More Confusion to the Affordable Care Act

Statement by John Hoff, Secretary, Galen Institute

The Supreme Court today has managed to add even more confusion to the Affordable Care Act.  It finds that the individual mandate is not constitutionally permitted under the Commerce Clause, but that it can be upheld as an exercise of the Federal government’s taxing authority.

The Act provides that individuals who are not covered by insurance that meets Federal government standards must pay a “penalty.”   Although the Act does not call it a “tax” and the President assured the American people that it was not a tax, the Court has found that actually it is.

There would seem to be no limit to what Congress constitutionally could require under the guise of a tax camouflaged as a “penalty.”  Thus it seems Congress could provide that if a family does not buy a stated amount of broccoli in a month, it would have to pay a “penalty” and that this would be within its constitutional authority to tax.  Grocery stores could be required to report broccoli purchases to IRS to assist tax collection.

The message of today’s decision is clear: Congress is given expanded authority to tax, without having to say that it is imposing a tax, and Presidential assurances have no weight.  The political process, immediately and more fundamentally in November, will reflect how Americans respond to the verbal gamesmanship their government.

There is a critical need for meaningful and workable reforms to the health care system.   New reform legislation should be focused, clear, and understandable.   Instead of top-down direction from Washington, as imposed by the Affordable Care Act, reform should harness the power of competition among providers and insurers to give Americans choice and control over their health care.  Thus empowered, Americans will produce the flexible, innovative, cost-effective, and responsive health care system they want.   The collective wisdom of Americans buying insurance and choosing their health care will be far more effective than the Affordable Care Act’s misplaced effort to control this highly complex and inherently personal activity from Washington—exercised now through a seemingly unlimited and veiled expansion of its taxing authority.

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