Thursday, June 28, 2012
SCOTUS Upholds the Individual Mandate
Today, in a 5-4 ruling, the Supreme Court upheld the individual mandate portion of the Affordable Care Act, or "Obamacare". In the majority opinion, Justice Roberts said that the individual mandate was constitutional as a tax, but not as a penalty under the commerce clause as it had originally been pitched by supporters of the healthcare law.
"In this case, however, it is reasonable to construe what Congress has done as increasing taxes on those who have a certain amount of income, but choose to go without health insurance," Chief Justice John Roberts wrote in the majority opinion. "Such legislation is within Congress's power to tax."
While critics of the healthcare law have characterized the individual mandate as government "forcing" the American people to buy a product that they may not want or need, the majority ruling by the SCOTUS takes a different view. Their judgment was that the law doesn't force anyone to buy anything, it simply imposes a marginal tax on people who earn enough money to afford healthcare but choose not to.
What's the difference?
Well, under the individual mandate, anyone who still doesn't want to have health insurance doesn't ever have to get it. They can continue to go on with their lives without a health insurance plan. However, if that person earns enough money that they could afford health insurance if they wanted to, then they would have to pay a small tax as a penalty. This tax revenue would be used to offset the costs of providing medical care for the uninsured - which would include the individual being taxed.
Why is this a good thing?
One of the largest contributing factors to the skyrocketing cost of health insurance is the cost of covering uninsured patients. By law, hospitals cannot turn away anyone in need of life-saving medical care, so whenever an uninsured individual requires costly emergency care, those costs are eaten by the care providers. In order to offset these costs, providers charge more and more for their procedures, which means insurance companies pay more and then those costs are ultimately passed along to the consumer. In short, health insurance premiums are outrageously high because those with insurance have been paying for those without all this time.
Under "Obamacare", the individual mandate "tax" on individuals who choose to go without healthcare but who could otherwise afford it goes to offset these costs. The result is that health insurance premiums would lower as the costs of providing care would also decline. When everyone has a pool of money to pay for healthcare, there's less need to overcharge in order to create a financial safety net. This exact scenario has played out in every industrialized nation on Earth with a nationalized healthcare system.
What does this mean for you?
Well, that's up for debate. Critics maintain that healthcare costs will rise under "Obamacare", while supporters insist that costs will decline. Critics say it will add to the national debt while supporters say it will actually reduce the deficit. What is not up for debate, however, is the fact that children will continue to be covered by their parents insurance until they're 26, people will not be denied coverage due to pre-existing conditions and those without health insurance will still be made to pay into the system in some small way for that inevitable moment when they have an undeniable need for medical care, so long as they are financially able to do so.
Sure, the Republicans may be up in arms about the individual mandate today, but let us not forget it was they who originally introduced the idea of the individual mandate back in 1997 when they were debating the merits of President Clinton's universal healthcare plan. Personally, I'm not a fan of the individual mandate as a means of ensuring adequate coverage for the general population, but I am a fan of having a national healthcare framework in place that provides quality, affordable treatment to everyone without pushing all the costs onto only those who have private health insurance. Today's ruling is one major step forward towards that reality.