roberts.

I see in the dissent that they call her opinion a dissenting opinion and it actually is a concurring opinion -- although it's true that she dissented on the Commerce Clause issue, it's still oddly imprecise language -- and on page 141 of the PDF, the dissenters refer to something Chief Justice Roberts wrote (on page 86 of the PDF) as being a "dissent" -- so at one point, the now-dissenters thought apparently that ACA was dead in the water. That would indicate that at some point Roberts perhaps saw things differently and switched sides, and that has made all the difference.

Justice Ginsburg has spoken and written about how hard it is to change people's thinking, that it takes time, even when judges have it wrong. Maybe especially then. But she never stops trying to explain. And sometimes, over time, people who are able to think in the legal manner can see an argument as valid that they didn't really grasp earlier. And that can make history different than it otherwise would have been.

Chief Justice Roberts began this section by describing the problem the Affordable Care Act is trying to solve, and this is important to comprehending what this issue is all about:

The Government’s first argument is that the individual mandate is a valid exercise of Congress’s power under the Commerce Clause and the Necessary and Proper Clause. According to the Government, the health care market is characterized by a significant cost-shifting problem. Everyone will eventually need health care at a time and to an extent they cannot predict, but if they do not have insurance, they often will not be able to pay for it. Because state and federal laws nonetheless require hospitals to provide a certain degree of care to individuals without regard to their ability to pay, see, e.g., 42 U. S. C. §1395dd; Fla. Stat. Ann. §395.1041, hospitals end up receiving compensation for only a portion of the services they provide. To recoup the losses, hospitals pass on the cost to insurers through higher rates, and insurers, in turn, pass on the cost to policy holders in the form of higher premiums. Congress estimated that the cost of uncompensated care raises family health insurance premiums, on average, by over $1,000 per year. 42 U. S. C. §18091(2)(F).
I'll stop here for a second to highlight one thing: I see some saying this is going to be so costly, that it's a tax on everyone. But in actuality, the bill is trying to find a way to reduce that $1,000 surcharge or penalty on those who now pay for their own health insurance, that cost shifting whereby the responsible ones pay for those who are either devil-may-care about it or who can't afford to get health insurance or have been turned down for insurance and so are freeloading. In that sense, it is designed to provide relief to the majority, those who now are getting that burden shifted on to their shoulders.

The court continues:

In the Affordable Care Act, Congress addressed the problem of those who cannot obtain insurance coverage because of preexisting conditions or other health issues. It did so through the Act’s “guaranteed-issue” and “community-rating” provisions. These provisions together prohibit insurance companies from denying coverage to those with such conditions or charging unhealthy individuals higher premiums than healthy individuals. See §§300gg, 300gg–1, 300gg–3, 300gg–4. The guaranteed-issue and community-rating reforms do not, however, address the issue of healthy individuals who choose not to purchase insurance to cover potential health care needs. In fact, the reforms sharply exacerbate that problem, by providing an incentive for individuals to delay purchasing health insurance until they become sick, relying on the promise of guaranteed and affordable coverage.

The reforms also threaten to impose massive new costs on insurers, who are required to accept unhealthy individuals but prohibited from charging them rates necessary to pay for their coverage. This will lead insurers to significantly increase premiums on everyone. See Brief for America’s Health Insurance Plans et al. as Amici Curiae in No. 11– 393 etc. 8–9.

The individual mandate was Congress’s solution to these problems. By requiring that individuals purchase health insurance, the mandate prevents cost-shifting by those who would otherwise go without it. In addition, the mandate forces into the insurance risk pool more healthy individuals, whose premiums on average will be higher than their health care expenses. This allows insurers to subsidize the costs of covering the unhealthy individuals the reforms require them to accept. The Government claims that Congress has power under the Commerce and Necessary and Proper Clauses to enact this solution.

All insurance works that way, if you think about it. The expense of whatever horrible event it insures against, flood, fire, whatever, is paid for by a lot of people who never experience any such horrible event but pay anyway. Why would they? Because you never know when it will be you having to deal with the horrible event, and you want to have enough to protect yourself and your family.

Health insurance is unique in that everyone actually does experience some kind of event during their lifetime, and that makes paying for it harder to figure out and the ACA decided that broadening the pool was the way to do it, by insisting that everyone carry some part of the load, whether they enjoyed doing so or not, with some exceptions and help for those who really can't afford it.

So that's the problem. Cost shifting. That's what the law is attempting to address. It's a real problem, and at the moment, I read around 30 million Americans are without health insurance. That causes economic hardship on those who do have insurance, because someone has to pay for those 30 million people when they get seriously ill or have an accident and end up in the emergency rooms of the nation's hospitals. Here in the US, they are not supposed to leave you on the curb to die. So the government's argument was that the failure to have insurance “has a substantial and deleterious effect on interstate commerce” by creating the cost-shifting problem. That's how they tried to slip it in under the Commerce Clause. And you'd have to agree, it's not an implausible argument on its face. Again, Justice Ginsburg and the other justices who agreed with her about it thought it was a winning argument.

Roberts even goes through a long history of how the Commerce Clause has been employed over history, and for sure, its umbrella is broad. The Chief Justice in fact quotes one case that held this:

“[E]ven if appellee’s activity be local and though it may not be regarded as commerce, it may still, whatever its nature, be reached by Congress if it exerts a substantial economic effect on interstate commerce”
This argument did convince some of the justices, in fact. For sure the current cost shifting has affected interstate commerce, raising the rates insurance companies charge those who otherwise would be paying $1,000 less.

Chief Justice Roberts first acknowledges that it isn't implausible to make the Commerce Clause argument:

The Government contends that the individual mandate is within Congress’s power because the failure to purchase insurance “has a substantial and deleterious effect on interstate commerce” by creating the cost-shifting problem. Brief for United States 34. The path of our Commerce Clause decisions has not always run smooth, see United States v. Lopez, 514 U. S. 549, 552–559 (1995), but it is now well established that Congress has broad authority under the Clause. We have recognized, for example, that “[t]he power of Congress over interstate commerce is not confined to the regulation of commerce among the states,” but extends to activities that “have a substantial effect on interstate commerce.” United States v. Darby, 312 U. S. 100, 118–119 (1941). Congress’s power, moreover, is not limited to regulation of an activity that by itself substantially affects interstate commerce, but also extends to activities that do so only when aggregated with similar activities of others. See Wickard, 317 U. S., at 127–128.

Given its expansive scope, it is no surprise that Congress has employed the commerce power in a wide variety of ways to address the pressing needs of the time.

Here he is thinking like a lawyer, not a politician, and he is considering the argument with respect. It's not impossible as a legal argument, he is saying, at first glance. The Commerce Clause cases show that precedent is that the Commerce Clause is very broad. But then he lists why he can't go that far so as to rule that the government has the authority under the Commerce Act, due to what he views as constitutional issues:
But Congress has never attempted to rely on that power to compel individuals not engaged in commerce to purchase an unwanted product.
I don't think that's actually factual, in that when my mom went on Social Security, she had to get medical coverage and she had to pay for the coverage the government didn't take care of. It was not a option. But let's continue:
Legislative novelty is not necessarily fatal; there is a first time for everything. But sometimes “the most telling indication of [a] severe constitutional problem . . . is the lack of historical precedent” for Congress’s action. Free Enterprise Fund v. Public Company Accounting Oversight Bd., 561 U. S. ___, ___ (2010) (slip op., at 25) (internal quotation marks omitted). At the very least, we should “pause to consider the implications of the Government’s arguments” when confronted with such new conceptions of federal power. Lopez, supra, at 564.

The Constitution grants Congress the power to “regulate Commerce.” Art. I, §8, cl. 3 (emphasis added). The power to regulate commerce presupposes the existence of commercial activity to be regulated. If the power to “regulate” something included the power to create it, many of the provisions in the Constitution would be superfluous….

As expansive as our cases construing the scope of the commerce power have been, they all have one thing in common: They uniformly describe the power as reaching “activity.” It is nearly impossible to avoid the word when quoting them. …

The individual mandate, however, does not regulate existing commercial activity. It instead compels individuals to become active in commerce by purchasing a product, on the ground that their failure to do so affects interstate commerce. Construing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast domain to congressional authority. Every day individuals do not do an infinite number of things. In some cases they decide not to do something; in others they simply fail to do it. Allowing Congress to justify federal regulation by pointing to the effect of inaction on commerce would bring countless decisions an individual could potentially make within the scope of federal regulation, and —under the Government’s theory— empower Congress to make those decisions for him….

Indeed, the Government’s logic would justify a mandatory purchase to solve almost any problem. See Seven-Sky, 661 F. 3d, at 14–15 (noting the Government’s inability to “identify any mandate to purchase a product or service in interstate commerce that would be unconstitutional” under its theory of the commerce power). To consider a different example in the health care market, many Americans do not eat a balanced diet. That group makes up a larger percentage of the total population than those without health insurance. See, e.g., Dept. of Agriculture and Dept. of Health and Human Services, Dietary Guidelines for Americans 1 (2010). The failure of that group to have a healthy diet increases health care costs, to a greater extent than the failure of the uninsured to purchase insurance. See, e.g., Finkelstein, Trogdon, Cohen, & Dietz, Annual Medical Spending Attributable to Obesity: Payer-and Service-Specific Estimates, 28 Health Affairs w822 (2009) (detailing the “undeniable link between rising rates of obesity and rising medical spending,” and estimating that “the annual medical burden of obesity has risen to almost 10 percent of all medical spending and could amount to $147 billion per year in 2008”). Those increased costs are borne in part by other Americans who must pay more, just as the uninsured shift costs to the insured. See Center for Applied Ethics, Voluntary Health Risks: Who Should Pay?, 6 Issues in Ethics 6 (1993) (noting “overwhelming evidence that individuals with unhealthy habits pay only a fraction of the costs associated with their behaviors; most of the expense is borne by the rest of society in the form of higher insurance premiums, government expenditures for health care, and disability benefits”). Congress addressed the insurance problem by ordering everyone to buy insurance. Under the Government’s theory, Congress could address the diet problem by ordering everyone to buy vegetables. See Dietary Guidelines, supra, at 19 (“Improved nutrition, appropriate eating behaviors, and increased physical activity have tremendous potential to . . . reduce health care costs”).

People, for reasons of their own, often fail to do things that would be good for them or good for society. Those failures—joined with the similar failures of others—can readily have a substantial effect on interstate commerce. Under the Government’s logic, that authorizes Congress to use its commerce power to compel citizens to act as the Government would have them act.

That is not the country the Framers of our Constitution envisioned. To an economist, perhaps, there is no difference between activity and inactivity; both have measurable economic effects on commerce. But the distinction between doing something and doing nothing would not have been lost on the Framers, who were “practical statesmen,” not meta-physical philosophers. Industrial Union Dept., AFL–CIO v. American Petroleum Institute, 448 U. S. 607, 673 (1980) (Rehnquist, J., concurring in judgment). As we have explained, “the framers of the Constitution were not mere visionaries, toying with speculations or theories, but practical men, dealing with the facts of political life as they understood them, putting into form the government they were creating, and prescribing in language clear and intelligible the powers that government was to take.” South Carolina v. United States, 199 U. S. 437, 449 (1905). The Framers gave Congress the power to regulate commerce, not to compel it, and for over 200 years both our decisions and Congress’s actions have reflected this understanding. There is no reason to depart from that understanding now….

I think perhaps the Chief Justice forgot that the ACA already does punish certain health habits:
Simply put, the community-rating provision requires insurers to calculate an individual’s insurance premium based on only four factors: (i) whether the individual’s plan covers just the individual or his family also, (ii) the “rating area” in which the individual lives, (iii) the individual’s age, and (iv) whether the individual uses tobacco.
If you smoke, the insurance companies can charge you more under the ACA. That is in addition to the taxes you pay when you buy cigarettes. Why would it be so terrible if they charged obese people more for insuance, too? I don't really understand that argument, so I can't explain it to you. I can only explain what makes sense to me.

The decision makes an assumption next about young people and why they don't buy insurance:

The individual mandate’s regulation of the uninsured as a class is, in fact, particularly divorced from any link to existing commercial activity. The mandate primarily affects healthy, often young adults who are less likely to need significant health care and have other priorities for spending their money.
The dissenting opinion seems to labor under that delusion as well. Judges are cloistered from the problems of those without a lot of money, I guess, so they may not realize that young people don't buy insurance not because they'd rather get an iPad, but because even if they do nothing fun ever, they still don't have enough money to buy insurance. Think of all the young people coming out of college who can't find a job currently. What would they pay insurance premiums with? Even those who do work often aren't yet making much, so they can't buy insurance and gamble that they hope they won't need it. But all people want insurance if they can afford it, if only because you just never know.

Under the current system, if you don't buy insurance until you get sick, you may not be able to get any affordable insurance after that, and young people get cancer and other costly diseases too. So I must tell the justices that young people are not irresponsible enough not to want it. The economy has squeezed them out, in many, many cases. That's exactly why public opinion polls find that Americans really like the provisions of ACA that already are in effect, including the provision that young people can stay on their parents' health insurance until they are 26. That wouldn't be as popular as it is if most young people just didn't care about getting insurance. Clearly many of them wanted it but could not afford it until ACA was passed.

Roberts concludes his argument:

It is precisely because these individuals, as an actuarial class, incur relatively low health care costs that the mandate helps counter the effect of forcing insurance companies to cover others who impose greater costs than their premiums are allowed to reflect. See 42 U. S. C. §18091(2)(I) (recognizing that the mandate would “broaden the health insurance risk pool to include healthy individuals, which will lower health insurance premiums”). If the individual mandate is targeted at a class, it is a class whose commercial inactivity rather than activity is its defining feature….

Everyone will likely participate in the markets for food, clothing, transportation, shelter, or energy; that does not authorize Congress to direct them to purchase particular products in those or other markets today. The Commerce Clause is not a general license to regulate an individual from cradle to grave, simply because he will predictably engage in particular transactions. Any police power to regulate individuals as such, as opposed to their activities, remains vested in the States.

So that's why the Commerce Clause argument didn't fly with the majority. There's also a section on why the Congress can't do it as a kind of exception, under its powers to enact "necessary and proper" laws. The commerce power doesn't authorize the mandate, they concluded, so it can't be "necessary and proper".

Did Congress Have Authority Under Its Power to "Lay and Collect Taxes"?

However, that wasn't the end of the analysis, because, as you'll remember, the government had raised a second, alternative argument, that Congress has the power to "lay and collect Taxes," in Article I of the Constitution.

Here's how Roberts begins to explain how he analyzes the tax argument:

The Government’s tax power argument asks us to view the statute differently than we did in considering its commerce power theory. In making its Commerce Clause argument, the Government defended the mandate as a regulation requiring individuals to purchase health insurance. The Government does not claim that the taxing power allows Congress to issue such a command. Instead, 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.

The text of a statute can sometimes have more than one possible meaning. To take a familiar example, a law that reads “no vehicles in the park” might, or might not, ban bicycles in the park. And it is well established that if a statute has two possible meanings, one of which violates the Constitution, courts should adopt the meaning that does not do so. Justice Story said that 180 years ago: “No court ought, unless the terms of an act rendered it unavoidable, to give a construction to it which should involve a violation, however unintentional, of the constitution.” Parsons v. Bedford, 3 Pet. 433, 448–449 (1830). Justice Holmes made the same point a century later: “[T]he rule is settled that as between two possible interpretations of a statute, by one of which it would be unconstitutional and by the other valid, our plain duty is to adopt that which will save the Act.” Blodgett v. Holden, 275 U. S. 142, 148 (1927) (concurring opinion).

The most straightforward reading of the mandate is that it commands individuals to purchase insurance. After all, it states that individuals “shall” maintain health insurance. 26 U. S. C. §5000A(a). Congress thought it could enact such a command under the Commerce Clause, and the Government primarily defended the law on that basis. But, for the reasons explained above, the Commerce Clause does not give Congress that power. Under our precedent, it is therefore necessary to ask whether the Government’s alternative reading of the statute—that it only imposes a tax on those without insurance—is a reasonable one.

Did you notice something important? If it's a tax, it's a tax only on those who refuse to get insurance even though they could afford to do so. Do you know how many that is expected to be? 2% of the population. And notice the difference between the mandate -- thou shalt buy insurance -- and the tax -- we want you to get insurance, but if you don't you can pay a penalty instead. And let's notice the terms of the penalty. What happens to you if you fail to get insurance?:
Under the mandate, if an individual does not maintain health insurance, the only consequence is that he must make an additional payment to the IRS when he pays his taxes. See §5000A(b). That, according to the Government, means the mandate can be regarded as establishing a condition—not owning health insurance—that triggers a tax—the required payment to the IRS. Under that theory, the mandate is not a legal command to buy insurance. Rather, it makes going without insurance just another thing the Government taxes, like buying gasoline or earning income. And if the mandate is in effect just a tax hike on certain taxpayers who do not have health insurance, it may be within Congress’s constitutional power to tax.

The question is not whether that is the most natural interpretation of the mandate, but only whether it is a “fairly possible” one. Crowell v. Benson, 285 U. S. 22, 62 (1932). As we have explained, “every reasonable construction must be resorted to, in order to save a statute from unconstitutionality.” Hooper v. California, 155 U. S. 648, 657 (1895). The Government asks us to interpret the mandate as imposing a tax, if it would otherwise violate the Constitution. Granting the Act the full measure of deference owed to federal statutes, it can be so read, for the reasons set forth below.

The exaction the Affordable Care Act imposes on those without health insurance looks like a tax in many respects. The “[s]hared responsibility payment,” as the statute entitles it, is paid into the Treasury by “tax-payer[s]” when they file their tax returns. 26 U. S. C. §5000A(b). It does not apply to individuals who do not pay federal income taxes because their household income is less than the filing threshold in the Internal Revenue Code. §5000A(e)(2). For taxpayers who do owe the payment, its amount is determined by such familiar factors as taxable income, number of dependents, and joint filing status. §§5000A(b)(3), (c)(2), (c)(4). The requirement to pay is found in the Internal Revenue Code and enforced by the IRS, which—as we previously explained—must assess and collect it “in the same manner as taxes.” Supra, at 13–14. This process yields the essential feature of any tax: it produces at least some revenue for the Government. United States v. Kahriger, 345 U. S. 22, 28, n. 4 (1953). Indeed, the payment is expected to raise about $4 billion per year by 2017. Congressional Budget Office, Payments of Penalties for Being Uninsured Under the Patient Protection and Affordable Care Act (Apr. 30, 2010), in Selected CBO Publications Related to Health Care Legislation, 2009–2010, p. 71 (rev. 2010).

It is of course true that the Act describes the payment as a “penalty,” not a “tax.” But while that label is fatal to the application of the Anti-Injunction Act, supra, at 12–13, it does not determine whether the payment may be viewed as an exercise of Congress’s taxing power. It is up to Congress whether to apply the Anti-Injunction Act to any particular statute, so it makes sense to be guided by Congress’s choice of label on that question. That choice does not, however, control whether an exaction is within Congress’s constitutional power to tax.

That's not so awful. And for lovers of freedom, you do still get to choose. If you absolutely don't want insurance, you can refuse it. Just pay the penalty, which is always going to be no more than the cost of the insurance you forego.

The decision goes on to cite a couple of cases that provide precedent that just because you call something "Not a Tax" that doesn't end the investigation of what in reality it is if you are trying to decide if Congress has the taxing authority under the Constitution. For example, in New York v. United States, this court writes, the court upheld as a tax something that was instead called a "surcharge" on out-of-state nuclear waste shipments, part of which was paid to the federal treasury. So does the penalty in the Affordable Care Act match those cases? Does it fall within the Congress's taxing power? Or more precisely, does Congress have the authority to make you pay, whatever you call it? The decision quotes cases that say, in effect, that it isn't the word that matters but how it works. For example, from Nelson v. Sears, Roebuck:

“In passing on the constitutionality of a tax law, we are concerned only with its practical operation, not its definition or the precise form of descriptive words which may be applied to it”
And from United States v. Soleto:
“That the funds due are referred to as a ‘penalty’ . . . does not alter their essential character as taxes”
Did you see that? The very same situation arose before, whether calling something a penalty made it not a tax, and the answer was no. The word doesn't matter in this context but the activity. That case is from 1978, so it's clear, I think, that the court didn't make it up out of whole cloth. There is precedent, using the exact word "penalty" and it was interpreted by the court as a tax and hence within Congress's authority to levy.

Roberts also cites a case where the law called something a tax when the Supreme Court ruled instead that it was a penalty, Drexel Furniture. So in this part of the analysis, words are not decisive. What matters is how does it work? Is it punitive, for example? Penalty implies getting slapped for doing something you shouldn't do or didn't do that you should have.

So is it reasonable? Can it be interpreted that way in this case? Here's the court's reasoning on why it is not punitive and hence a tax:

The same analysis here suggests that the shared re- sponsibility payment may for constitutional purposes be considered a tax, not a penalty: First, for most Americans the amount due will be far less than the price of insurance, and, by statute, it can never be more.8 It may often be a reasonable financial decision to make the payment rather than purchase insurance, unlike the “prohibitory” financial punishment in Drexel Furniture. 259 U. S., at 37. Second, the individual mandate contains no scienter requirement. Third, the payment is collected solely by the IRS through the normal means of taxation—except that the Service is not allowed to use those means most suggestive of a punitive sanction, such as criminal prosecution. See §5000A(g)(2)....

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.

_______
8 In 2016, for example, individuals making $35,000 a year are expected to owe the IRS about $60 for any month in which they do not have health insurance. Someone with an annual income of $100,000 a year would likely owe about $200. The price of a qualifying insurance policy is projected to be around $400 per month. See D. Newman, CRS Report for Congress, Individual Mandate and Related Information Requirements Under PPACA 7, and n. 25 (2011).

Cigarettes, for example, cost more because of taxes designed to influence behavior, he points out. Scienter just means basically that what you did you knew you were doing. Guilty knowledge. It implies in criminal law that you meant to do it, it was willful, and yet you knew it was wrong.

But here, he concludes, there is no breaking of a law involved, where punishment enters the picture:

While the individual mandate clearly aims to induce the purchase of health insurance, it need not be read to declare that failing to do so is unlawful. Neither the Act nor any other law attaches negative legal consequences to not buying health insurance, beyond requiring a payment to the IRS. The Government agrees with that reading, confirming that if someone chooses to pay rather than obtain health insur- ance, they have fully complied with the law.Brief for United States 60–61; Tr. of Oral Arg. 49–50 (Mar. 26, 2012).

Indeed, it is estimated that four million people each year will choose to pay the IRS rather than buy insurance. See Congressional Budget Office, supra, at 71. We would expect Congress to be troubled by that prospect if such conduct were unlawful. That Congress apparently regards such extensive failure to comply with the mandate as tolerable suggests that Congress did not think it was creating four million outlaws. It suggests instead that the shared responsibility payment merely imposes a tax citi- zens may lawfully choose to pay in lieu of buying health insurance.

It's not criminal to buy cigarettes, as long as you are willing to pay the tax. Similarly, if you refuse to buy insurance even though you can afford to, there is no punishment other than paying what you are supposed to under the law, an amount that could very well be less than what you'd pay for the insurance.

But what about the argument that this is a direct tax? Some are screaming that this is raising taxes. Is it? Is it a poll tax, or capitation? The court:

A tax on going without health insurance does not fall within any recognized category of direct tax. It is not a capitation. Capitations are taxes paid by every person, “without regard to property, profession, or any other circumstance.” Hylton, supra, at 175 (opinion of Chase, J.) (emphasis altered). The whole point of the shared responsibility payment is that it is triggered by specific circumstances—earning a certain amount of income but not obtaining health insurance. The payment is also plainly not a tax on the ownership of land or personal property. The shared responsibility payment is thus not a direct tax that must be apportioned among the several States.
But that raises a logic question. If it's not OK to make people do what they don't want to do under the Commerce Clause, why is it OK to tax them for not doing what they don't want to do? What's the difference?
There may, however, be a more fundamental objection to a tax on those who lack health insurance. Even if only a tax, the payment under §5000A(b) remains a burden that the Federal Government imposes for an omission, not an act. If it is troubling to interpret the Commerce Clause as authorizing Congress to regulate those who abstain from commerce, perhaps it should be similarly troubling to permit Congress to impose a tax for not doing something.

Three considerations allay this concern. First, and most importantly, it is abundantly clear the Constitution does not guarantee that individuals may avoid taxation through inactivity. A capitation, after all, is a tax that everyone must pay simply for existing, and capitations are expressly contemplated by the Constitution. The Court today holds that our Constitution protects us from federal regulation under the Commerce Clause so long as we abstain from the regulated activity. But from its creation, the Constitution has made no such promise with respect to taxes. See Letter from Benjamin Franklin to M. Le Roy (Nov. 13, 1789) (“Our new Constitution is now established . . . but in this world nothing can be said to be certain, except death and taxes”). Whether the mandate can be upheld under the Commerce Clause is a question about the scope of federal authority. Its answer depends on whether Congress can exercise what all acknowledge to be the novel course of directing individuals to purchase insurance. Congress’s use of the Taxing Clause to encourage buying something is, by contrast, not new. Tax incentives already promote, for example, purchasing homes and professional educations. See 26 U. S. C. §§163(h), 25A. 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. Upholding the individual mandate under the Taxing Clause thus does not recognize any new federal power. It determines that Congress has used an existing one.

Second, he writes, this isn't punitive within the strict guidelines of taxing authority. There is a line, but this doesn't cross it. Third, he notes the difference between the consequences that would result if the ACA could be enforced under the Commerce Clause as opposed to being a tax:
Third, although the breadth of Congress’s power to tax is greater than its power to regulate commerce, the taxing power does not give Congress the same degree of control over individual behavior. Once we recognize that Congress may regulate a particular decision under the Commerce Clause, the Federal Government can bring its full weight to bear. Congress may simply command individuals to do as it directs. An individual who disobeys may be subjected to criminal sanctions. Those sanctions can include not only fines and imprisonment, but all the attendant consequences of being branded a criminal: deprivation of otherwise protected civil rights, such as the right to bear arms or vote in elections; loss of employment opportunities; social stigma; and severe disabilities in other controversies, such as custody or immigration disputes.

By contrast, Congress’s authority under the taxing power is limited to requiring an individual to pay money into the Federal Treasury, no more. If a tax is properly paid, the Government has no power to compel or punish individuals subject to it. We do not make light of the severe burden that taxation—especially taxation motivated by a regulatory purpose—can impose. But imposition of a tax nonetheless leaves an individual with a lawful choice to do or not do a certain act, so long as he is willing to pay a tax levied on that choice.

The Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax. Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.

For those whose primary concern is freedom, here's where in the decision you find it addressed. The decision goes on to discuss the Medicaid expansion but I'll stop here. You can read a number of former attorneys general and how they view the decision in Time magazine, beginning here. And Jack Balkin, who helped write up some of the arguments the court considered on the tax powers issue, points out that this case was always about the tax. And you might find it of interest to read what Judge Richard Posner wrote about the decision, since he is the judge who just tossed out Apple and Motorola's patent dispute, saying neither could prove damages and it was against the public interest to give an injunction to either of them. He is viewed as a conservative, but he always thought the mandate would be approved and should be, under the Commerce Clause:
The young people who refuse to buy health insurance because they don't expect to get sick and if they do go to emergency rooms—and are billed, but just try collecting!—are free riders, like draft dodgers. They increase health costs for the rest of us. The chief justice, echoing Justice Scalia's "broccoli" comment at the oral argument, rejected (as did the four dissenters, and so that is now the view of a majority of the justices) the Commerce Clause ground for the mandate, saying that to accept that ground would mean that "Congress could address the diet problem by ordering everyone to buy vegetables." This argument, reassuring though it is to our obese population, confuses separate constitutional provisions. The Commerce Clause would empower Congress to order everyone to buy vegetables, because the market for most vegetables is interstate, but the "liberty" protected against the federal government by the Fifth Amendment would doubtless be interpreted to forbid such an imposition, just as it would be interpreted to forbid a federal law requiring everyone to be in bed with the lights out by 10 p.m. in order to economize on the use of electricity and, by doing so, reduce carbon emissions from electrical generating plants.

I am surprised, finally, by the lifelessness of the joint dissenting opinion.

As you can see, whatever one's politics, thinking persons can still think, if they just decide to.

I hope this is helpful to you. I'm not a lawyer, as you know, but I am a paralegal. So legalese is not a foreign language to me, and if this makes it easier for you to understand the decision, I'm really glad. If you see errors, let me know. Everyone makes errors, and I'm no exception, but this is my best effort. And yes, I know people call the ACA "ObamaCare" but it seems rude to me since it was coined to speak against the bill, so I prefer not to call it that.

Update: There is now some vaguely sourced (law clerks, secretaries) reports that Chief Justice Roberts did in fact switch his vote, originally being on the side of striking down the law. And here are some more reactions from legal scholars, including Lawrence Tribe, who taught law to both President Obama and Chief Justice Roberts, and who predicted the Supreme Court would uphold the law. And here's some indication that it was, in fact, the arguments [PDF] at the hearing of the government’s lawyer, Solicitor General Donald Verrilli, that ultimately resonated and prevailed. For example, under questioning Verilli said this:

JUSTICE SCALIA: But fees, you know, license fees, fees for a hunting license, everybody knows those are taxes. I mean, I don't think there is as much of a difference between a fee and a tax as there is between a penalty and a tax.

GENERAL VERRILLI: And that, and -- and I think in terms of the tax power, I think it's useful to separate this into two questions. One is a question of characterization. Can this be characterized as a tax; and second, is it a constitutional exercise of the power?

With respect to the question of characterization, the -- this is -- in the Internal Revenue Code, it is administered by the IRS, it is paid on your Form 1040 on April 15th, I think -

JUSTICE GINSBURG: But yesterday you told me -- you listed a number of penalties that are enforced through the tax code that are not taxes and they are not penalties related to taxes.

GENERAL VERRILLI: They may still be exercise of the tax -- exercises of the taxing power, Justice Ginsburg, as this is, and I think there isn't a case in which the Court has, to my mind, suggested anything that bears this many indicia of a tax can't be considered as an exercise of the taxing power. In fact, it seems to me the License Tax Cases point you in the opposite direction. And beyond that your -- it seems to me the right way to think about this question is whether it is capable of being understood as an exercise of the tax -

JUSTICE SCALIA: The president said it wasn't a tax, didn't he?

GENERAL VERRILLI: Well, Justice Scalia, what the -- two things about that. First, as it seems to me, what matters is what power Congress was exercising. And they were -- and I think it's clear that the -- they were exercising the tax power as well as -

JUSTICE SCALIA: You're making two arguments. Number one, it's a tax; and number two, even if it isn't a tax, it's within the taxing power. I'm just addressing the first.

GENERAL VERRILLI: What the president said -

JUSTICE SCALIA: Is it a tax or not a tax? The president didn't think it was.

GENERAL VERRILLI: The president said it wasn't a tax increase because it ought to be understood as an incentive to get people to have insurance. I don't think it's fair to infer from that anything about whether that is an exercise of the tax power or not.

Emphasis mine. Justice Kagan then asked for more clarification:
JUSTICE KAGAN: I suppose, though, General, one question is whether the determined efforts of Congress not to refer to this as a tax make a difference. I mean, you're suggesting we should just look to the practical operation. We shouldn't look at labels. And that seems right, except that here we have a case in which Congress determinedly said, this is not a tax, and the question is why should that be irrelevant?

GENERAL VERRILLI: I don't think that that's a fair characterization of the actions of Congress here, Justice Kagan. On the -- December 23rd, a point of constitutional order was called, too, in fact, with respect to this law. The floor sponsor, Senator Baucus, defended it as an exercise of the taxing power. In his response to the point of order, the Senate voted 60 to 39 on that proposition. The legislative history is replete with members of Congress explaining that this law is constitutional as an exercise of the taxing power. It was attacked as a tax by its opponents. So I don't think this is a situation where you can say that Congress was avoiding any mention of the tax power.

It would be one thing if Congress explicitly disavowed an exercise of the tax power. But given that it hasn't done so, it seems to me that it's -- not only is it fair to read this as an exercise of the tax power, but this Court has got an obligation to construe it as an exercise of the tax power, if it can be upheld on that basis.

From the transcript, it's apparent that the argument that the court eventually adopted was not its invention; Verrilli, who for some reason never gets full credit, it seems, actually solidly placed it before the court himself.

One can't help but recall that President Obama did teach Constitutional Law. By the way, here's a map of where the uninsured in America live.

And finally, look how many of the so-called experts called this one completely wrong. That's been my experience with "experts" all the time I've been doing Groklaw and hence paying attention to outcomes. So, what can we learn? Read it for yourself. Never go by what some "expert" tells you. They might be pushing an agenda (did that mean-spirited, ad hominem video of Verrilli pausing repeatedly in oral argument persuade you that he was incompetent? -- and yet he prevailed), they might be unqualified, they might be right or wrong, but you'll never know unless you read the original materials yourself. That's exactly why I take the time to always make them available to you.

Never think that you can't understand something if you make the necessary effort or that relying on what others describe is necessarily reliable. You can see from this incident that it could be profoundly misleading. There is a difference between propaganda and information.

You might find this book by economist Albert O. Hirschman of interest, The Rhetoric of Reaction: Perversity, Futility, Jeopardy, highlighted and described by Atul Gawande in The New Yorker:

He examined the structure of arguments—in the eighteenth century, against expansions of basic rights, such as freedom of speech, thought, and religion; in the nineteenth century, against widening the range of citizens who could vote and participate in government; and, in the twentieth century, against government-assured minimal levels of education, economic well-being, and security. In each instance, the reforms aimed to address deep, pressing, and complex societal problems—wicked problems, as we might call them. The reforms pursued straightforward goals but required inherently complicated, difficult-to-explain means of implementation. And, in each instance, Hirschman observed, reactionary argument took three basic forms: perversity, futility, and jeopardy.
It seems even the propaganda is nothing new.

Update 2: And speaking of propaganda, there is a new unnamed source claiming, via an article by Paul Campos, professor of law at the University of Colorado, in Slate, that the earlier Jan Crawford CBS News piece was exactly that, propaganda by her unnamed sources:

My source insists that “most of the material in the first three quarters of the joint dissent was drafted in Chief Justice Roberts’ chambers in April and May.” Only the last portion of what eventually became the joint dissent was drafted without any participation by the chief justice.

This source insists that the claim that the joint dissent was drafted from scratch in June is flatly untrue. Furthermore, the source characterizes claims by Crawford’s sources that “the fact that the joint dissent doesn’t mention [sic] Roberts’ majority … was a signal the conservatives no longer wished to engage in debate with him” as “pure propagandistic spin,” meant to explain away the awkward fact that while the first 46 pages of the joint dissent never even mention Roberts’ opinion for the court (this is surely the first time in the court’s history that a dissent has gone on for 13,000 words before getting around to mentioning that it is, in fact, dissenting), the last 19 pages do so repeatedly.

So, dueling anonymous sources. Who to believe? How is one to tell? How about nobody, and just close the chapter until someone who actually does know and is authorized to speak does so on the record.

  


Explaining the Legalese of the US Supreme Court's Ruling on the Affordable Care Act ~ pj - Updated 2Xs | 355 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Correction thread
Authored by: nsomos on Saturday, June 30 2012 @ 04:16 PM EDT
Please post corrections here.
A summary in the title may be helpful.

Thnx PJ -> Thanks PJ

[ Reply to This | # ]

§5000? §6671?
Authored by: SLi on Saturday, June 30 2012 @ 04:36 PM EDT

Is this thing is a monster law with more than 6000 sections, or do they leave large gaps for some reason?

If it is such a monster, is there a good reason for it?

[ Reply to This | # ]

Off Topic Thread
Authored by: complex_number on Saturday, June 30 2012 @ 04:37 PM EDT
Anyone posting on topic will be made to Push water up a Hill
:)


---
Ubuntu & 'apt-get' are not the answer to Life, The Universe & Everything which
is of course, "42" or is it 1.618?

[ Reply to This | # ]

News Picks discussion Thread
Authored by: complex_number on Saturday, June 30 2012 @ 04:39 PM EDT
Please Remember to change the post mode to HTML when quoting a HTML Link.


---
Ubuntu & 'apt-get' are not the answer to Life, The Universe & Everything which
is of course, "42" or is it 1.618?

[ Reply to This | # ]

An entreaty
Authored by: Anonymous on Saturday, June 30 2012 @ 04:42 PM EDT
I have been seeing some pretty awful stuff over on places like twitter, etc., to

the point where this whole debate has me losing faith in my fellow Americans.
Some people are comparing this bill/ruling to Nazi Germany, which is one of
the stupidest things I've ever heard, even if you hate it. Others are
threatening
to move to Canada, which is stupid in other ways. I've come to expect a high
quality of dialog from Groklaw and its commenters. Please don't let me down.

[ Reply to This | # ]

  • An entreaty - Authored by: Anonymous on Sunday, July 01 2012 @ 12:12 PM EDT
  • An entreaty - Authored by: Anonymous on Sunday, July 01 2012 @ 07:56 PM EDT
  • don't come to Canada - Authored by: Anonymous on Sunday, July 01 2012 @ 09:02 PM EDT
    • And - Authored by: Anonymous on Monday, July 02 2012 @ 06:59 AM EDT
Explaining the Legalese of the US Supreme Court's Ruling on the Affordable Care Act ~ pj
Authored by: Anonymous on Saturday, June 30 2012 @ 05:26 PM EDT
That surprised me, because I didn't think you would be greatly interested.

It's of interest because it's the most polarizing political issue of the last decade (except, perhaps, for the Afghan/Iraq war).

On the one side you have people who see it as a vast expansion of Federal government spending and power. Well beyond what a straight-forward reading of the Constitution would seem to allow.

On the other hand, you have people who simply want to see everyone in the US have access to medicine and medical treatments and, well, the Constitution is a Living Document isn't it? Surely we can find a way for the Federal government to accommodate them.

[ Reply to This | # ]

US vs. Rwanda
Authored by: arthurpaliden on Saturday, June 30 2012 @ 05:52 PM EDT
What is really interesting is that a Third World country like Rwanda, that has
just pulled itself out of a civil war, has got 91% of its people covered by a
nation health insurance plan. Yes they do not get whizz-bang Star Trek type
medical services but then they are not at the top of the First World tree like
the United States.

However, what they do get is the type of basic preventive medicine and medical
treatments that improve the quality of life for the majority of people and
reduces the overall cost burden on their society as a whole.

---
Audio Books On Demand, No CDs, No File Managment, Just Drag Drop Play,
www.audiopod.ca

[ Reply to This | # ]

Here is the real issue
Authored by: Anonymous on Saturday, June 30 2012 @ 05:59 PM EDT
Obamacare is a an attempted band aid over the real issue. The
health care industry is broken as a business model. Trying to
solve this issue via government fiat is ridiculous. The
industry is held in a strangle hold by the AMA, government and
the insurance companies. We should apply technology and
methods used by other industries.

[ Reply to This | # ]

xxx
Authored by: BJ on Saturday, June 30 2012 @ 06:04 PM EDT
That's a long apologetic introduction to a discussion of a political
issue. 

Am I right to deduce that the disclaimer:
"In this message, I won't be expressing my own views, or
telling you what you should or should not think about ..."
essentially removes the offensiveness of such a discussion here?

bjd


[ Reply to This | # ]

Commerce Clause prohibits what???
Authored by: Anonymous on Saturday, June 30 2012 @ 06:08 PM EDT
Wow. Just a few years ago in Gonzales vs Ranch, where the Supreme Court has held that the Federal Government has the authority under the Interstate Commerce Clause to regulate one's marijuana growing of five plants for their own consumption. The argument was that yeah, that affects the interstate commerce. You really want to read this ridiculous decision. So now Interstate Commerce Clause should now apply to everything at all - you clean your own house, so you're not hiring a maid, and this affects the maid workforce market - cleaning your own house is an activity the Congress can regulate over the Commerce Clause. Now how the one is supposed to respect the Supreme Court when they make the decisions like that?

[ Reply to This | # ]

Explaining the Legalese of the US Supreme Court's Ruling on the Affordable Care Act ~ pj
Authored by: Anonymous on Saturday, June 30 2012 @ 06:18 PM EDT
I wonder what the difference would be, between having written that there is
a tax penalty *not* to something, to have written this as a tax deduction for
*doing* that same thing.

Except, of course, that with the current an-ethical press, the tar would be
applied differently. That should not change the constitutionality in either,
provided the equations give the same results.

[ Reply to This | # ]

Obesity and Health
Authored by: Wol on Saturday, June 30 2012 @ 06:55 PM EDT
PJ wondered if we should tax obesity ...

There is a BIG problem with that, in that - as I keep on fulminating - people
consistently and regularly confuse cause with effect.

Obesity is CAUSED BY ill health. Okay, that's not always true, but there's a lot
of evidence for it if you care to look. My wife is a perfect example, sadly. Her
illness has the double (indeed, triple) whammy of compulsive behaviour making
her over-eat, tiredness and exhaustion preventing any exercise, and then the
drugs are well known for causing binge eating!

And I can't remember the study, but it was pretty recent, that concluded
"lack of exercise" was a *consequence*, not a *cause* of obesity. I
certainly think I'm unusual where I'm overweight because I don't exercise, but I
find it very hard to get exercise because of my wife's illness. Even simple
things like the 400 yard trip to the shops, we usually take the car because my
wife can't walk it. If she'd let me go on my own, I'd walk like a shot, but if
we walk together I nearly always end up getting the car to fetch her because she
can't walk home. So we take the car anyway :-(

So, in conclusion, be VERY careful in what you tax to try and modify behaviour.
It's VERY easy to tax the wrong thing and encourage what you're trying to
prevent, because you've applied common sense. Remember, common sense is VERY
OFTEN wrong. Any physicist will tell you that!

Cheers,
Wol

[ Reply to This | # ]

I was once one of those 'young people without insurance who needed health care'
Authored by: Anonymous on Saturday, June 30 2012 @ 07:01 PM EDT
at a time when I was making $12K/year I racked up $18K in medical bills to have
my appendix removed.

I obviously could not pay the bill, but for a few years I paid $1K/year. The
hospital turned the account over to collection agencies who threatened to take
me to court and take 25% of my pay. I explained my finances to them and pointed
out that if they did so, I would have no choice but to declare bankruptcy and
they would end up with nothing, but that I was willing to continue to pay. They
were unhappy that I was paying them the $1k in a lump sum each year, but I
explained that I was getting that money by putting 8% of my pay into my
companies employee stock program, which purchased stock at a 15% discount (which
I then sold and paid to them). I could withdraw from the program and pay them
the money directly, but they would end up getting less from me each year.

The collection agency refused to accept the continuing $1k/year payments, and
after a year or so of threats, dropped everything. A couple of years later I got
a new job that paid twice as much as I was earning before, and I could have paid
off the remaining bill, but by that time they had already done so much, and
claimed that the reason they were being so unreasonable with me was because if
the bill go too old I didn't owe it any more that the they ended up with nothing
as a result of their greed.

<rant>

In any case, I believe that the biggest reason for the unreasonably high costs
of medical care in the US is the insurance companies.

My current insurance company gives me a statement of each medical bill they pay,
This statement shows

1. what they were "billed"
2. what the amount is that they medical provider accepted as "payment in
full" from the insurance company
3. what amount of the "payment in full" I actually have to pay.

If I could pay the amount that the insurance companies get away with paying as
"payment in full", I would not need insurance!

As an example, a recent round of routine lab tests

The "bill" (what they would have charged me if I paid them directly)
was for $1250

"Payment in Full" from the insurance company was $124 (of that I owed
$12)

by focusing on the 'discount' that they get, the beancounters at the insurance
companies drive the 'regular' price of service up to ridiculous levels, which
almost nobody actually pays (either you have insurance, or you can't afford to
pay the resulting bill)
</rant>

[ Reply to This | # ]

Explaining the Legalese of the US Supreme Court's Ruling on the Affordable Care Act ~ pj
Authored by: Anonymous on Saturday, June 30 2012 @ 07:16 PM EDT
Pj, Thanks for taking the time to explain this.

[ Reply to This | # ]

community rating provision
Authored by: Anonymous on Saturday, June 30 2012 @ 09:24 PM EDT

If you smoke, the insurance companies can charge you more under the ACA. That is in addition to the taxes you pay when you buy cigarettes. Why would it be so terrible if they charged obese people more for insuance, too? I don't really understand that argument, so I can't explain it to you. I can only explain what makes sense to me.

I'll take a stab at this, with the caveat that I don't have a lot of experience interpreting these things. I think the line of reasoning that best copes with this goes something like this:

  1. The status quo is that the determination of rates / risk pools is at significant discretion of the insurance companies, as private entities not directly answerable to the constitutional restrictions faced by the branches of government.
  2. The government is imposing by legislation a number of significant restrictions on said discretion.
  3. The government has opted not to prohibit these private entities from considering tobacco consumption.

This would seem to me to fall within the same aspect of pursuing interpretations that meet constitutional muster when they are available. By that line of argument, the government could not directly penalize you for unhealthy eating (at least under the commerce clause), but are under no obligation to prevent private parties from doing so.

[ Reply to This | # ]

This is a crossing of a line
Authored by: Anonymous on Sunday, July 01 2012 @ 02:09 AM EDT
And if you doubt that, let me ask you this:

What do you suppose was running through the minds of the lawyers at the RIAA and
MPAA? Or at Intellectual Ventures? Or at the BSA? In particular, when they read
the part of the ruling that said that congress has the authority to levy a tax
for failing to purchase a product.

I'm guessing their response could best be described as trollgasm.

[ Reply to This | # ]

Explaining the Legalese of the US Supreme Court's Ruling on the Affordable Care Act ~ pj
Authored by: Anonymous on Sunday, July 01 2012 @ 12:02 PM EDT
I am grateful that PJ explained the current opinion in it fullness and with a
knowledge base that I can not hope to match but I horrified that the most
obvious second part of this horror show is completely missing from analysis.

There were two sections that the AHCA could fall under.

If AHCA is view as imposing a fee on health care it fall under the commerce
clause, was the subject of this suit, was declared unconstitutional, and fully
explained by PJ to a dept I could never master.

If AHCA is viewed as a tax it falls under the tax provision of the constitution
was not the subject of this court action, was not debated, no opinion was
written, and was not explained by PJ as no legal action has occurred.

With much dancing back and forth Roberts voted with the unconstitutional group
that under the commerce clause the act is unconstitutional but then he switches
gears and declares that since the act can be viewed as a tax it is
constitutional.

Why is it constitutional as a tax? Because that issue was not before the court
and by default if the issue is not before the court it is assumed in the most
positive light thus the act is assumed to be constitutional.

What has not been adjudicate is the constitutional of the act as tax. Nothing
in the opinion or PJ explanation of the opinion covers the issue of is this act
constitutional as a tax. It is assumed to be constitutional only because that
issue was not judicature.

From this point on we have to speculate as we switch from history, yesterday, to
the future, tomorrow.

There are a number of individuals, groups, and state governments that are
opposed to AHCA.

From this one may make a fairly safe assumption that the issue of the
constitutionality of AHCA will be adjudicates as fast as one or more of these
groups can file the suit.

With a number of suits filed in a number of different jurisdictions it is
assured that there will be conflicts rendering a variety of opinions, which
based on Roberts open invitation by finding AHCA only constitutional because the
tax issue was not before the court, that that issue will go before the Supreme
Court.

The tax issue. Again not being a lawyer a much better explanation will come from
some major legal players and filtered through PJ for us to understand. But much
lesser light can speculate a little.

There is a poll tax amendment, the 24, which outlaws states collection a poll
tax for voting.

Can a state collect a poll tax for purposes of health care?

Can the federal government collect a poll tax for any reason? for health care?
for not eating broccoli? for eating at McDonalds?

Not only that there are other federal/state tax issues that will only become
apparent when attorneys versed in state/federal tax issues become involved.

From this we can conclude a stake was driven through one of the harts of the
hydro headed monster called world totalitarianism and slavery of the individual
to the whims of the masses with one more stake (known) to go.

[ Reply to This | # ]

Roberts was wrong, wrong, wrong
Authored by: Anonymous on Sunday, July 01 2012 @ 01:17 PM EDT
There is very much a difference between giving a tax credit for certain economic
behaviors (buying a house, putting in solar energy based heat/ac/other,
purchasing environmentally friendly vehicles, etc) and taxing the lack of those
behaviors. For example there is an elderly/disabled tax credit which is very
much different than having an additional tax because one is young and
able-bodied. Please forgive the following example because I am not a bigot but
medical facts are medical facts...
Would this court have upheld a "gay tax" i.e. a tax on homosexual
males because they have higher incidents of aids and therefore put more cost on
the health care system? (this is truly a non-issue to me and the stats may be
outdated, but it was originally called "grid" for a reason). People
who do not buy health insurance are just as much a minority as any other
minority. The fact that they are one by "choice" (given my 21 yr old
son and 19 yr old daughter's income it really isn't a choice for either). But
for sake of argument we will call it a choice. In short, motivating via the tax
system has usually involved affirmative acts (buying something, owning
something, etc) not because someone has chosen not to do something.

I understand the goals and applaud them, just like I applaud the goal of having
more security. I am not willing to trade freedom for either goal however.
Congress's language in this case is very clear, this is a penalty (punishment)
of an economic nature for not behaving as they would have you behave. In this
particular case they are punishing you for not buying health insurance. Next a
tax on not eating vegetables? And then next a tax on everyone who does not have
a gym membership? Where on this slope do we say enough is enough?
By achieving a desired outcome has not the supreme court done more damage to
personal freedom in this one case than ever before? Simply mislabeling a
penalty as an incentive should not have this result.

[ Reply to This | # ]

Penalty higher than buying insurance.
Authored by: Anonymous on Sunday, July 01 2012 @ 02:38 PM EDT
"Just pay the penalty, which is always going to be no more than the cost of
the insurance you forego.".

Really?

At my last temp job, I believe I was paying around $100 a month for a
"mini" health care plan (that I believe does not even meet the mandate
requirements) totaling $1200 a year. I was making about 30k/year.

It would cost a lot more than that since I am unemployed and do not have access
to employer funded healthcare.

[ Reply to This | # ]

Social Security is not the same thing
Authored by: Anonymous on Sunday, July 01 2012 @ 04:21 PM EDT
> But Congress has never attempted to rely on that power to
compel individuals not engaged in commerce to purchase an
unwanted product.

>> I don't think that's actually factual, in that when my
mom went on Social Security, she had to get medical coverage
and she had to pay for the coverage the government didn't
take care of. It was not a option.

I am not sure that is a good example. Your mom was not
forced to buy insurance. She could pay out of pocket. So
your mom was not forced to buy something she not want. Your
mom did have an option.

[ Reply to This | # ]

buy it just before going tonthe doctor
Authored by: tz on Sunday, July 01 2012 @ 06:34 PM EDT
The 'tax' is monthly, about $50. So if you feel a pain, log-in and buy one
month from the high risk pool, then dial 911. If it was nothing, cancel and go

back to the tax next month.

Even congress id limited by the constitution - supposedly. I don't see the
16th amendment applying, nor does it seem to be apportioned.

[ Reply to This | # ]

Thank you
Authored by: Anonymous on Sunday, July 01 2012 @ 10:35 PM EDT
Thanks for a neutral, balanced analysis.

Personally, I don't like ACA, but I appreciate a fair analysis.

[ Reply to This | # ]

The Becker-Posner Blog is down - so here are there comments
Authored by: Anonymous on Monday, July 02 2012 @ 04:09 AM EDT
07/01/2012

The Health Care Mandate: If it seems Like a Tax it is a Tax —— Becker

In the past I supported a health care mandate that would require everyone to
have minimal insurance against catastrophic health events, such as cancers, that
are very expensive to treat. Catastrophic insurance alone is pretty cheap since
they are rare for younger persons, the main ones not covered either by private
insurance, Medicare or Medicaid. Since the great majority of individuals and
families could afford to pay for such catastrophic coverage, only the real poor
need have this coverage subsidized by the federal government.

The argument I gave in support of such a mandate is that individuals without
insurance who develop a catastrophic medical condition would impose significant
burdens on those with insurance by raising the cost of insurance to everyone.
But research (see the Urban Institute’s report in 2008 by Hadley, Holahan,
Coughlin, and Miller, “Covering the Uninsured in 2008: Current Costs, Sources of
Payment, and Incremental Costs”) convinced me that while in principle this is a
concern, the medical care provided to the many uninsured in America has had only
a small effect on the cost of private health insurance.These authors find that
private insurance premiums were raised by no more than 1.7% because of the
shifting of the costs of the uninsured to private insurers. Partly for this
reason I have changed my position on the health care mandate, and no longer
believe it is worth the cost of getting the government involved in mandating
health insurance for everyone.

The form the health care mandate takes in the Affordable Care Act also
influenced my change in position on these mandates. This Act does not simply
mandate catastrophic insurance coverage, but mandates a far more extensive
coverage that can hardly be justified by the need to protect individuals against
the cost of serious illnesses. Moreover, instead of just subsidizing the poor,
this Act also subsidizes individuals and families with incomes that are several
times above the poverty line. As frequently happens in the political
implementation of possibly good policies, the actual mandate and many other
programs under this Act are likely to do more harm than good.

I am not a lawyer, and cannot judge the constitutionality of the mandate or
other aspects of the Affordable Care Act. Of course, many programs are perfectly
constitutional even if they do a great deal of damage. Without directly
discussing the constitutionality of the mandate I can discuss whether combining
the health care mandate with a penalty for those who do not participate can
legitimately be called a tax, as argued by Justice Roberts in the majority
opinion.

Clearly, the concept of a tax includes compulsory contributions to government
revenues, such as levies on personal incomes, earnings (such as social
security), or corporate profits. However, certain levies that are called taxes
contribute to government revenues, but their main purpose may be to affect
certain types of behavior and activities. Examples include taxes on cigarettes
that aim to discourage smoking, or taxes on carbon emissions (Pigovian taxes)
levied to reduce the greenhouse gases that enter the atmosphere.

Other levies that change behavior are not usually called taxes, although they
have the same kind of impact on behavior as taxes. For example, drivers that are
caught exceeding the speed limit are “fined”, although one could equally well
say they are “taxed” for exceeding speed limits. The main purpose of these fines
may be to encourage drivers to obey speed limits, although the revenue from the
fines may also be part of the purpose, as in “speed traps”. Following the same
logic, one can then say that consumers who buy cigarettes are in effect fined
for each cigarette they buy, where the “fine” is the size of the government levy
imposed on each cigarette consumed.

Consider in this context the health care mandate, which involves a financial
penalty for persons who do not buy the mandated health care insurance. Without
any stretch in language, one can say they would be “fined” for not obeying the
mandate. But then following the logic of the cigarette tax and speedy driving
examples, one could also legitimately say that individuals would be “taxed” if
they do not buy the mandated health package.

The Affordable Care Act has many very bad features, including the health care
mandate. But if the constitutionality of this Act depends on whether the
financial penalty for not buying the mandated health care package is a “tax”, I
go with Justice Roberts, and against the dissenting opinion by Justices Scalia,
Kennedy, Thomas, and Alito, in concluding that this penalty can indeed be
considered a “tax”.

Posted at 09:41 PM

-----

Is the Health Care Law’s “Mandate” Really a Tax? —— Posner

I agree with Becker (and with the Supreme Court) that the “mandate” in the
health care law—the requirement that people who can afford to buy health
insurance must do so on pain of having to pay a “penalty” if they do not—is
within Congress’s taxing power under Article I of the U.S. Constitution, the
article establishing the legislative branch of the federal government. Article I
among other things authorizes Congress "to lay and collect taxes, duties,
imposts and excises." The fact that Congress called the mandate exaction a
penalty rather than a tax is of no significance. It was done simply because
“tax” has become a dirty word in American political discourse.

It is true that the main reason for taxes is to generate revenue for the
government, and the mandate exaction is not a revenue tax but a regulatory tax.
But regulatory taxes—a tax on emission of pollutants, for example—are common;
their aim is not to generate revenue but to discourage undesirable practices,
though they generate some revenue because some of the taxpayers find the tax
less onerous that discontinuing the taxed activity. The “duties, imposts, and
excises” to which Article I refers would include tariffs, which are often
intended to discourage imports rather than to raise revenue. It is true that
from an economic standpoint a regulatory tax may not seem sharply different from
a fine (for illegal parking, for example), which is not a tax within the meaning
of Article I (if it were, Congress would have virtually unlimited regulatory
power, rather than just the enumerated powers set forth in Article I). But there
is a significant difference. Fines are imposed on activities that are forbidden,
rather than merely sought to be discouraged or reduced. Even when the fine is
light, as in the case of most parking tickets, repeated violations will result
eventually in severe sanctions, so the violator really doesn’t have an option to
pay rather than comply. Fees for specific services, such as for a passport or a
driver’s license, are also distinguishable from regulatory taxes, because fees
are in exchange for specific government services, whereas taxes are not usually
paid in exchange for specific services.

So the mandate exaction, though called a penalty, is in fact a regulatory tax
and therefore within Congress’s power. Whether it’s set at a rate that will
actually induce many people who currently lack health insurance to buy health
insurance is a separate question, and still a third question is whether if so
the result of adding to the number of Americans who have health insurance will
be good for society as a whole. The idea behind the mandate that the tax is
designed to enforce is that the uninsured are free riders. They tend to be young
and therefore on average in good health, and by opting out of the insurance pool
they increase the cost of insurance to the people who remain in the pool. In
addition, when they do get sick, they tend to visit hospital emergency rooms for
diagnosis and treatment, and emergency rooms tend to be very expensive. The
hospitals send the uninsured whom they treat stiff bills, but often the bills
are not paid.

If the mandate succeeds in inducing many uninsured to buy health insurance, this
should reduce the health insurance premiums paid (either directly or in the form
of lower wages because their employer is paying the premiums) by those who
already have health insurance. But this will just be a transfer of wealth from
one group of people to another. More important from an overall economic
standpoint, a reduction in the number of uninsured will increase aggregate
health costs because uninsured people demand and receive less health care, on
average, than the insured. The study by Hadley and coauthors that Becker cites
estimates that providing health insurance (whether private or, in the form of
Medicaid or Medicare, public) to all the currently uninsured would increase
total health care expenditures in the United States by 5.1 percent a year, a
substantial increase (given the size of the health care industry) equivalent to
0.8 percent of GDP. (Their study was conducted four years ago; I don’t know what
the current best estimate would be.)

It cannot be assumed that the cost increase would be offset by a reduction in
medical expenses attributable to the better health that people who by virtue of
having health insurance can expect to have because they don’t skimp on medical
screening and treatment. Better health care will increase longevity, but that
means more old people, who consume a disproportionate amount of medical care as
it is.

Posted at 06:30 PM

-----

http://webcache.googleusercontent.com/search?q=cache:0aH4gIFTbp8J:www.becker-pos
ner-blog.com

[ Reply to This | # ]

The Becker-Posner Blog is down - so here are there comments
Authored by: Anonymous on Monday, July 02 2012 @ 04:10 AM EDT
07/01/2012

The Health Care Mandate: If it seems Like a Tax it is a Tax —— Becker

In the past I supported a health care mandate that would require everyone to
have minimal insurance against catastrophic health events, such as cancers, that
are very expensive to treat. Catastrophic insurance alone is pretty cheap since
they are rare for younger persons, the main ones not covered either by private
insurance, Medicare or Medicaid. Since the great majority of individuals and
families could afford to pay for such catastrophic coverage, only the real poor
need have this coverage subsidized by the federal government.

The argument I gave in support of such a mandate is that individuals without
insurance who develop a catastrophic medical condition would impose significant
burdens on those with insurance by raising the cost of insurance to everyone.
But research (see the Urban Institute’s report in 2008 by Hadley, Holahan,
Coughlin, and Miller, “Covering the Uninsured in 2008: Current Costs, Sources of
Payment, and Incremental Costs”) convinced me that while in principle this is a
concern, the medical care provided to the many uninsured in America has had only
a small effect on the cost of private health insurance.These authors find that
private insurance premiums were raised by no more than 1.7% because of the
shifting of the costs of the uninsured to private insurers. Partly for this
reason I have changed my position on the health care mandate, and no longer
believe it is worth the cost of getting the government involved in mandating
health insurance for everyone.

The form the health care mandate takes in the Affordable Care Act also
influenced my change in position on these mandates. This Act does not simply
mandate catastrophic insurance coverage, but mandates a far more extensive
coverage that can hardly be justified by the need to protect individuals against
the cost of serious illnesses. Moreover, instead of just subsidizing the poor,
this Act also subsidizes individuals and families with incomes that are several
times above the poverty line. As frequently happens in the political
implementation of possibly good policies, the actual mandate and many other
programs under this Act are likely to do more harm than good.

I am not a lawyer, and cannot judge the constitutionality of the mandate or
other aspects of the Affordable Care Act. Of course, many programs are perfectly
constitutional even if they do a great deal of damage. Without directly
discussing the constitutionality of the mandate I can discuss whether combining
the health care mandate with a penalty for those who do not participate can
legitimately be called a tax, as argued by Justice Roberts in the majority
opinion.

Clearly, the concept of a tax includes compulsory contributions to government
revenues, such as levies on personal incomes, earnings (such as social
security), or corporate profits. However, certain levies that are called taxes
contribute to government revenues, but their main purpose may be to affect
certain types of behavior and activities. Examples include taxes on cigarettes
that aim to discourage smoking, or taxes on carbon emissions (Pigovian taxes)
levied to reduce the greenhouse gases that enter the atmosphere.

Other levies that change behavior are not usually called taxes, although they
have the same kind of impact on behavior as taxes. For example, drivers that are
caught exceeding the speed limit are “fined”, although one could equally well
say they are “taxed” for exceeding speed limits. The main purpose of these fines
may be to encourage drivers to obey speed limits, although the revenue from the
fines may also be part of the purpose, as in “speed traps”. Following the same
logic, one can then say that consumers who buy cigarettes are in effect fined
for each cigarette they buy, where the “fine” is the size of the government levy
imposed on each cigarette consumed.

Consider in this context the health care mandate, which involves a financial
penalty for persons who do not buy the mandated health care insurance. Without
any stretch in language, one can say they would be “fined” for not obeying the
mandate. But then following the logic of the cigarette tax and speedy driving
examples, one could also legitimately say that individuals would be “taxed” if
they do not buy the mandated health package.

The Affordable Care Act has many very bad features, including the health care
mandate. But if the constitutionality of this Act depends on whether the
financial penalty for not buying the mandated health care package is a “tax”, I
go with Justice Roberts, and against the dissenting opinion by Justices Scalia,
Kennedy, Thomas, and Alito, in concluding that this penalty can indeed be
considered a “tax”.

Posted at 09:41 PM

-----

Is the Health Care Law’s “Mandate” Really a Tax? —— Posner

I agree with Becker (and with the Supreme Court) that the “mandate” in the
health care law—the requirement that people who can afford to buy health
insurance must do so on pain of having to pay a “penalty” if they do not—is
within Congress’s taxing power under Article I of the U.S. Constitution, the
article establishing the legislative branch of the federal government. Article I
among other things authorizes Congress "to lay and collect taxes, duties,
imposts and excises." The fact that Congress called the mandate exaction a
penalty rather than a tax is of no significance. It was done simply because
“tax” has become a dirty word in American political discourse.

It is true that the main reason for taxes is to generate revenue for the
government, and the mandate exaction is not a revenue tax but a regulatory tax.
But regulatory taxes—a tax on emission of pollutants, for example—are common;
their aim is not to generate revenue but to discourage undesirable practices,
though they generate some revenue because some of the taxpayers find the tax
less onerous that discontinuing the taxed activity. The “duties, imposts, and
excises” to which Article I refers would include tariffs, which are often
intended to discourage imports rather than to raise revenue. It is true that
from an economic standpoint a regulatory tax may not seem sharply different from
a fine (for illegal parking, for example), which is not a tax within the meaning
of Article I (if it were, Congress would have virtually unlimited regulatory
power, rather than just the enumerated powers set forth in Article I). But there
is a significant difference. Fines are imposed on activities that are forbidden,
rather than merely sought to be discouraged or reduced. Even when the fine is
light, as in the case of most parking tickets, repeated violations will result
eventually in severe sanctions, so the violator really doesn’t have an option to
pay rather than comply. Fees for specific services, such as for a passport or a
driver’s license, are also distinguishable from regulatory taxes, because fees
are in exchange for specific government services, whereas taxes are not usually
paid in exchange for specific services.

So the mandate exaction, though called a penalty, is in fact a regulatory tax
and therefore within Congress’s power. Whether it’s set at a rate that will
actually induce many people who currently lack health insurance to buy health
insurance is a separate question, and still a third question is whether if so
the result of adding to the number of Americans who have health insurance will
be good for society as a whole. The idea behind the mandate that the tax is
designed to enforce is that the uninsured are free riders. They tend to be young
and therefore on average in good health, and by opting out of the insurance pool
they increase the cost of insurance to the people who remain in the pool. In
addition, when they do get sick, they tend to visit hospital emergency rooms for
diagnosis and treatment, and emergency rooms tend to be very expensive. The
hospitals send the uninsured whom they treat stiff bills, but often the bills
are not paid.

If the mandate succeeds in inducing many uninsured to buy health insurance, this
should reduce the health insurance premiums paid (either directly or in the form
of lower wages because their employer is paying the premiums) by those who
already have health insurance. But this will just be a transfer of wealth from
one group of people to another. More important from an overall economic
standpoint, a reduction in the number of uninsured will increase aggregate
health costs because uninsured people demand and receive less health care, on
average, than the insured. The study by Hadley and coauthors that Becker cites
estimates that providing health insurance (whether private or, in the form of
Medicaid or Medicare, public) to all the currently uninsured would increase
total health care expenditures in the United States by 5.1 percent a year, a
substantial increase (given the size of the health care industry) equivalent to
0.8 percent of GDP. (Their study was conducted four years ago; I don’t know what
the current best estimate would be.)

It cannot be assumed that the cost increase would be offset by a reduction in
medical expenses attributable to the better health that people who by virtue of
having health insurance can expect to have because they don’t skimp on medical
screening and treatment. Better health care will increase longevity, but that
means more old people, who consume a disproportionate amount of medical care as
it is.

Posted at 06:30 PM

-----

http://webcache.googleusercontent.com/search?q=cache:0aH4gIFTbp8J:www.becker-pos
ner-blog.com

[ Reply to This | # ]

Explaining the Legalese of the US Supreme Court's Ruling on the Affordable Care Act ~ pj - Updated
Authored by: lanser on Monday, July 02 2012 @ 04:20 AM EDT
As a Briton, and having lived with the NHS all my life, I don't consider myself
socialist, in fact the very much the opposite, I don't consider that I live in a
communist state, I still fail to see any valid rational argument from the US
against a publically funded Health Care system.

[ Reply to This | # ]

Law is not rational
Authored by: Anonymous on Monday, July 02 2012 @ 09:53 AM EDT
This ruling provides a very clear example of the non-rational nature of law (not
making a judgement about whether non-rational law is a good thing or a bad
thing). On a plain reading of the opinion, it starts by asserting that the
affordable care act can be tried by the court at this time because it is not a
tax. The majority then goes on to assert that neither the commerce clause nor
the general welfare clauses provide congress with the power to pass this act,
but then it asserts that it is within congress' power under the taxation clause.
Thus a plain reading of the majority opinion is that the act could be ruled
upon because it is not a tax, but at the same time it is constitutional because
it is a tax. Were law rational, this would be an absurdity, but given the
non-rational nature of law (and carefully nuanced definitions), it becomes an
authoritative statement by the highest court in the land. Another somewhat
classic example of irrationality is the old practice of "riding upon a
black ram" as part of Free Bench ( an example pointed to by Patrick O'Brian
as an illustration of the irrationality not necessarily being a bad thing).
We've seen this inherent irrationality of law on many different occasions here
on Groklaw, and it seems a frequent disconnect from the rational worlds of
programming and engineering.

[ Reply to This | # ]

The problem...
Authored by: TemporalBeing on Monday, July 02 2012 @ 02:04 PM EDT
So that's the problem. Cost shifting.
Except what if Congress got the problem wrong? In this case, I'd say that's exactly what happened. The issue is not cost-shifting, it's the cost itself, and that is largely due to how the insurance companies run and the costs they make the doctor's offices incur. For example, you go to the doctor and see them for 20 minutes. The doctor then files a claim to your insurance company for an amount of say $100 USD - the doctor's time, the nurses, and the admin's; say $40 for the doctor, $30 for the nurse, $20 for the admin, and $10 for profit - all for the visit itself. The insurance company then rejects it. Now the admin has to refile it; and they've now incurred another $20; their cost _was_ only $90, and now it's $110, and they've lost $10 overall. They have a choice - file for $120 next time, or continue to lose $10 on each filing. Except the insurance company rejects it again; they refile it and now they've lost $30 on a cost of $130. Again, they could just raise what they charge, or continue to lose money. The insurance companies do this in hopes that the doctor's office give in and takes the loss; eventually they'll pay something out, but it'll only be a fraction of what was charged. As a result, most submitting charges to the insurance companies pad the charges so in the end they'll be able to cover their expenses - so the doctor's office in my example that originally charged $100, may charge $300 just to get the $90 they need to break even, and everyone sees a 300% increase in the cost of health care.

At no point has there been any cost shifting, other then the individual (who is in effect paying $12k a year for the insurance) requesting the insurance to pay it minus their deductible.

This is the real problem - insurance companies not paying what they should. Congress should eliminate their ability to reject claims, and that would reduce health care costs by magnitudes alone.

And, by the way, one doctor was in the news for refusing to take any insurance. He cut his costs by 60% as a result namely because he didn't need to deal with the appeals process that all the insurance companies made him go through previously.
Judges are cloistered from the problems of those without a lot of money, I guess, so they may not realize that young people don't buy insurance not because they'd rather get an iPad, but because even if they do nothing fun ever, they still don't have enough money to buy insurance. Think of all the young people coming out of college who can't find a job currently. What would they pay insurance premiums with?
I must say, living in the Washington D.C metro-area after I graduated I certainly fell into that. I didn't contribute to 401k/IRAs or use my employer's health benefits immediately because if I did, I wouldn't have been able to pay my bills so it was rather simple. After I moved out of the Washington D.C. metro-area that changed.
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. Upholding the individual mandate under the Taxing Clause thus does not recognize any new federal power. It determines that Congress has used an existing one.
The examples given however, discount the price for participating in the economic activity, not for non-participation. So I would say that is it a new power not an existing one, and disagree with the majority.

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Explaining the Legalese of the US Supreme Court's Ruling on the Affordable Care Act ~ pj - Updated
Authored by: Anonymous on Monday, July 02 2012 @ 04:28 PM EDT
Even PJ has succumbed to the ... notion that if you're not insured, you're
freeloading.

To which I call (can't say it here). That's totally and ignorantly wrong. I
have never had insurance when I "needed" it, yet never failed to pay
the bills either.
Including some major expensive traumas - I found a way to pay.

I'm pretty healthy, and control my own medical costs by staying that way, which
takes effort. Yet now I'm going to have to pay for those
"non-freeloaders" who eat twinkies all day and become diabetic? How
is that fair? And how is that not "freeloading" on me, assuming I
don't find a way to avoid this system?

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People affected by the individual mandate
Authored by: Anonymous on Monday, July 02 2012 @ 04:33 PM EDT
I believe you're wrong (and Chief Justice Roberts is right) about who the
mandate is likely to affect. The young people you've talked to who can't afford
insurance are, obviously, not making a lot of money, and therefore qualify for
subsidized insurance, unless they're dependants, in which case their parents
insurance covers them.

I was one of the young people the mandate would have affected at one point: I
was making plenty of money as a contractor, and could have afforded individual
health insurance if I'd been offered it. But I'd left a job that had a health
plan, COBRA ran out, and I just didn't deal with figuring out how to get my own
insurance at the time. For that matter, I knew I that if I broke my arm or
something on that scale, I could afford to pay for it out-of-pocket; it would
have taken something catastrophic and unlikely to be too expensive. In general,
people who want health insurance but can't afford it should be able to actually
get health insurance under this law, which should leave the mandate hitting
primarily people who don't care about health insurance, who are largely not very
worried about money. Of course, if the law doesn't work right, there would be a
lot of young people who not only can't afford the insurance they want but also
have to pay a penalty for not having it, but that's not the intention of the
law, and if that group turned out to be the largest group affected by the
individual mandate, I think Congress would change stuff pretty quickly.

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The Big Picture...
Authored by: Anonymous on Tuesday, July 03 2012 @ 10:12 AM EDT
That was a very interesting summary.

The statement was made that, “in the legal field you have to think about all the
issues from both sides”. I believe that, in the legal field, it is also
appropriate to consider the impact of any fundamental principles established by
a decision in a larger context.

That said; this decision is not really about health insurance...

The decision basically holds that it is not constitutional for the government to
force you to buy a particular product but that it is constitutional for the
government to tax you for not buying the product which the government cannot
constitutionally order you to buy. I believe that logic used to reach this
decision is seriously flawed.

Beyond the context of health care, the larger concern is a government armed with
the ability to tax its citizens for not buying products simply because the
government thinks that the purchase would be a good idea.

Energy conservation, like healthcare, is an area of national concern. The
government could now constitutionally mandate that everyone purchase an electric
car or pay a tax. Obesity is “epidemic” so the government could mandate that
everyone drink diet soda or pay a tax. Simply avoiding any purchase that the
government deems worthy could now be constitutionally taxed using this twisted
logic.

A Pandora’s Box has just been opened...

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cost shifting - and saving too
Authored by: Anonymous on Tuesday, July 03 2012 @ 12:21 PM EDT
The cost shifting argument above fails to state one issue that actually makes it
much stronger.

People who can't afford insurance also can't afford to see a doctor unless they
are clearly and seriously ill.

But if you are able to see a doctor regularly, you can discuss "minor
irritation" symptoms *before* they turn into a clear urgent medical
problem. In most cases, dealing with a medical problem early reduces the cost
of treating by a huge amount - when you wait until it is urgent, there are lots
of side-effect issues to also deal with.

A health system can afford to pay for a lot of non-urgent consultations when
even just a few of them prevent health problems from becoming escalating to a
point where there are extremely expensive to deal with.

John Macdonald

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The ruling striking down penalties to states for Medicaid expansion....
Authored by: Anonymous on Thursday, July 05 2012 @ 01:02 PM EDT
...is the one which seems completely out there and unjustifiable, in my
not-so-humble opinion. I'd like to see an analysis of that atrocity. It
purports to prohibit Congress from doing something which is precisely within its
enumerated powers (making appropriations with conditions on them).

And it seems to me to be completely unenforceable, as any attempt to enforce it
would be an attempt to force Congress to appropriate money, which nobody can
force Congress to do, according to long-standing precedent.

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