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Social Security is not the same thing | 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

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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.

[ Reply to This | # ]

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