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.

2 comments:

  1. The bill has some good, but alot of bad. The fact that the supreme court just set a precedent that the government can force you to buy ANYTHING if its claused under a tax is VERY bad. It increased taxes on small businesses which make up a majority of the job market, and that means now there will be even less jobs opening as small businesses will be even less likely to want to hire people. The biggest problem I have is that add this to how easy it is to abuse Welfare, Unemployment, Freedom Cards (food stamps) and now you can get free health care? Why would anyone who makes less than 45-50k a year want to work? You cant stick bandaids on everything and hope it fixes it self. They should fix all the broken abused crap first, then address health care. I also believe healtcares biggest problem was the fact they could drop/increase/deny you for pre-existing, tho its fixed now, lets face it, that should have been fixed 20 years ago. They should also cap frivolous lawsuits which would drive alot of insurance costs for doctors/hospitals down which would decrease the amount they need to charge to cover themselves. This worked amazingly in California and Texas, but guess what. The obamacare bill, because he needed a few votes for it, edited the bill and made it basically illegal to cap lawsuits so he could get a couple of Cali/Tex reps to sign off on it. Yeah, thats how broken the government is. Lets fix it for the people who vote for us (read the poor) and give them free handouts and fuck everyone else.

    Also, look at Massachusettes. Doctors are bouncing out of the state so they dont have to deal with Romneycare. Alot arent even taking romney care because they have to wait 6+ months to get paid. People are complaining they have to drive 3+ hours to see a doctor if they can even get an appointment within a month time frame.

    Thats in MA! Wait till the feds start paying for people. My parents business does military transportation and it takes them 2-12 months to pay.

    The idea is correct and in the right place, but the implmentation (sprelling is gewd) is horrible.

    ReplyDelete
  2. I think you make some good points, but I disagree with the characterization that anyone is being "forced" to buy anything. Under the individual mandate, you don't have to have health insurance if you don't want it, so you aren't being "forced" to buy anything. However, if you earn enough to afford health insurance but choose not to buy it, then you will have to pay a small tax ($600-odd dollars or 2% of your income). I guarantee you the average annual health insurance premium is much higher than 2% of the average middle-class household income...

    As for the commonly fostered conservative lament of "Why would anyone who makes less than the middle-class average want to work?" The answer is because living on government assistance SUCKS. The lifestyle afforded by welfare, food stamps, section 8 and government health care is hardly lavish. Existing in a state of maintained poverty where one is just able to survive but never able to actually thrive is horrendous and I honestly pity those who would seek that out as an alternative to getting a job and busting your ass to have a decent quality of life. To me, people who are content to sit on the dole are people who have learned to be happy with literally nothing and live a borrowed life. That may be fine for some people, but the majority of the population - myself included - desire much more than simply survival.

    ReplyDelete