James Capretta: How Many People Will Pay The Individual Mandate Tax For 2014?

e21, May 7, 2014

The most important, and uncertain, provision of Obamacare remains the individual mandate.

Obamacare’s authors believed it was crucial to the viability of the law to impose a new obligation on U.S. citizens and legal residents to enroll in government-approved health insurance. This new obligation was to be enforced by a penalty on the non-compliant, collected through the income tax.

In NFIB v. Sebelius, the Supreme Court, led by Chief Justice John Roberts, rejected this conception of the mandate. The court ruled that Congress did not have the authority to compel the purchase of government-approved health insurance under the Constitution’s commerce clause. However, the Court further ruled that Congress did have the authority to give citizens a choice between enrolling in health insurance or, alternatively, paying a tax, so long as the tax was not so high as to make insurance enrollment effectively compulsory. In other words, in the eyes of Chief Justice Roberts, the tax for going uninsured that was enacted in Obamacare is just another tax, and not a penalty for non-compliance with a federal law.

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