George Will explains in today’s Washington Post that Chief Justice John Roberts may have temporarily rescued Obamacare by finding it to be constitutional, but by limiting the penalties for not buying health insurance, he may have made the Affordable Care Act (ACA) unworkable and put it on a path to ultimate extinction. Here’s why:
The point of the penalty to enforce the [health insurance] mandate was to prevent healthy people — particularly healthy young people — from declining to purchase insurance, or dropping their insurance, which would leave an insured pool of mostly old and infirm people. This would cause the cost of insurance premiums to soar, making it more and more sensible for the healthy to pay the ACA tax, which is much less than the price of insurance.
Chief Justice John Roberts noted that a person earning $35,000 a year would pay a $60 monthly tax and someone earning $100,000 would pay $200 per month. But the cost of a qualifying insurance policy is projected to be $400 a month. Clearly, it would be sensible to pay $60 or $200 rather than $400 per month, because if one becomes ill, “guaranteed issue” assures coverage and “community rating” means that one’s illness will not result in higher insurance rates.
But Roberts’s decision limits Congress’s latitude by holding that the small size of the penalty is part of the reason it is, for constitutional purposes, a tax. It is not a “financial punishment” because it is not so steep that it effectively prohibits the choice of paying it. And, Roberts noted, “by statute, it can never be more.” ….the penalty for refusing to purchase insurance counts as a tax only if it remains so small as to be largely ineffective.
Because the penalties are constitutionally limited by the reasoning whereby Roberts declared them taxes, he may have saved the ACA’s constitutionality by sacrificing its feasibility. So as the president begins his second term, the signature achievement of his first term looks remarkably rickety.