There’s lots hand-wringing going on today about the ongoing health care reform case before the Supreme Court. I don’t get it.
The question before the court is whether congress has the power to assess a tax penalty against people who can afford to purchase health insurance but decline to do so. It’s clear (to me anyhow) that congress does have that authority. It has it under both the commerce clause and under their taxation authority.
Health care costs have obvious implications regarding interstate commerce and interstate economic activity. Health care is a multi-trillion dollar industry. Every state, every municipality, every company, every family in this country has been pummeled by rising health care costs in recent years. The national deficit derives in no small part from rising health care costs. There are vast implications of escalating health care costs and with dealing with the uninsured. These implications transcend state borders.
If you travel to another state and get into a car accident, you will wind up in a hospital in that state. Whether or not you have insurance, whether or not you can pay your bill, whether or not the other people in that state will have to cover the cost of your care -- these are issues of interstate commerce.
The individual mandate is specifically designed to encourage people, who might otherwise take their chances on foregoing health insurance, to purchase policies from the upcoming health care exchanges. These exchanges will include national and inter-state plans. The entire point of the mandate is that it is essential in controlling costs in the plans offered in the health care exchanges, which will be available across state lines.
The counter argument is typified by the broccoli conundrum. If congress can assess a penalty for going without health insurance, where does does this slippery slope lead? Where does it end? If the tax us for not having health insurance can they tax us for not eating broccoli?
This is the flimsiest of straw men. The commerce clause ends when the activity being regulated is no longer relevant to interstate commerce. Since there is no economic necessity that compels the consumption of broccoli congress could not do so under the commerce clause.
But if congress can’t compel us to eat our vegetables using the commerce clause, they probably could do so using the tax code. The tax code is already riddled with exemptions, rebates, and penalties for all kinds of activities. That’s what the tax code is. You already pay a penalty for not owning a home, for not being married, for not having kids, for not being blind and for working for a living instead of cashing a dividend check. On the corporate side it’s even worse. No doubt there is someone somewhere facing tax implications for the manner and extent to which they do or do not produce broccoli.
A tax penalty for choosing to forgo health insurance is not extraordinary. And the punishment for ignoring the individual mandate is a tax penalty. You can’t be arrested. It’s not a crime. There’s no fine. When it comes time to pay your income tax, your health care decisions will contribute to the amount you owe the IRS when you file your taxes. And if you decide you aren’t going to pay this tax penalty - if you say screw health insurance and screw the tax penalty too -- that’s ok! There’s no penalty for that either. If you decide not to pay what you owe due to the individual mandate, the laws specifies that there’s nothing they can do about it.
The individual mandate is important to controlling health care costs across the nation and across state lines. That’s why it exists. That’s why it’s in the law. And that’s why we’re arguing over it. The enforcement mechanism is a tax penalty and a limply enforced one as well. Laws along these lines are well within the authority of congress.