The federal government will be allowed to tax people for failure to have health insurance. The U.S. Supreme Court ruled that the Patient Protection and Affordable Care Act is mandate requiring Americans to buy health insurance or pay a penalty is unconstitutional under the commerce clause but allowable under a taxing clause.
The landmark decisions end two years of legal uncertainty and vigorous barbecue and cocktail party debates. The decision has wide-ranging implications that are yet to be fully understood.
“The Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax. Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness” Chief Justice John Roberts wrote in the ruling.
The 26 states that opposed it said that while Congress has the authority to regulate interstate commerce, it doesn’t have the power to require people to buy a product.
One area of the law that did see a significant restrict ion was the portion of the law relative to the expansion of Medicaid, the government health-insurance program for low-income and sick people. The ruling gives states some flexibility not to expand their Medicaid programs, without paying the same financial penalties that the law called for.
According to the Congressional Budget Office, the law will cost the government about $938 billion over 10 years. The CBO has also estimated that it will reduce the federal deficit by $138 billion over a decade.
It is unlikely this will be the last we have heard of it. Our politicians will still have more to say. And barbecues and cocktail parties will not be left bereft of conversation this summer.
What do you think?