By Nathan Mehrens — Today the U.S.
Supreme Court in an opinion by
Chief Justice Roberts held that the individual mandate provision in
Obamacare,
i.e., the requirement for most Americans to purchase
health insurance or pay money to the IRS, is a tax that was properly
applied by Congress.
The Court held that this payment for not having health insurance was
not a "penalty" because it does not punish the individual for an
unlawful act, but is instead a use of the tax code to encourage
behavior, much like other aspects of the tax code such as tax deductions
and credits for certain behaviors and circumstances.
The Court did hold that the imposition of the individual mandate
could not be sustained as part of Congress' Commerce Clause powers, but
at the end of the day the result is the same: those who choose to not
purchase health insurance must pay a "tax" to the federal government for
exercising that right.
In a surprising move, the Court ruled 7-2 against Obamacare's
expansion of Medicaid to 133% of the Federal poverty line. The court
took issue with the way Obamacare coerces states to accept the new
funding levels by threatening to cut all current Medicaid funding for
states that do not comply.
Prior to this ruling, the constitutional limit on Congressional
spending was only theoretical. In South Dakota v. Dole, 483 U.S 203
(1987), the Court said that Congressional spending would be
unconstitutional if it effectively coerced states into agreeing to a
federal program. In that case they ruled that Congress had not gone
that far.
But this is the first case where the Supreme Court has drawn a line
in the sand and told Congress that their actions constitute
unconstitutional coercion of the states. Says Chief Justice Roberts,
In this case, the financial "inducement" Congress has
chosen is much more than "relatively mild encouragement"—it is a gun to
the head.
The conservative justices on the bench (Scalia, Kennedy, Thomas, and
Alito) would have thrown out Obamacare in its entirety solely on this
issue. But the Chief Justice, along with Ginsburg, Breyer, Sotomayor,
and Kagan, merely severed the part of Obamacare that threatens
withholding current funds to states that do not agree to expansion.
Nathan Paul Mehrens is counsel for Americans for Limited
Government and previously served in the U.S. Department of Labor under
President George W. Bush.