The Tax part is only the Penalty for not having insurance

[cthulu2016]

The government says, "Hey, get insured."

a) You buy private insurance, or
b) You do not buy private insurance

If you opt for "b" then there is a penalty. That penalty is only in the form of money that you must pay to the government.

If there was no penalty there would be no controversy. The government saying, "Get insured," would just be advice, like the government's advice about inflating your tires, eating your vegetables, etc..

So that penalty is the entirety of the controversy.

And it is only that penalty which was examined to see whether it fell within Congress' ability to levy taxes and fees.

And it did.

With tax policy we can usually express things two ways—a tax-credit for insulating your attic can also be expressed as a tax penalty for not insulating your attic. There is no "natural" rate of taxation. As corporations have taught us, a tax break is the same as a cash payment. If it reduces the size of the tax check you write then your bank account has more money than otherwise, same as if the government had sent you a check. The home mortgage interest deduction can be viewed as a tax on renting, and so on.

Can Congress use tax policy to encourage you to buy health insurance? Sure. Why not? It already uses tax policy to tell you to not smoke, to drive less, to own a house, to send kids to college, to off-shore jobs, to park money in the Cayman Islands, to prefer capital gains to straight income, etc..

Only the penalty for not having insurance even though you can afford insurance is at issue, and only that is defined as a tax, or fee.

[HockeyMom]

1. I will pay the penalty tax because I don't WANT insurance

that I have no intention of using. You will have to drag me gaged and screaming to a doctor or hospital. If my tax money can help others who want this, so be it. It seems a lot of Dems cannot understand this.

[HopeHoops]

2. I spent a very long time paying insurance without a need for it. Now I need it.

The penalty tax is nothing compared to the cost of insurance. I'm not sure how effective it will be. Still, I have no problem with paying into the system that "insurance" is supposed to be. When I needed it, it was there.

[HockeyMom]

9. That is your choice

I paid $160 a month for insurance while I worked that I never used, even when I got hurt. I don't believe in it. It was a total waste of money, which a tax which other people who want and need, is a different story.

[HopeHoops]

13. At the moment, it isn't a choice - it's a necessity. We're held captive by it.

Fortunately, the insurance does cover a lot of the medical bills, but I've still got a large out-of-pocket and while the co-pays are reasonable, it is still a crushing burden. I held off for a couple of months with eyeglasses that are missing an ear piece (like from the lenses back). I just went in to replace them (bifocals) and the bill was about $400 (exam, glasses, frames, etc.) but my final cost was $134. My wife has gone years without them and she went in and came out with $117 (non-bifocals) out of almost $400. That's nothing compared to what ambulances, medications, hospital stays, dental, etc. cost and I'm the major drain in the first three departments.

[HockeyMom]

18. I had a $3,500 deductible

with a $450 dedcutible for scripts. NO eye coverage. That was an extra $100 a month. Unless you had a MAJOR illness that insurance covered NOTHING. Again, this was a public school district in Florida. My husband works for a private employer in Florida, and his is very similar.

This is a very Republican area. THIS is want they want. Basically, NOTHING for the middle class, or poor, if you don't have the money to make up the difference.

[HopeHoops]

19. The GOP attitude is simple - let the poor just die.

[HockeyMom]

22. At $700 a month, with that same deductible per person, for a family

people did not insure their stay at home spouses, or CHILDREN. Too much money. It would not pay for routine childhood illnesses anyway. My husband's coworker would take days off from work to "treat" his own kids when they were sick.

Wonderful world of private insurance, in Florida.

[mucifer]

29. You have no idea what the costs are going to be in 2014 with the health care exchanges

[HockeyMom]

36. The tax is 1% of your income

I personally have no income. Even my husband's income and the tax on that would still be less than our combined costs for health insurance. As of last year it was about $300 a month with those sky high deductibles, NOT based on previous illnesses. It was that for ALL employees.

[mucifer]

37. You don't know what the cost of insurance will be under the exchange

http://www.healthcare.gov/law/features/choices/exchanges/index.html


An Exchange Can Help You:
Look for and compare private health plans.
Get answers to questions about your health coverage options.
Find out if you’re eligible for health programs or tax credits that make coverage more affordable.
Enroll in a health plan that meets your needs.
States across the country are working to implement the health care law. States can apply for Exchange grants through the end of 2014. Use the map to learn more about Exchange grants in your state.

You might get certain tax credits that will help this be affordable.

[sabrina 1]

31. What if someone cannot afford to pay the tax? I know the idea of people living in this

country who do not have even $20 extra a month to spare, is an alien thought, never having been in that position and finding it unimaginable. But I can assure them that there are probably millions of Americans in that position today. Twenty dollars extra to such people would be a fortune and it's likely that if they found it, their list of things to spend it on is long, and doesn't include a tax for which they get nothing in return.

So will the poor go to jail now because they cannot pay the IRS, now a collector for the Ins. Corps, and if not, then what good is this ruling at all?

It seems we will do anything, write complex, thousands of pages long bills, go to the SC, punish people for being poor, anything to avoid granting Americans what every other civilized country has, access to HC as a RIGHT.

[kestrel91316]

34. Subsidies and Medicaid expansion kick in Jan 2014. You really MUST

spend some time reading up on the website. It's not hard to understand any of this, it's very readable if you are motivated.

http://www.healthcare.gov/

[sabrina 1]

38. I have read it. My question is in regard to working Americans, not indigent, but not considered

under the poverty line. If you do not know people like this, working class people with families, then I can see why you did not understand the question, or maybe I was not clear.

Medicaid and subsidies go to people who are under a certain income level.

But as most of us who work know, you don't have to be under that line not to have any extra money to give to the Big Insurance Corps, or to pay any penalties/taxes if you don't.

So again, what happens to working people who are over the line for subsidies and medicaid but who have so many other expenses they cannot afford the penalty/tax?

Edited to add, the indigent were always covered by Medicaid, in fact they were often better off than minimum wage workers who could not afford HC but were too 'rich' for medicaid. So I don't see where the advantage is for the indigent, since they were already covered (Thank You Dems who used to work for the people).

[kestrel91316]

32. When was the last time you had your blood pressure checked? How about your lipid profile?

And how's your weight?

Because WHEN your longstanding untreated hypertension causes you to blow a gasket and suffer a brainstem bleed, you sure as hell are going to have gigantic medical bills, and because you will be unconscious and it will be an emergency, you WILL be treated. And the bills will be enormous.

Do your loved ones a favor and fill out a living will that specifies that if you are found unconscious or not breathing for any reason at all, you do not want ANY treatment whatsoever and just let you die. Otherwise you will leave your family members a horrible mess.

Ask me how I know.

[Raine]

39. Same with me, guess I'm stuck paying the penalty as long as I'm

breathing. I've always paid it out of my own pocket and will continue to do so for anything I might need.

[Tommy_Carcetti]

3. So if you don't have health insurance but can easily afford it, give yourself a tax cut.

Get insurance.

Boom.

Problem solved.

[Nuclear Unicorn]

14. Unless insurance costs more than the tax

Which it surely does.

[HockeyMom]

20. The tax is definitely less than insurance rates in Florida

but that eliminating insurance rates based on zip codes would change that.

[alarimer]

4. I object to being penalized for not paying extortionate premiums to a PRIVATE company.

It is NOT A TAX if you have to give money to a corporation. It is extortion. Plus there is no telling how high these premiums will now be. What if the fine (or tax) is less than the premiums?

[markpkessinger]

6. You are being taxed to offset the costs ultimately borne by other taxpayers ...

... of providing care to those, like you, who do not carry insurance.

[girl gone mad]

11. Not really.

Uncompensated care is just a total non-issue in the scheme of things. It accounts for something like 2% of our overall health care costs and a significant portion of that uncompensated care is provided to people with insurance.

What this plan does, in reality, is shifts a lot of health care costs from the government and older workers onto the uninsured (mostly young, healthy people), and younger workers. From a macroeconomic perspective, it's dumb policy.

[kestrel91316]

35. Uncompensated healthcare is a HUGE problem in CA and we need to address it.

ACA addresses it better than anything to date. And it doesn't hurt the poor and uninsured - it helps them.

[NNN0LHI]

40. 2% doesn't sound like too much. But 2% of what?

I think the U.S. overall health care costs per year is around a trillion dollars.

2% of a trillion dollars is a pretty good chunk of change. Isn't it?

Don

[cthulu2016]

12. Or even just to promote a social goal

The uninsured do, as a practical matter, draw more on social resources, but the non-insurance penalty need not even be framed as tied to any financial effect.

We have all sorts of tax credits for energy efficiency, owning a home, and other things the government wants to promote, even though the renter and gas guzzler do not cost the government extra money directly.

So if Congress simply decided everyone ought to be insured because it would be a good idea they have the power to use to tax code to promote that. (That doesn't mean using tax to force behavior is necessarily good, just that they have the power.)

And come to think of it... they already did, before ACA. There are all sorts of tax credits for people and employers buying insurance.

So a very soft mandate was already there, in that the government was subsidizing the cost of health insurance, and that subsidy was a benefit unavailable to the uninsured.

[cthulu2016]

7. The penalty will be less than the cost of insurance, in most cases

Every citizen will have the option of not having insurance.

It sounds terrible for there to be a penalty for not buying something in the private sector, but a tax-credit for buying something (like cash for clunkers) sounds less bad.

You can, however, conceptualize it this way:

Congress raises everyone's taxes $400. Congress creates a tax credit of $400 for having insurance.

That math is the same as Congress fining the uninsured $400 on their taxes.

[BlueCheese]

17. That's the way I see it...

Though Roberts describes it s a tax on people who don't have insurance, as opposed to a national $400 tax. I find the first phrasing a little disconcerting.

[Nuclear Unicorn]

15. The tax levied goes to the feds who use it as revenue to subsidize policies

bought through state exchanges.

[99th_Monkey]

5. I fail to see one iota of difference

between ACA mandate, and the mandated insurance required for driving
an automobile, not to mention Medicare, which is NOT OPTIONAL. When
I turned 65, they stared TAKING (without my consent) $100 out of my
Social Sec. check.

Can any of the whiners about the mandate explain how ACA is any different
than the above two mandates?

[markpkessinger]

8. Exactly ...

...and precisely the same point I make in this thread:

http://www.democraticunderground.com/1002872950

[cthulu2016]

10. Good Post. I included the full text in this reply:

The wisdom of Roberts' reasoning (Wow - did I really just write that?)
OP by markpkessinger

I don't think I ever expected to be writing about so much as a shred of wisdom to be found in an opinion by Justice Roberts. But I guess stranger things have happened (although I can't quite think of any at the moment).

Justice Roberts quite rightly found that the distinction between "tax" and "penalty" is, in this case at least, one of mere semantics. The modest penalty imposed for non-compliance with the individual mandate is, functionally speaking, a tax designed as a revenue offset against the cost of providing care to those uninsured persons who present themselves at hospital emergency rooms for treatment and who ultimately do not have the resources to pay for such treatment. He recognized that Congress has the right to levy such a tax.

I think the President was quite foolish in his insistence some time back that the penalty was not a tax. It clearly is, right down to the agency designated to collect it, namely, the IRS. I think the President was afraid of the "t" word, and so tried to spin it as something else. I understand what his thinking likely was, but I believe it was misguided. The fact that the President tried to spin it as something other than a tax, however (for whatever reason), doesn't change the underlying functionality of what that penalty really is, as Justice Roberts correctly recognized.

A far better way for the President to present the issue would have been to characterize the non-compliance penalty as a tax to offset the costs borne by taxpayers of those who freeload off the system -- in other words, counter the emotionally laden "government is forcing you to do something" argument with another emotionally laden, and closer to the truth, argument about freeloading. Unfortunately, by insisting that the penalty was <i>not</i> a tax, he has left himself open to criticisms that he was attempting to mislead voters.

Ultimately, though, I don't think this will hurt the President.

http://www.democraticunderground.com/1002872950

[BlueCheese]

16. The part I have trouble with is this...

In all examples where the government gives tax credits for certain behavior-- buying a house, getting married, having kids, etc.-- the tax that is being relieved is your income tax. All of these lower your income tax burden. The mortgage interest deduction is not like a tax on renting because if you had no income tax, you'd have no rental tax in any sense.

The tax imposed by the ACA actually increases your tax burden if you don't have insurance. It's not a tax on income--in theory, it really is an extra tax that you pay because you didn't do something--fork money over to a private company. That seems new to me, and it's unsettling. I can't think of any other examples where you're taxed solely because of your behavior.

[markpkessinger]

21. The tax is a revenue offset ...

...against the cost of providing care to uninsured persons who present themselves at hospital emergency rooms for treatment and who ultimately cannot afford to pay for such treatment (which treatment hospitals are legally obligated to provide under already existing law). It is a tax levied against the very group whose choice not to carry health insurance has the effect of passing costs on to other taxpayers. The behavior has consequences for other taxpayers, and the tax merely offsets some of those consequences. What is so wrong about that?

[BlueCheese]

24. Are there other examples of this?

It'd make me feel better about this precedent.

[rucky]

23. But there is a subsidy. A progressive one, at that...

Individual care offered on a sliding scale for everyone from zero to four times the poverty line - and it all goes to healhcare (well, health insurance). Only those who can pay and choose not to will get fined or taxed or whatever you want to call it. Without it, we couldn't afford to subsidize premiums at the level the program promises.

[BlueCheese]

25. That's true.

It's really a tax on people who make enough money and who don't have health insurance. But it's still a tax on inactivity, which I'm not sure we've seen before,

[rucky]

28. When it comes to accessing healthcare...

any period of inactivity is just temporary. Not sure you can say that about anything else except eating, sleeping, pooping and dying.

[BlueCheese]

30. I don't think the Supreme Court decision made that distinction.

As far as I can tell the precedent has been set for just about anything.

[rucky]

33. I don't think they did.

That was my riff, but I see your point. I'm sure that some douchebag in an influential position will find a way to use this ruling to funnel public money to private industry.

[notadmblnd]

27. The tax is only for those that can afford insurance and don't buy it

low income and the poor will get assistance with their premiums or qualify for medicaid

[cthulu2016]

41. In practice, there is no "natural" level of taxation

I agree with you that it seems funny, but you can envision those familiar tax credits as being tax increases for everyone else.

We say home-owners get a tax break because that sounds better, but we could also say home-owners pay the normal tax and renters pay a tax penalty. Either perspective works, but politically one is a lot friendlier sounding.

And I think the ACA penalties for non-insurance are based on ability to pay, not a flat fee. So it's more like the income tax, in that way.

[notadmblnd]

26. i'd like to point out that the penalty is only for those that can afford insurance and don't buy it

for the low poor and low income, I believe there will be subsidies or tax credits that will help pay for coverages.