The twisted logic used to declare the Affordable Care Act (aka ObamaCare or ACA) constitutional more closely resembled a ruling from the Soprano Court than the U.S. Supreme Court.
Congress cannot compel citizens to engage in commerce but now they can use their taxing power to punish those who don’t comply.
Tony and Uncle Junior would be pleased.
Congress went to great lengths to say that those who do not purchase health care insurance will pay a penalty, not a tax. The ability to regulate interstate commerce (the Commerce Clause), not the power to tax, was cited as justification for ACA.
So when five justices found that mandating the purchase of insurance under the Commerce Clause is not permitted, ACA should have been found unconstitutional. Instead, Justice Roberts found a bizarre way to uphold the law by saying Congress really meant to force compliance by using its power to tax. First, he determined it was indeed a penalty and not a tax. The Tax Anti-Injunction Act stipulates that the courts cannot entertain a suit to enjoin or uphold a tax until the tax is actually paid. Accordingly, if violating the mandate results in a tax, the case should have been dismissed as being “not ripe” (not that it should have gotten this far in the first place).
Then he reversed field and said because the penalty is less than the cost of compliance, it’s really a tax! On this, the dissenting justices wrote, “…we have never held-never-that a penalty imposed for violation of the law was so trivial as to be in effect a tax. We have never held that any exaction imposed for violation of the law is an exercise of Congress’ taxing power….”
It’s good that the Court drew a bright line on the use of the Commerce Clause, but the upshot is that Congress is now free to write “Obey or Pay” laws. Don’t want to buy an electric car? That’s OK; just pay the IRS $5,000.
State legislatures must now decide whether to implement health care exchanges and expand Medicaid eligibility. That’s right – it’s voluntary. The Court also ruled that the federal government cannot coerce states to ‘voluntarily’ implement ACA by threatening to withhold all Medicaid payments. That precedent should also give states more freedom to opt out of Common Core Standards and other ‘voluntary’ programs.
The stakes are enormous. A KPI study published last year found that the ACA will cost Kansas $4.7 billion in its first ten years. Medicaid currently consumes 18% of General Fund revenues; by 2023, that will rise to 31%. Legislators would either be forced to raise taxes, dramatically reduce spending or some combination of the two. That would wreak havoc on the economy and cost thousands of jobs.
We definitely need reform but state law restricts access by making health care more expensive. Kansans should be allowed to purchase insurance from anywhere in the country, not just from a Kansas company. Group participation restrictions should be eliminated. Coverage mandates should be lifted so Kansans can purchase the amount of coverage they want. Individuals should be treated the same as employers and allowed to purchase insurance with after-tax dollars; current law makes most of us captive to the coverage our employers choose.
Now that the ACA is officially a crushing tax on the middle class, maybe citizens will give legislators an offer they can’t refuse – overturn ACA and enact consumer-driven reforms or go home.
Dave Trabert is President of Kansas Policy Institute.
ACA should have been called unconstitutional