Last week, the United States Supreme Court held that the Affordable Healthcare Act's ("Act") individual mandate, although unconstitutional under the Commerce Clause and the Necessary and Proper Clause was constitutional under the Taxing and Spending Clause. I disagree for two reasons. First, the "[s]hared responsibility payment" exacted from those who do not buy health insurance does not fall under the Taxing and Spending Clause because its primary purpose is to alter behavior and not to raise revenue. If there is to be any distinction between taxes and penalties, surely it is that taxes raise revenue first and alter behavior second while penalties alter behavior primarily and raise revenue as a plus. Second, to the extent that Justice Roberts ruled the way he did to protect the legitimacy of the court, he did exactly the opposite. The Supreme Court is to interpret the law; not to engage in politics and protect the legitimacy of the Court in the eyes of the public. By deciding issues not on their merits, but on public opinion, in fact, diminishes the legitimacy of the court. Besides, the Act, and especially the individual mandate, is very unpopular.
The Affordable Healthcare Act intends to increase healthcare coverage and lower insurance premiums. Currently, federal laws require hospitals to care for people regardless of whether they have insurance or not. See, e.g. 42 U.S.C. 1395(d)(d). This creates a free-rider problem that the Act seeks to avoid by making sure everyone gets insurance or pays their own way. The Act makes a number of other changes in the current healthcare system too. It requires insurers to provide policies to those with most preexisting conditions (excluding tobacco use) and prohibits insurers from discriminating against those with preexisting conditions. Medicaid is extended to cover all people under 133% of the federal poverty level ($14, 856 for an individual) and subsidizes insurance for families making up to 400% the poverty level. The overall objective is praiseworthy; but the execution is lamentable.
Although I like the provision requiring insurers to cover preexisting conditions, I do not think preexisting conditions that are caused by an individual's poor choices should be treated equally as preexisting conditions that are someone else's fault, an act of fate, or genetic. Although I want to get rid of free riders too, there are other ways to do that. Perhaps mandate employers to cover their employees and create an unemployment program. Perhaps let the states figure it out on their own. Perhaps create a public/private balance by providing a limited-public healthcare (preventative care and emergency services only) that is restricted so as to allow private hospitals to thrive.
Chief Justice Roberts, writing for the majority, was correct in determining that the individual mandate is unconstitutional under the Commerce Clause. The Commerce Clause regulates commerce and gives Congress only the right to regulate commercial activities. If an activity does not endanger another's fundamental rights and is not commercial in nature, it is generally outside the regulation power of Congress. The individual mandate does not purport to regulate existing commercial activity but attempts to coerce people into the market.
My contention with the Chief Justice has to do with his notion that the "shared responsibility payment" is a tax rather than a penalty. Unlike Congress' other powers, the taxing and spending power is unlimited. As long as the government is primarily spending its revenues or raising revenues it can do whatever it likes. If it wanted, Congress could institute a national bake sale in an effort to raise a lot of dough. Essentially, Justice Roberts says that unless legislation is unavoidably unconstitutional, then judges should decide to uphold the legislation and respect the democratic process. Justice Roberts believes that to call the shared responsibility payment a tax is plausible and thus, to protect the democratic process, you have to agree that it is a tax. I disagree. Unless the construction truly is 50/50 ambiguous, a judges job is to interpret the law and call it how the preponderance of the evidence points. Justice Roberts is changing the evidentiary standard for civil cases without giving any meaningful explanation as to why.
Additionally, I do not think calling it a tax is reasonable. Many people call it a tax for political reasons; but they don't call it that because there is anything more than the slightest whim to suggest that the fee is a tax. Taxing is to raise revenue (see, e.g. Rev. Rul. 79-180); penalties incentivize affirmative behavior. Penalties have a wag your finger feeling to them. Taxes do not. Even the name of the penalty, "shared responsibility payment" implies that it is a penalty to incentivize responsible behavior. If it were a tax, it would be called the "economic offset payment" or something. The act itself even refers to the payment as a "penalty." Is there any question that Congress intended this to be a penalty? To call this a tax is to both distort the plain definition of tax and rewrite the statute to be something it was not. Chief Justice Roberts says government has called fees that are supposed to change behavior taxes before (like cigarette taxes). However, such taxes are commercial in nature or are constitutional under other provisions of the Constitution. The taxes Justice Roberts refers to seek to regulate activities that are commercial or activities that negatively effect others' liberties. It seems that the Chief Justice arbitrarily defines a penalty as fines that are unbearable or enforced by criminal institutions. Hardly an intuitive definition.
It is also curious that Chief Justice Roberts considers the penalty a penalty for purposes of the Anti-Injunction Act but a tax for other legal purposes without any real explanation. No one saw that contortion of logic coming; not even the lawyers arguing for the mandate.
The reading of the Court allows Congress to force people to buy anything on threat of getting a penalty (oops, I mean "tax"). Congress can now use the Taxing and Spending Clause all alone to force citizens to buy healthy food, bus tickets, funeral insurance, gymnastics lessons, etc. We are now less free than we were last week and the limited powers of the Federal government as intended by the Framers are less limited. We are being lulled into soft tyranny, trading our American autonomy for paternalistic and ostensible comforts and entitlements.
And what of the 10th Amendment that reserves all unlisted powers to the states? To deny states all medicaid funding if they do not implement the plan is surely so substantial as to amount to coercion against the 10th Amendment. Let the states come up with their own solutions.
The most important judicial precedent is original understanding. While we may depart from original understanding through Constitutional Amendments or enormously deliberate popular action, to depart from the original understanding of the Constitution to such an extent and on such a flimsy whim is a tragic disrespect to the miracle of the Constitution.
