Call it a tax, but there is no such thing as a free lunch.
ObamaCare (a.k.a. The Affordable Care Act or ACA) is a huge law with sections and subsections. It was introduced because 30 million Americans do not have health insurance, which is considered by many to be a basic right, and to mandate incentives to make the health care system more efficient, effective and safe. The law would force every American to carry health insurance and obligate insurance companies to cover everyone, even those with pre-existing medical conditions. But a few key provisions were challenged by states and parts of the federal government on the basis of constitutionality. The Supreme Court was brought in to decide the argument.
Two key provisions caused the most concern:
The Individual Mandate: Is it constitutional to make every American buy health insurance or pay a penalty? This has to do with whether Congress has the power to regulate commerce between states.
The Medicaid Expansion: Medicaid is a health insurance program that presently covers low income pregnant women, single parents living with children, individuals who meet disability standards, and adults over 65 living in a nursing home. The new law would expand Medicaid coverage to include everyone under age 65 who earns less than 133 percent of the Federal Poverty Line. Beginning in 2023, states will have to pay 50 percent of the bill, but they claim this creates an undue and unreasonable financial burden and, as such, is unconstitutional.
Several possible outcomes were on the Supreme Court bench. The Court could:
- Uphold the entire law.
- Strike the mandate, but keep the penalty and everything else.
- Strike the mandate and the penalty but keep everything else.
- Strike most or all of the law.
- Do nothing until the law is in place and someone alleges actual harm.
This is What Went Down
The Supreme Court upheld the entire law. The individual mandate was struck down under interstate commerce law but it was upheld under the constitutional tax-writing provisions of the Congress and the President. Now, Congress cannot impose a civil penalty for not buying health insurance, but for those not purchasing, a tax penalty will ensue. Now, we will all have insurance, even those among us who are already sick, which is necessary to meet the health insurance pools 80/20 formula: 80 percent of healthy participants pay for the 20 percent who are sick. Get ready for new incentives to keep 80 percent as healthy as can be.
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