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HEALTH REFORM UPHELD

Today the Supreme Court upheld the large majority of Affordable Care Act (a.k.a., Health Reform, ObamaCare, ACA) including the individual mandate.

Why was the individual mandate allowed to remain in the law?  According to Justice Ginsburg and others, it is a form of a tax.

Justice Ginsburg makes clear that the vote is 5-4 on sustaining the mandate as a form of tax. Her opinion, for herself and Sotomayor, Breyer and Kagan, joins the key section of Roberts opinion on that point.

This is logic is one that economist would support (whether economists support the mandate is a separate issue).  All regulation is a form of a tax in that it restricts one’s choices and imposes a cost on consumers and/or producers.  As I noted before, one could have avoided having an individual mandate if the government simply imposed a late enrollment penalty as they do for Medicare Part D beneficiaries. Nevertheless, the logic that regulations to compel people to purchase an items is a form of a tax is logical.

Although having Health Reform upheld is a coup for Obama, it clear that conservatives will not claim that Obama passed one of the largest tax increases in history through the individual mandate.  It is unclear whether or not this will be a compelling argument for voters.

The one item in the ACA that was somewhat overturned was the Medicaid expansion.  As reported by the BBC.

“Nothing in our opinion precludes Congress from offering funds under the ACA to expand the availability of health care, and requiring that states accepting such funds comply with the conditions on their use.

“What Congress is not free to do is to penalize States that choose not to participate in that new program by taking away their existing Medicaid funding,” the Supreme Court’s opinion said.

For more coverage, see the following sources:

For brief overviews, see:

2 Comments

  1. Although having Health Reform upheld is a coup for Obama, it clear that conservatives will not claim that Obama passed one of the largest tax increases in history through the individual mandate.

    It was kind of clever how they reframed it into a tax. I suspect we’ll hear more about that soon!

    Didn’t you mean to say “now” claim?

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