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View Diary: The ACA ruling: What the Court will decide (168 comments)

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  •  This is all so bizarre to me (11+ / 0-)

    ACA imposes an annual penalty of $95, or up to 1% of income, whichever is greater, on individuals who do not secure insurance; this will rise to $695, or 2.5% of income, by 2016. This is an individual limit; families have a limit of $2,085.

    The tax is not big enough to really be coercive. People (particularly young people) who cannot or do not want to pay for insurance will pay the tax instead without being dramatically harmed. That's not really a mandate.

    I am a tax lawyer. The idea that a tax (that's what IRC s. 5000A is) you don't have to pay if you have health insurance could be unconstitutional boggles my mind. It seems like we are here today, expecting big chunks of the ACA to be invalidated, because the administration was not willing to admit that the so-called mandate is a tax that technically brakes Obama's campaign promise not to raise taxes on anyone making less than $200k. All the way up to and through oral arguments, the government refused to acknowledge that the penalty is a tax and then articulate an appropriate argument on that basis. The tax code has been used in thousands of ways by Congress to encourage people to engage in economic transactions with other private parties. The 'mandate' is not substantially different from these other Code provisions. I'll be very curious to see how the distinction is drawn by the conservative justices.
     

    •  interesting coincidence (0+ / 0-)

      The 2.5% "penalty" for me happens to be about what 2 months' premium will be for me at the lowest level of coverage. (a little over $1000) However, That "lowest coverage" premium would also just happen to be about $6000 a year - the same as the subsidy.
      However, as uninsured I pay about $700 a year on health care,(from a clinic that provides much better care than the HMO that provides the "lowest level" coverage)  and thanks to the fact that I've saved that $5300 a year rather than spending it I have over $150,000 in home equity. If I were forced to pay a $150,000 medical bill by drawing on that equity the mortgage payment would still be less than an insurance premium would be.
      Except that with the subsidy the government would borrow the money to pay that premium rather than me.
      Bottom line for me - under the ACA I save less than $700 a year (unless I have a major bill and survive) but my children (who in my case do not exist - therefore your children) will lose $6000 a year for the next 9 1/2 years plus interest.(assuming I survive until Medicare) And I will get poorer care or pay a higher premium for access to the better doctors I have now.

    •  As a tax lawyer, you should also know that (1+ / 0-)
      Recommended by:
      grover

      the penalty cannot be a tax, as it would then be a direct capitation tax (the same amount charged to everyone, and rich people paying an extra income tax on top), which is unconstitutional.

      Article I, Section 9, Clause 4:

      No Capitation, or other direct, Tax shall be laid, unless in proportion to the Census or Enumeration herein before directed to be taken.
      I do agree that it would be much cheaper to pay the penalty than buy insurance if you are healthy.
      •  I disagree. (1+ / 0-)
        Recommended by:
        Stroszek

        Take a look at s. 5000A(e). Plenty of exemptions. It's not a capitation as defined by Hylton v. US.

        The penalty under s. 5000A is not a tax on property, and its imposition is contingent upon numerous factors, including income and the way an individual finances health care, i.e., a particular use of property, see Bromley v. McCaughn. Therefore it is not prohibited by Art I.9.4.

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