A court decision overturning the Affordable Care Act would be an egregious misreading of the Constitution.
The critics' central constitutional claim is that the 2010 law's individual-mandate provision exceeds Congress' regulatory authority. In essence, this provision requires a broad swath of Americans to procure health insurance conforming to certain federal standards. Those who do not procure this insurance must generally pay a "penalty" to the IRS.
Had the bill explicitly used the word "tax" instead of "penalty," the fatal flaw of the constitutional challenge would be obvious to all. The Constitution undeniably gives Congress sweeping power to tax. And if Congress can tax a person, and then use that tax money to buy a health-care package for that person's benefit, why can't it simply direct the person to procure the package himself, or else pay a higher tax?
Of course, tax is a word that lawmakers try to avoid at all costs, and so the euphemistic penalty won the day. Yet, as Shakespeare reminds us, "a rose by any other name would smell as sweet." Here, penalty and tax are simply two ways of saying the same thing.
Indeed, the Constitution itself does not always use the T-word when referring to taxes, broadly defined. It also uses the words excises, duties, and imposts in the opening sentence of Article I, Section 8, and elsewhere refers generally to all generic "Bills for raising Revenue." The important thing here is not the term, but how the actual instrument functions, and clearly Obamacare functions as a tax - as a revenue measure. In perfect synch with the Constitution's key word, revenue, the penalty section of Obamacare is in fact codified in title 26 - the Internal Revenue Code. The "penalty" is paid to the IRS via forms administered by that very same IRS.
Once we see that the "penalty" is a tax and that Congress has the power to tax, the constitutional case against the law collapses.
But even if the law were not a tax, it still easily passes muster as an exercise of a second key power of Congress - the power to regulate interstate commerce.
There are two questions here. First, is health-care insurance a genuinely commercial issue? Of course. Insurance is a classic economic issue of who pays for what.
Second, does health care raise genuinely interstate issues? In other words, does Obamacare address a problem that truly spills across state lines? Yes, of course.
At any given moment, millions of Americans are in states other than their home state. If they fall sick, they will go to local emergency rooms. But an obvious interstate problem arises when sick out-of-state patients lack insurance, and their emergency-room visits end up being paid for by host-state taxpayers. Obamacare solves this problem by generally requiring Americans to get insurance.
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