Editore"s Note
Tilting at Windmills

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February 1, 2011

VINSON'S MOST STRIKING ERROR.... In his ruling on the Affordable Care Act yesterday, Judge Roger Vinson made a variety of errors in fact and judgment, but there's one point in particular that deserves a closer look. From the ruling:

"... the mere status of being without health insurance, in and of itself, has absolutely no impact whatsoever on interstate commerce (not 'slight,' 'trivial,' or 'indirect,' but no impact whatsoever) -- at least not any more so than the status of being without any particular good or service. If impact on interstate commerce were to be expressed and calculated mathematically, the status of being uninsured would necessarily be represented by zero. Of course, any other figure multiplied by zero is also zero. Consequently, the impact must be zero, and of no effect on interstate commerce."

This comes up quite a bit among opponents of the law on the right. The government has the power to regulate interstate commercial activity, including health insurance, but those who choose not to buy coverage aren't engaging in an activity, and therefore fall outside the law's reach.

It's important to appreciate how mistaken Vinson is here.

The argument from the Obama administration is straightforward: the Commerce Clause empowers the federal government to regulate interstate commerce; the American health care system is interstate commerce; and the Affordable Care Act regulates the health care system. As such, the ACA fits comfortably within the confines of the Commerce Clause.

Yes, there may be folks who don't want to buy insurance, who would be penalized under the law. But under our system, those folks still get sick, still go to the hospital with medical emergencies, and -- here's the kicker -- still get care. As you may have noticed, for quite a while, it's been one of the right's favorite arguments: the uninsured can always just go the emergency room and receive treatment, whether they have insurance or not.

Of course, when the uninsured get this care, and can't pay for it, the costs are passed on to the rest of us -- it makes the entire system more expensive, with hospitals and medical professionals providing care without compensation from the patient. As a consequence, those who would choose not to get coverage have a significant impact on the larger health care system, which is precisely why the notion of a mandate enjoyed broad, bipartisan support up until late 2009. There was never any doubt as to its constitutionality; this was a no-brainer.

Indeed, the Constitution empowers the government to make laws that "shall be necessary and proper" to "regulate commerce among the several States." ACA proponents say the mandate is necessary and proper to effectively regulate the marketplace; Vinson says the necessary and proper clause of the Constitution doesn't really count.

To put it mildly, the judge and those heralding the ruling aren't exactly making a persuasive case.

Steve Benen 8:00 AM Permalink | Trackbacks | Comments (49)

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Comments

It is not about the Constitution.

It is about Corporation V. People.

Posted by: DAY on February 1, 2011 at 8:09 AM | PERMALINK

We republicans do not give a damn whether the judge's ruling is persuasive, ignorant, or just plain wrong. It is still a defeat for ObamaCare and defeating Obama is the most important thing.

This judge's ruling helps move it all along to our Supreme Court. The interesting part will be when the Supremes hold hearings and make a ruling. Just as the Koch brothers had Scalia, Thomas, and our Supreme Court overturn a century worth of precedence in Citizens United Not Timid vs. FEC, will they have Scalia and Thomas overturn the Commerce clause? An open question to be determined by what will most greatly increase the Koch brothers wealth!

Posted by: RepublicanPointOfView on February 1, 2011 at 8:09 AM | PERMALINK

Look, in all fairness, since he was determined to kill this, he had to find SOMETHING.

I still think that when the corporations make it clear to even the most activist Conservative judge that this mandate means billions, eventually trillions of dollars, that even they will get it.

In the meantime, how ironic is it that it was the Republican idea that the Democrats put in hoping to appease a few of them into voting for it, that was found unconstitutional - by a Republican judge?

Posted by: c u n d gulag on February 1, 2011 at 8:10 AM | PERMALINK

Damn, that judge is stupid.

Posted by: low-tech cyclist on February 1, 2011 at 8:18 AM | PERMALINK

Since my participation in Medicare isn't mandatory, isn't the taxation portion unconstitutional as well--thus making Medicare and Medicaid and Social Security unconstitutional? And since I don't drive in Vermont, why do I pay for their roads? And why can't I ride in a stealth bomber, even though I paid for it?

Answers from pretty much anyone who isn't Judge Vinson would be most welcome. But anyone who would honestly answer the questions probably shouldn't waste the time.

Posted by: jon on February 1, 2011 at 8:19 AM | PERMALINK

'the costs of emergency room care are passed on to the rest of us'

is completely irrelevant. So what? The costs of everything are passed on to the rest of us. The cost of not everyone buying bananas are passed on to the avid banana consumer because if more people bought them banana planting would expand and economies of scale and competition would bring the price down so why not mandate everyone buy bananas?

The costs of highways are passed on to the rest of us even those who are bedridden and never use them.

The whole question of the personal mandate is a step removed from the problem and fails, as if intentionally, by allowing the idea that healthcare is a commodity.

Only if you think it's a commodity can it be regulated this way.

But there's a distinction between bananas and highways. A banana is just one thing, a highway helps everyone in all they do. No one questions that highways a public good.

I would say healthcare is a public good because your healthcare helps you in all you do, like highways. You don't have to use the highways, but you pay for them nonetheless, and they're not a commodity, and neither is healthcare.

Healthcare is a human right and preserving a commercial system that traffics in your human rights is

--oh, I don't know, what would I call it?

Posted by: cld on February 1, 2011 at 8:26 AM | PERMALINK

A Republican idea, originally proposed by the Heritage Foundation, was placed into the ACA and, now, a Republican appointed jurist has found it to be unconstitutional. Wonder what would have happened had we produced a Progressive ACA, instead?

Posted by: berttheclock on February 1, 2011 at 8:31 AM | PERMALINK

That's all true, and all a waste of pixels. We know what to expect from the Bush Family retainers on the SCOTUS who decided Bush v. Gore. We know what Antonin "quack quack" Scalia thinks about personal ethics, after he spent a weekend duck-hunting and hitching a ride in AF II with Cheney while Cheney was party to a litigation before the court. Unless someone on that court gets offered a big-bucks job at a private firm, and soon, we can probably kiss the ACA goodbye, and plan on the bankruptcy to which the previous system was leading us.

Posted by: T-Rex on February 1, 2011 at 8:31 AM | PERMALINK

Well , my old pop used to say "Banana Oil" when he suspected a weak contribution .
"Banana's are just one thing"
"Banana Oil"
and I am just getting warmed up .

Posted by: FRP on February 1, 2011 at 8:33 AM | PERMALINK

In a nutshell: Health ins companies want to pay dr's as little as possible and charge customers as much as possible while providing the minimum health care possible. This adversarial relationship hurts everyone but health co execs and the Republicans who support them. When the Republicans scream death panels, socialism or try to scare you with horror stories of malfeasance in government run health care systems, they are only protecting the Health Care Execs excessive profits, Hermes handbags, and overpriced sports cars.

It has nothing to do anything else. Vinton is a minor tool in this war, obviously obeying his corporate masters.

"There, could I have put it more plainly and fairly?"

Posted by: KurtRex1453 on February 1, 2011 at 8:34 AM | PERMALINK

"Healthcare is a human right and preserving a commercial system that traffics in your human right is ... . . the beard that lays over the human right of health care, and provides for systemic failure while profits continue to be made! -Kevo

Posted by: kevo on February 1, 2011 at 8:35 AM | PERMALINK

I am afraid the ruminations of T-Rex have haunted my thoughts in much the same way . Judicial activism is alive and well established now .

Posted by: FRP on February 1, 2011 at 8:36 AM | PERMALINK

To put it mildly, the judge and those heralding the ruling aren't exactly making a persuasive case.

So what? His job is to scare people not enlighten them. Fear, the great motivator. The Villagers need this type of fear to keep them voting against their own best self interests. Nauseating...

Posted by: stevio on February 1, 2011 at 8:37 AM | PERMALINK

What I was trying to say there is a personal mandate can only work if you characterize healthcare as a commodity and characterizing it as a commodity invites failure because a) you can't arbitrarily foist a commodity on someone because that's giving an absurd privilege to some other party, and, more importantly, b) it's not a commodity in the first place, it's a human right and treating that as a commodity is outright evil.

Posted by: cld on February 1, 2011 at 8:46 AM | PERMALINK

Ah, judicial activism. Such a lovely thought. Just reach a conclusion first, then, have your law clerks frantically search for any rule of law which might support that conclusion. Gore v. Bush, ring a bell, anyone?

Yes, indeed, Republican appointed jurists have perfected this art.

Posted by: berttheclock on February 1, 2011 at 9:06 AM | PERMALINK

However, if I am a perfectly healthy person and by the grace of luck (or a higher power) never have to enter a hospital during my life time, someone tell what interstate commerce "activity" have I engaged myself in?

I just think the Administration dug itself a pickle. If they just called it a "tax" (like they tried to argue in Court proceedings, then this question would be mute.

Posted by: Concerned on February 1, 2011 at 9:11 AM | PERMALINK

2 federal judges have now upheld the law and 2 federal judges have not. Which two get the most news coverage?

federal district court Vinson's authority is no greater than federal district court Judge Steeh or federal district court Judge Moon.

Posted by: anon on February 1, 2011 at 9:11 AM | PERMALINK

This ruling gives sophistry a bad name.

Posted by: Howlin Wolfe on February 1, 2011 at 9:15 AM | PERMALINK

Froma WSJ OpEd: "He notes that no one can opt out of eating any more than they can from the medical system, so return to the Wickard example of wheat: “Congress could more directly raise too-low wheat prices merely by increasing demand through mandating that every adult purchase and consume wheat bread daily, rationalized on the grounds that because everyone must participate in the market for food, non-consumers of wheat bread adversely affect prices in the wheat market.”

So, some one please explain to me if the interstate commerce clause covers the medical mandate, why can't this then be stretched to mandating people buy vitamins, or buy electric cars, or eat more vegetables, or buy their electricty from nukes... by not engaging in all of those activities, it couldhave an indirect cost to the rest of society.

Posted by: Concerned on February 1, 2011 at 9:32 AM | PERMALINK

@ Concerned, how is that different from saying that because I don't buy parsnips and never will, parsnip-buying must not be interstate commerce? IANAL but I don't think "interstate commerce" has this implicit notion that every individual person has to participate. If it did, nothing would qualify, because there's always some nonzero number of people who don't partake in a particular kind of commerce.

Posted by: FlipYrWhig on February 1, 2011 at 9:36 AM | PERMALINK

Your explanation does not prove the constitutionality of the mandate. It does provide a strong rational for providing a low cost option for health care to those without it or providing health care to all.

Those are two different things.

Posted by: justmy2 on February 1, 2011 at 9:40 AM | PERMALINK

Look, in all fairness, since he was determined to kill this, he had to find SOMETHING.
Posted by: c u n d gulag

Something, indeed. And I don't think that "something" is an accident. The mandate without a public option was one of the most contentious parts of ACA for the left, and therefore makes an obvious scab for the right to pick at. The right secretly LOVES that for-profit health insurers are now the bedrock of our national healthcare system. This is all just smoke and mirrors to rile up descent and negative auras in the hope of turning off casual voters (and motivating the hardcore base) come 2012.

Posted by: Oh my on February 1, 2011 at 9:48 AM | PERMALINK

Similar to as I said upblog: I've seen the argument (including IIRC in WaMo comments) that the "mandate" in ACA isn't really like a law forcing one to do something. Instead of a statutory penalty for failure to purchase something, you are in effect (at least) denied a tax break, or it could be argued you are taxed for not doing the required act. (To what extent, true?) Since there aren't specific Constitutional provisions against taxation preference based on personal actions (and have been such tax features for decades), it's hard to call the so-called "mandate" the equivalent of the fine for not buying auto insurance (and maybe that isn't either, most places?) Maybe we need some clarification over what is a "fine" and what is effectively a tax on doing or not doing X.

Another point: I'm not so sure we even have to invoke interstate commerce. If we take COTUS Section 8 - to levy taxes for defense and the general welfare - and take heed of the final clause about Congress being able to pass legislation enabling that end, then to the extent that ACA can be considered "taxation" it is taxing for GW and not a specific enumerated regulatory power. Furthermore, from Amendment 9 we are told of "unenumerated rights" - which since not enumerated are subject to our later "discovery". If we claim that access to health care is a proper UR, then it seems credible that Congress can do what is needed (within limitations defined by the forbidden) to enable satisfaction of that right.

In any case Judge Roger Vinson might be asked why he didn't consider these distinctions?

Posted by: Neil B on February 1, 2011 at 9:49 AM | PERMALINK

However, if I am a perfectly healthy person and by the grace of luck (or a higher power) never have to enter a hospital during my life time, someone tell what interstate commerce "activity" have I engaged myself in?

Were you also born at home, never immunized and have never in your lifetime visited a doctor or dentist?

Posted by: The original Frank on February 1, 2011 at 10:02 AM | PERMALINK

A person with no insurance today could still buy insurance tomorrow, and that fact alone affects the price of insurance for everyone else. The judge is acting as if the decision not to buy insurance is irreversible.

Posted by: KenS on February 1, 2011 at 10:02 AM | PERMALINK

If hospitals were no longer required to care for those with no ability to pay, (an unfunded mandate lauded by George W. Bush, oddly) people would be darn sure to be insured.

When they could not afford it and died as a result, subsidies would kick in like food stamps resulting in an ACA like system.

Either that or the GOP would make sure poor people would continue to die.

I could see either happening and both would be considerably cheaper than the current Socialist system of saving poor people when they're on death's door and extremely expensive to treat.

The current system is the worst of both private and public care and our health expenses as a fraction of GDP prove it.

Posted by: toowearyforoutrage on February 1, 2011 at 10:04 AM | PERMALINK

State governments have been requiring automobile insurance for years. Is that going to end ?

Posted by: Stephen on February 1, 2011 at 10:06 AM | PERMALINK

It's not a question of anyone 'free riding' on the system.

That emergency rooms can't actually refuse someone is a law, not something in the nature of emergency rooms. If you don't like that, change the law, there's nothing illegal about it.

How can you be 'free riding' on something that's a human right? Are kids thrown out of public school if their parents are too poor to pay taxes?

A person who's bedridden must still pay highway taxes, though he may never use the highways himself he still benefits from all the things that travel over the highways, just as a person who never goes to a doctor (if that's their religion or something) benefits more from a society full of healthy people, as opposed to a society full of sick people, and a society full of healthy people is a more general good than a society full of satisfied turnip-eaters.

Which comes back again to why it's wrong to describe healthcare as a commodity and if it's not a commodity how can the commerce clause apply?

Perhaps this is the actual master plan, to get the Supreme Court to rule that it isn't a commodity, boxing them into saying it's a human right.

(for the business-minded, if it's not a commodity, what is it?)

Posted by: cld on February 1, 2011 at 10:06 AM | PERMALINK

A person with no insurance today could still buy insurance tomorrow, and that fact alone affects the price of insurance for everyone else. The judge is acting as if the decision not to buy insurance is irreversible.

Indeed, it is the propensity of society's less responsible and far-seeing members (I almost added "grossly selfish," but let's assume the stupidity without the malice to be generous) to purchase insurance only when they will immediately benefit from it that creates the need for universal (or near-universal, since that's all we can get) insurance.

Posted by: The original Frank on February 1, 2011 at 10:08 AM | PERMALINK

Well, there you go,

http://tpmlivewire.talkingpointsmemo.com/2011/02/south-dakota-considers-requiring-gun-ownership.php?ref=fpb

Republicans in South Dakota introduce a bill to require everyone over 21 to buy a gun.

Posted by: cld on February 1, 2011 at 10:10 AM | PERMALINK

Concerned--the wheat/food example is not appropriate. While everyone must eat, there is no shortage of options outside of wheat. I.e. there is no free-rider problem. With healthcare, there is a free-rider problem so long as people can not be denied health care based on their ability to pay. Huge difference.

Posted by: cudevil on February 1, 2011 at 10:11 AM | PERMALINK

Am I missing something? - the test of whether the commerce clause gives Congress authority to act is not focused on the mythical ONE person who never gets sick or injured, but on the HEALTH CARE INDUSTRY

FROM WIKIPEDIA:
The Court upheld a ban on the growth of marijuana intended for medical use on the grounds that Congress could rationally conclude that this growth [of marijuana] might make enforcement of drug laws more difficult by creating an otherwise lawful source of marijuana that could be diverted into the illicit market:

In assessing the scope of Congress' authority under the Commerce Clause, we stress that the task before us is a modest one. We need not determine whether respondents' activities, taken in the aggregate, substantially affect interstate commerce in fact, but only whether a “rational basis” exists for so concluding. Given the enforcement difficulties that attend distinguishing between marijuana cultivated locally and marijuana grown elsewhere, 21 U.S.C. § 801(5), and concerns about diversion into illicit channels, we have no difficulty concluding that Congress had a rational basis for believing that failure to regulate the intrastate manufacture and possession of marijuana would leave a gaping hole in the CSA. Gonzales v. Raich

'''''''''
... the mere status of being without health insurance, in and of itself, has absolutely no impact whatsoever on interstate commerce (not 'slight,' 'trivial,' or 'indirect,' but no impact whatsoever)
'''''''''

Posted by: SteveADor on February 1, 2011 at 10:17 AM | PERMALINK

"Yes, there may be folks who don't want to buy insurance, who would be penalized under the law. But under our system, those folks still get sick, still go to the hospital with medical emergencies, and -- here's the kicker -- still get care. As you may have noticed, for quite a while, it's been one of the right's favorite arguments: the uninsured can always just go the emergency room and receive treatment, whether they have insurance or not."

As Alan Grayson pointed out, the radical rightwingers don't want you to go to an emergency room, they want you to DIE and save everybody the cost. If you don't have the wherewithal to buy insurance, tough shit. They use that last sentence because they know they can't tell the public what they are really thinking.

All the republican plans break down at this point. You either are committed to providing care to everyone, or you aren't. If you are, single payer is by far the most effective plan. If you aren't, then some people will have to be kicked to the curb for the "common good."

Soylent Green, anyone?

Posted by: bdop4 on February 1, 2011 at 10:17 AM | PERMALINK

The "necessary and proper" clause has nothing to do with anything here; it neither legitimates the law or prevents Congress from passing it. The only question is the extent of Congress' commerce clause power.

Posted by: Ron Mexico on February 1, 2011 at 10:17 AM | PERMALINK

Geez, I wonder how Vinson would rule should President Palin force through an Act which would require every male US citizen to purchase a musket, bayonet, two spare flints, ammunition, a horn and knapsack and report to their local militia when so ordered?

Posted by: berttheclock on February 1, 2011 at 10:18 AM | PERMALINK

I have asked at several places before, and now, once again: Bush and his henchmen mandated that all Medicare recipients buy Part D (prescription insurance) policies by a certain date or pay a penalty if and when they did buy one.
Is this not roughly the same thing?

Posted by: roughdraft on February 1, 2011 at 10:25 AM | PERMALINK

This is why we needed a public option.

Steve's argument would also apply to a law that required everyone to send their children to private shcool (the cost to society of not educating your children...) or to employ a private police force or subscribe to a private fire department.

Posted by: Mike on February 1, 2011 at 10:36 AM | PERMALINK

Indeed, if we'd gone for single payer or at least more of public option, those would have had no constitutionality problems (at all, for rational people) since those are services provided through tax (in some sense) revenues. Ironically it was Obama trying to "accommodate" conservatives and the business establishment ("not put health insurance companies out of business" - and I'm not saying we should myself, just pointing out the irony here) that led to the mandate to buy from private companies instead, which is the very issue that causes conservatives problems. Maybe the latter should have thought that through.

Posted by: neil b on February 1, 2011 at 10:45 AM | PERMALINK

Quoting a Wall Street Journal Op-Ed? Shouldn't your handle more accurately be "Concern Troll"?

Posted by: Gregory on February 1, 2011 at 10:47 AM | PERMALINK

ConcernTroll wrote: if I am a perfectly healthy person and by the grace of luck (or a higher power) never have to enter a hospital during my life time

But there's no guarantee of that, and because of that, a nationally regulated hospital system must be maintained for when -- not if -- you, or anyone else, does have to enter a hospital. Moreover, as has been painstakingly explained before, emergency care must be available regardless of ability to pay. So by pretending that you don't participate, you're actually a greater burden on the system.

Posted by: Gregory on February 1, 2011 at 10:51 AM | PERMALINK

It is also an "activity" NOT to do something. By not smoking I am affecting interstate and intrastate commerce by choosing NOT to use the product. It's like saying not voting is having a zero consequence when just the opposite is true. This judge is desperately 'seeking Susan" finding any reason to overrule the ACA.

We should all start threatening single payer as a replacement.

Posted by: bjobotts on February 1, 2011 at 11:35 AM | PERMALINK

Steve Benen wrote:

"Indeed, the Constitution empowers the government to make laws that "shall be necessary and proper" to "regulate commerce among the several States." ACA proponents say the mandate is necessary and proper to effectively regulate the marketplace; Vinson says the necessary and proper clause of the Constitution doesn't really count."

Steve's not exactly a Constitutional scholar, is he? Using this rationale, Congress could pass any law it pleased, provided they deemed it "necessary and proper". Sheesh.

Posted by: Perplexed and Amused on February 1, 2011 at 11:39 AM | PERMALINK

Using this rationale, Congress could pass any law it pleased, provided they deemed it "necessary and proper".

Yes, they could. Did you have a point...?

Posted by: Gregory on February 1, 2011 at 11:52 AM | PERMALINK

Perplexed, we can't just look at things all in process terms like procedurally being able to mandate anything in category X. Heck, the Ninth Amendment could be an excuse to claim that any claimed right was one of those "unenumerated rights" that deserves post-Constitutional appreciation and enablement - now what? Clearly, our officials have to make wise choices over which candidates deserve such recognition (maybe "privacy" for example) and which don't. It is indeed a judgment call for good judgment, not just our viewing as if inert dolts the received wisdom from our founders.

The wisdom of choosing that (like for most laws in general) in particular is the essence of whether it makes for a good law ("all else being equal.") The point of universal coverage of some kind (and sure, let's look at various ideas like the French system which is said to work well) is that almost everyone is subject to the threat of possible need of the health care system (note also injury issues not just "sickness"), that health problems can be very burdensome occasional events like accidents are, so it "makes sense" in the pragmatic view to spread out the support for the service. And it can well be argued to be in "the general welfare" to have health service "available" aside from ability to pay, as a foundation for maximum public effectiveness. As I noted above (please read my other comments re Constitution issues) it would have been better to just tax directly indeed per Section 8 instead of the mandate to buy from private companies - but maybe you forgot that *conservatives* kept getting in the way of things like Single Payer (or, mixed system with government insurance as default for those who said they wouldn't buy private insurance, and compare public option etc.) So ironically we have them to blame in large part for a more legally questionable plan to force purchase from private business (the standard Republican plan, as you know if you're as savvy as you come off.)

As for the idea of letting some stay out and take the consequences: really, tell me how that would work. The uninsured person lies knifed in the street, the hospitals say "tough crap" and so on? Aren't you afraid of "fleshing out" (so to speak) this concept, and that's why you hide it under austere metaphysical couchings?

Posted by: Neil B on February 1, 2011 at 12:03 PM | PERMALINK

Using this rationale, Congress could pass any law it pleased, provided they deemed it "necessary and proper". Sheesh.

Sure.

If the Constitution said nothing else about anything.

Posted by: cld on February 1, 2011 at 12:08 PM | PERMALINK

Concerned wrote "However, if I am a perfectly healthy person and by the grace of luck (or a higher power) never have to enter a hospital during my life time, someone tell what interstate commerce "activity" have I engaged myself in?"

So...do you expect to live forever? Because if you don't, you will surely utilize some form of medical services at some point in the future. Unless you meet your demise by being lost at sea.

Posted by: jeri on February 1, 2011 at 12:39 PM | PERMALINK

Personally I don't think that anyone should be required to buy health insurance -- as long as they post a mandatory cash bond sufficient to cover any and all emergency care they might receive and include with it a lien on any property they own so that if the expenses exceed the cash bond then their property could be seized to cover the expenses.

Since the health care system is required to take care of them in emergency cases, they should be required to prepay if they do not have insurance. Insurance, of course, would have to be certified as adequate or inadequate to cover such expenses, and the bond required if the insurance submitted was not certified as adequate.

That should meet the libertarian's idiotic arguments. Oh, and no property held in trusts could be exempt from the government lien.

Anyone without the bond should, of course, be required to have adequate health insurance.

Posted by: Rick B on February 1, 2011 at 1:01 PM | PERMALINK

I'm getting tired of the corporatist sponsorship of this blog by the ultimate symbol of privileged white man: Wonder Bread.

Posted by: Brian on February 1, 2011 at 1:27 PM | PERMALINK

I asked the following hypothetical above (see here http://www.afoolsgame.com/?p=63): Congress imposes an additional flat income tax equivalent to the size of the penalty on everyone in the country, and then exempts people from that tax (or gives them a tax credit) if they have health insurance meeting the minimum standards set by ACA.

A number of commentators responded with something like that would be constitutional, but that is not what the bill did. Which is obviously true (there are Supreme Court cases detailing the difference between regulatory penalties and taxes, plus the incidence of the tax/subsidy switches from the inactivity to an activity), but that kind of misses the point.

What I was trying to get at was that while LEGALLY there is a difference, FUNCTIONALLY it would have the same effect. Remember you are not sent to jail if you violate the individual mandate, you just have to pay a penalty. If the tax in my hypothetical was precisely the same size as the penalty, then everyone would have the exact same incentive that they have under the ACA. The CBO even estimates that the ACA will only cover like 95% of the population, because some percentage of the population will choose to pay the fine instead of buying insurance.

I think this raises two important ideas. First, it shows how the legal distinction that opponents are trying to make between inactivity and activity is totally nebulous. If the government is not allowed to penalize inactivity, then it can just incentivize the opposite activity. Its been conservative mantra for decades that the incidence of the tax is irrelevant to the actual costs (which is true), so why cant we see the individual mandate in the same light of merely being another way to allocate resources.

Second, it begs the question and this is what I dont understand and want somebody to help me with of why anybody would care and why there SHOULD be a legal distinction??? The government, even if opponents are successful at the Supreme Court, would still have the constitutional power to do things that have the exact same FUNCTIONAL effect. You will have no greater liberty, because the decisions you can make and the incentives you have to make them wont have changed.

-AFG
afoolsgame.com

Posted by: AFG on February 1, 2011 at 6:15 PM | PERMALINK




 

 

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