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AffordableCareAct 8 - 25 Jan 2012 - Main.ArleneOrtizLeytte
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| | The government wants the individual mandate to be a tax, not a penalty, for two reasons.
1. Additional Congressional Authority Under Art. I, Sec. 8 | | | The detailed summary of the Act (dpc.senate.gov/healthreformbill/healthbill04.pdf) lists the payment as a penalty: "Beginning in 2014, most individuals will be required to maintain minimum essential coverage or pay a penalty of $95 in 2014, $350 in 2015, $750 in 2016 and indexed thereafter; for those under 18, the penalty will be one-half the amount for adults. Exceptions to this requirement are made for religious objectors, those who cannot afford coverage, taxpayers with incomes less than 100 percent FPL, Indian tribe members, those who receive a hardship waiver, individuals not lawfully present, incarcerated individuals, and those not covered for less than three months." Do the categories of objectors give us any indication as to whether it resembles a tax or a penalty? The fact that there are exceptions made for religious objectors indicates to me that the fee resembles a penalty more than a tax; I couldn't find many taxes out of which it was possible to opt out based on religious objection. It looks like you can do so with the social security tax if you have religious objections to being part of a social insurance system, but that doesn't seem to parallel the case here.
-- KirillLevashov - 24 Jan 2012 | |
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> | Without coming to any conclusions just yet, I'll add some text from the Act:
*Subtitle F—Shared Responsibility for Health Care
PART I—INDIVIDUAL RESPONSIBILITY
SEC. 1501 [42 U.S.C. 18091]. REQUIREMENT TO MAINTAIN MINIMUM ESSENTIAL
COVERAGE.*
_(a) FINDINGS.—Congress makes the following findings:
(2) EFFECTS ON THE NATIONAL ECONOMY AND INTERSTATE
COMMERCE. The effects described in this paragraph are the following:
(A) The requirement regulates activity that is commercial and economic in nature: economic and financial decisions about how and when health care is paid for, and when health insurance is purchased. In the absence of the requirement, some individuals would make an economic and financial decision to forego health insurance coverage and attempt to self-insure, which increases financial risks to households and medical providers.
(I) ...By significantly increasing health insurance coverage, the requirement, together with the other provisions of this Act, will minimize this adverse selection and broaden the health insurance risk pool to include healthy individuals, which will lower health insurance premiums...
(J) Administrative costs for private health insurance, which were $90,000,000,000 in 2006, are 26 to 30 percent of premiums in the current individual and small group markets. By significantly increasing health insurance coverage and the size of purchasing pools, which will increase economies of scale, the requirement, together with the other provisions of this Act, will significantly reduce administrative
costs and lower health insurance premiums. The requirement is essential to creating effective health insurance markets that do not require underwriting and eliminate its associated administrative costs._
The Internal Revenue Code was amended to include this "requirement"/"penalty"/"tax," including all relevant penalty amounts: http://www.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00005000---A000-.html
This sparks possible new discussion ingredients: Holmes' notion of a legal duty and what this would mean to the "bad man"; the "law and economics" rationalization for a Congressional mandate to insure yourself against health risks; and the expansion of the insurance market through governmental regulations of people's health choices (and wallets).
What bothers me is the use of communitarian language ("shared responsibility") as a guise for the creation of a stable marketplace ("economies of scale"). Perhaps that's why the word "penalty" was used instead of "tax": to instill the feeling of guilt in the uninsured. Breaking the tax code does not instill the sense of committing a crime against your community.
-- ArleneOrtizLeytte - 25 Jan 2012 |
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