US Files Brief on Affordable Care Act Mandate

The Supreme Court will decide if the individual mandate of the Affordable Care Act is constitutional. The Government yesterday filed its opening brief, available here.

Under the Affordable Care act, almost every American will have to obtain health insurance by 2014 or pay a financial penalty. The question the court will decide is whether the minimum coverage provision is a valid exercise of Congress’s powers under article I of the Constitution.

Analysis is provided by Scotus Blog and legal analyst Andrew Cohen at The Atlantic.

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    I think the brief explains the mandate (5.00 / 1) (#4)
    by andgarden on Sat Jan 07, 2012 at 05:41:52 PM EST
    quite well:

    Congress provided that, beginning in 2014, non-exempted federal income taxpayers who fail to maintain a minimum level of health insurance coverage for themselves or their dependents will owe a tax penalty for each month in the tax year during which minimum coverage is not maintained. 26 U.S.C.A. 5000A. The amount of the penalty will be calculated as a percentage of household income for federal income tax purposes, subject to a floor and capped at the price of forgone insurance coverage. 26 U.S.C.A. 5000A(c). It will be reported on the taxpayer's federal income tax return and assessed and collected by the Internal Revenue Service (IRS) under the Internal Revenue Code in the same manner as other assessable penalties. 26 U.S.C.A. 5000A(b)(2) and (g).

    Individuals who are not required to file federal income tax returns for a given year are exempt from the penalty. Congress also exempted individuals whose premium payments would exceed eight percent of their household income, individuals who establish that obtaining coverage would be a hardship under standards to be set by the Secretary of HHS, and members of recognized Indian tribes. 26 U.S.C.A. 5000A(e). Individuals who qualify for religious exemptions, are incarcerated, or are undocumented aliens are not subject to the minimum coverage provision. 26 U.S.C.A. 5000A(d).

    Various types of insurance coverage are deemed minimum coverage, including government-sponsored programs such as Medicare, Medicaid, CHIP, and programs offered by the Departments of Defense and Veterans Affairs. 26 U.S.C.A. 5000A(f)(1)(A). Minimum coverage also includes eligible employer-sponsored plans and plans offered in the non-group market. 26 U.S.C.A. 5000A(f )(1)(B)-(D); 42 U.S.C.A 18011.

    And they finally called it (5.00 / 2) (#5)
    by andgarden on Sat Jan 07, 2012 at 05:42:55 PM EST
    what it has always been: "Congress assigned adverse tax consequences to the alternative of attempted self-insuring."

    Don't have it handy but can find it (none / 0) (#6)
    by BTAL on Sat Jan 07, 2012 at 05:57:32 PM EST
    Does not the act specifically state that the penalty is NOT part of the tax code.  Regardless of how it is reported or which agency does the collection (the IRS was chosen as it is already in the business so to speak) the language is clear it is not a tax.  Add that to the on the record statements of everyone from Obama down that it was not a tax.

    You are elevating form over substance (none / 0) (#7)
    by andgarden on Sat Jan 07, 2012 at 06:14:25 PM EST
    As the government's brief explains:

    Congress's taxing power provides an independent ground to uphold the minimum coverage provision. In "passing on the constitutionality of a tax law," a court is "concerned only with its practical operation, not its defi- nition or the precise form of descriptive words which may be applied to it." Nelson v. Sears, Roebuck & Co., 312 U.S. 359, 363 (1941) (citation omitted). The practical operation of the minimum coverage provision is as a tax law. The only consequences of a failure to maintain min- imum coverage are tax consequences: non-exempted federal income taxpayers will have increased tax liability for those months in which they fail to maintain minimum coverage for themselves or their dependents. That additional tax liability will be calculated on the basis of the taxpayer's household income (subject to a floor and a cap), reported on the taxpayer's federal income tax return, and collected by the IRS.

    The fact that the minimum coverage provision--like longstanding tax provisions such as the exclusion of employer-paid health insurance premiums from employees' taxable income--is intended to encourage health insurance coverage has no bearing on the taxing power inquiry. It is well settled that a tax "does not cease to be valid merely because it regulates, discourages, or even definitely deters the activities taxed." United States v. Sanchez, 340 U.S. 42, 44 (1950).

    Likewise, that Congress used the word "penalty" in the minimum coverage provision, 26 U.S.C.A. 5000A(b), rather than "tax," is immaterial to whether it was a proper exercise of Congress's power over taxation. So too is the fact that Section 5000A includes the predicate for the penalty in a different subsection than those governing the penalty's calculation, assessment, and collection.

    Politically, you might have a point. Legally, you do not.


    And yet, the government is taking the position (none / 0) (#9)
    by Peter G on Sat Jan 07, 2012 at 08:13:05 PM EST
    that the litigation to strike down the ACA does not violate the Tax Anti-Injunction Act.  The Court had to appoint an independent "amicus curiae" to brief and argue the position that the Anti-Injunction Act bars pre-enforcement challenges to the mandate.

    Previously the government (5.00 / 1) (#10)
    by andgarden on Sat Jan 07, 2012 at 11:07:49 PM EST
    had taken the opposite position. Indeed, it won in at least one Circuit on that basis.

     The SG tries to thread the needle in this brief by noting that the taxing power question and the AIA question are separate inquiries. The former is one of Constitutional power and the latter is one of statutory construction.


    The tax argument has pretty much failed across (none / 0) (#11)
    by jpe on Sun Jan 08, 2012 at 06:59:34 AM EST
    the board, and for good reason; it's just not very compelling.  We can call it a tax all we want, but if it walks like a penalty and quacks like a penalty, it's a penalty.

    On the contrary (5.00 / 3) (#12)
    by andgarden on Sun Jan 08, 2012 at 07:05:19 PM EST
    Congress can call a tax a potato if it wants, but if it walks like a tax and quacks like a tax, it's a tax.

    If the mandate gets (none / 0) (#1)
    by Ga6thDem on Sat Jan 07, 2012 at 04:50:59 PM EST
    overturned does it pretty much eliminate the entire ACA? Just from reading some of the comments on the linked article it seems that if this gets overturned the only way to get universal coverage is to have single payer.

    Whether the ACA can stand at all (5.00 / 1) (#8)
    by Peter G on Sat Jan 07, 2012 at 08:01:09 PM EST
    if the minimum coverage provision is struck down is itself one of the legal issues (technically, referred to as "severability") on which the Supreme Court has called for separate briefing and argument.

    "minimum coverage provision" (none / 0) (#2)
    by BTAL on Sat Jan 07, 2012 at 05:35:25 PM EST
    That's a new phrase for the mandate I've not seen before.

    IMHO, the mandate is far more in practice than a "minimum coverage provision".

    You haven't been reading widely (5.00 / 1) (#3)
    by andgarden on Sat Jan 07, 2012 at 05:38:36 PM EST
    or thoroughly enough. The title of the provision in the Act is "Requirement to maintain minimum essential coverage." (big PDF.)