The Obama administration is maintaining its position that the federal health reform law's individual mandate is a penalty, despite the Supreme Court's decision last week to allow the mandate to stand as a tax, The Hill's "Healthwatch" reports (Baker, "Healthwatch," The Hill, 6/29).
In a 5-4 ruling written by Chief Justice John Roberts, the majority reaffirmed the law's requirement that most U.S. residents must purchase health insurance by 2014, or pay a penalty. However, Roberts noted that the "financial penalty for not obtaining health insurance may reasonably be characterized as a tax" and is therefore constitutional.
Roberts wrote, "Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness," adding, "Simply put, Congress may tax and spend. ... The federal government may enact a tax on an activity that it cannot authorize, forbid or otherwise control" (California Healthline, 6/28).
Administration Maintains Position
During an interview with CNN on Sunday, White House Chief of Staff Jack Lew insisted that the mandate's penalty is not a tax and that the high court's decision does not make it a tax. Lew said, "First of all, the law is clear, it's called a penalty. Second of all, what the Supreme Court ruled is that the law is constitutional," adding, "[The majority] said it was using the power under the constitution that permits it. It was not labeled" (Norman, Politico, 7/1).
Lew expanded on his defense of the mandate during a separate interview with ABC. "For Americans who buy health insurance or who can't afford it and get it through a government program, there is no penalty," he said, adding that the mandate "covers 99% of the American people." He noted, "In Massachusetts where they had a plan like this under [presumptive Republican presidential nominee and former Gov. Mitt Romney], 1% did not take insurance, and they paid the penalty" (Mason, "Politics Now," Los Angeles Times, 7/1).
The Congressional Budget Office previously estimated that by 2016, two years after the mandate takes effect, about four million U.S. residents would have to pay the penalty. The fine would be $695 per adult in 2016, or 2.5% of a household's income, whichever is greater. The penalty for children would be half that amount.
According to the New York Times, the White House is trying to avoid the tax label because President Obama has long maintained that the penalty is not a tax. During the 2008 presidential campaign, Obama pledged to protect the middle class and promised not to raise "a single dime" of taxes on individuals with annual incomes below $200,000, the Times reports. Obama also said that no couple earning less than $250,000 annually would have to pay additional taxes if he became president (Calmes, New York Times, 6/29).
Democratic Governors Echo White House Defense of Mandate
Massachusetts Gov. Deval Patrick (D) on Friday echoed the Obama administration defense of the mandate as a penalty, the Boston Globe's "Political Intelligence" reports. Speaking during a conference call organized by Obama's re-election campaign, Patrick said voters should not "believe the hype that the other side is selling."
Patrick added, "First, this is a penalty. It's about dealing with the freeloaders -- the folks who now get their care without insurance in high-cost emergency room setting." He continued, "By whatever name, this is a solution. And the fact is that President Obama has one and congressional Republicans and Mitt Romney do not."
Maryland Gov. Martin O'Malley (D), who also joined the call, said that Republicans are "retreating to the last bastion of scoundrels, which is to try to cast this as some sort of tax increase," adding, "It would only affect 2% of the entire public ... And it's a penalty" (Viser, "Political Intelligence," Boston Globe, 6/29).