• Constitutional questions about Obama’s new health proposals

    2 overlooked aspects of the President’s proposal:

          1.  The missing provision:  

    In Title 26, Section 5000A, strike “penalty” in each place that it appears and replace it each time with “tax.”

    This one sentence would all-but guarantee that the individual mandate was constitutional as an exercise of the taxing power.

          2.  The dangerous provision (at 40):

    Apply a single blended matching rate to Medicaid and CHIP starting in 2017. Under current law, States face a patchwork of different Federal payment contributions for individuals eligible for Medicaid and CHIP. Specifically, State Medicaid expenditures are generally matched by the Federal Government using the Federal medical assistance percentage (FMAP); CHIP expenditures are matched with enhanced FMAP (eFMAP); and the Affordable Care Act provides increased match for newly-eligible individuals and certain childless adults beginning in 2014. Beginning in 2017 this proposal would replace these complicated formulas with a single matching rate specific to each State that automatically increases if a recession forces enrollment and State costs to rise. This proposal is projected to save $14.9 billion over 10 years.

    This change would open a new, serious line of attack on the Medicaid anti-commandeering cases against the ACA (see prior TIE coverage at par. 2).  The Medicaid expansion claims haven’t received nearly the same press as the individual mandate, but should be taken seriously. Really, is anyone watching the store on this? If I was forced to choose, I’d protect Medicaid expansion over the IM.

    • If only it were so simple. Swapping “tax” for “penalty” won’t change the legal analysis. The constitutionak inquiry is aimed at substance, not form. Not “do they call it a tax?” but “is it actually a tax?”

    • Ah., yes. But then again, Obama wouldn’t want to be recognized as increasing our federal taxes by ~50%.

      Our current spending (fed, state and local) is about 38% GDP.

      If Obamacare was a “tax”, then we would add about 9% (total private share of health insurance spending) to the spending % of GDP. Bringing our total spending rate to almost 50% of GDP.

      Obamacare forces our government spending into one of the highest of all OECD countries.

    • Swapping “tax” for “penalty” won’t change the legal analysis. The constitutionak inquiry is aimed at substance, not form.

      If only it were true.

      Ever since US v. Miller, which upheld the 1934 “tax”* on machine guns, the Supreme Court has been extraordinarily deferential to Congress when the latter uses its tax powers to regulate behaviors outside their legitimate authority to regulate. The Court held that, as long as Congress called it a revenue-collecting measure, the Court was prepared to take them at their word, however punitive or coercive that tax may seem to be.

      It’s a terrible precedent and a terrible practice in a nation supposedly governed by laws, but people are generally content to sacrifice principles of constrained government when they approve of the specific unlawful policy in question.

      [* – The law required a “tax stamp” to buy a fully automatic firearm. Obtaining said tax stamp required the purchaser to submit to federal investigation, get permission from his local chief law enforcement agent, and agree to notify the federal government before taking his taxed firearm over state lines. The “tax” was also $200, more than the cost of most machine guns at the time.]

    • I’m unclear on this post. Is the first proposal a wish, or something actually in the proposal? I’m not finding anything along those lines in the President’s proposal.

    • @ elmo: that was an excise tax, which the feds can clearly levy.

    • Unlike the current excise tax on all firearms and ammunition, which really are a revenue-collecting measure used to pay for conservation and hunter safety programs, the NFA “tax”, which more than doubled the cost of the commodity and added burdensome process and registration, was clearly intended as a punitive measure to discourage people from owning machine guns and other then-controversial weapons.

      If the Court was willing to look the other way and take it as no more than a tax (as you clearly are), then they may be just as willing to do the same for a punitive “tax” on going uninsured.

      I mean, what are you, some kind of tax-protesting anarchist libertarian? 😉